I have health insurance. Why isn’t it paying for my crash related bills?

Get ready for a long explanation and be prepared to get confused and angry. The law in this area is evolving and continues to surprise unwitting accident victims and their attorneys.

Before the law in this area went haywire in Ohio, a person (call him Bob) would get injured in a car accident due to someone else’s fault and Bob would go get medical care. Bob would give the doctor his health insurance card and the doctor would charge Bob his copay, bill Bob’s health insurance and Bob’s health insurance would pay the bill. Bob’s doctor billed Bob’s treatment to his health insurer because Ohio had (and still does) a law that says when a patient gives a provider a health insurance card, the provider must try to bill health insurance before trying to collect from the patient (except for deductible and copays). R.C. 1751.60(A). When it is time to settle Bob’s injury claim, any outstanding copay can be paid out of Bob’s settlement and any amount that Bob’s health insurance paid to a doctor is paid back to the health insurance company out of Bob’s settlement. This “payback” is often called subrogation by attorneys. Consider the scenario below that uses actual amounts to demonstrate the above explanation.

Bob is injured in a crash and goes to Cleveland ER. The ER checks out Bob and charges him $1000. Cleveland ER submits Bob’s bill to Bob’s Health Insurer MMOH. MMOH reduces the $1000 bill to $300 because under MMOH’s contract with Cleveland ER, Cleveland ER can only charge this much for the visit (also called a “write off” or UCR reduction). MMOH pays $280 to the ER and says the Patient owes the ER a $20 copay.

In the end, Bob has received his care and the doctor has been paid $280 from health insurance and $20 from Bob as a copay. Bob’s care costs $1000 and that is how much he was charged, but because Bob had health insurance and the provider has a contract with Bob’s health insurance company, the provider agreed to take $300 as payment in full. The $700 difference is the “write off.” If Bob’s case settles, he will pay back his health insurance $280 out of his settlement and $20 to his doctor for his copay (if he has not already paid the copay out of his pocket prior to the settlement.

$1000 ER Charge to Bob

-$700 (Discount or “write off” that Bob gets because he has health insurance)

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$300 Amount now owed by Bob

-$280 (paid by Bob’s Health insurance MMOH)

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$20 amount owed by Bob to Doctor

Now for the trickier part. What happens if Bob decides the settlement offer is not enough and he wants a jury to decide how much he should get for his injuries. Prior to 2003 in Ohio, in this scenario, when a Plaintiff’s lawyer asked a jury to pay for an injured Plaintiff’s medical bills, the lawyer would show the jury the amount of the medical charges. Using the example above, the jury would see the original charge of $1000. Regardless of who paid Bob’s medical bills or how much was paid, the jury typically only ever saw the amount charged by Bob’s doctor. Ohio had (and still does) a statute called the “collateral source” rule that made it improper to talk about health insurance payments in front of a jury. R.C. 2315.20. So if a jury awarded Bob the value of his medical bills in a verdict, it would award him $1000. It did not matter that at the end of the day the doctor took $300 as payment in full ($280 from health insurance and $20 from Bob). Prior to 2003, Bob would realize a windfall of $700 (the amount of the write off).

$1000 Amount awarded by the jury to Bob for his ER bill

-$280 (Amount Bob must pay back to his health insurer)

-$20 (Copay Bob must pay to the Doctor)

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$700 Amount Bob keeps from the jury award

Around 2006 the Ohio Supreme Court decided that it was going to reinterpret the collateral source rule and it determined that juries would now get to see the original bill ($1000) and the amount accepted as payment in full by the provider ($300). The jury was free to then award somewhere in between the two numbers ($1000-$300). Of course, this is a very simplified picture, but in essence, this new interpretation was the Court’s decision in Robinson v. Bates (2006), 112 Ohio St.3d 17, 2006-Ohio-6362.

Overnight, cases that used have medical bills with a trial value of $1,000 had a value of $300. It was a win for insurance companies and a blow to Plaintiff’s lawyers. In a way, at this point in time, it was almost better to have a client that did not have health insurance because the jury would only see the high charges.[1] If you had a client that had health insurance, not only were the medical providers required to bill health insurance, once health insurance reduced the bill via a “write off,” the value of the claim would be “reduced” as well, and your client would still have to pay back the health insurer.

So what do write offs and requirements to bill insurance have to do with one another? Fast forward to 2010. Hospitals are tired of patients coming to the ER after a crash, getting a lot of treatment, then presenting their Medicaid card. Under the current interpretation of the law, the ER has to submit the bills to Medicaid. The only problem with Medicaid is that the payments to hospitals are terribly low, perhaps the lowest payments of any health insurance. The ER may charge $7000 and only get paid $600 from Medicaid. The rest is written off. When ERs get paid by Medicaid, they may even lose money by treating the patient.

The ER also knows that if the patient does not have health insurance, the ER can submit the medical bill to a car insurer and if the patient is covered by “medical payments” under his car insurance policy, that coverage will pay almost the entire bill in full. Instead of getting paid $600, the ER would get paid $7000 (or up to the limits of the med pay coverage).

The healthcare industry understands that it has one problem that is preventing them from the bigger payments, Ohio’s law that requires them to bill health insurance first. At this point, the healthcare industry asks the Ohio Supreme Court to reinterpret the rule that it must bill health insurance before it bills anybody else. In King v. Promedica, the Ohio Supreme Court says that everybody has been interpreting this law wrong and that medical providers are not required to bill health insurance, but can bill the patient’s med pay coverage if the patient has that kind of coverage. King v. ProMedica Health Sys., Inc. (2011), 129 Ohio St.3d 596, 2011-Ohio-4200. The healthcare industry loves the new ruling because now it stands to make a lot more money off these car accident patients. Unfortunately, the Ohio Supreme Court was not very clear with exactly what it meant. Other lower courts have issued rulings that many major healthcare providers have interpreted as saying that whenever someone is hurt who may be covered by liability insurance (for example car insurance, home owners insurance, business insurance), the medical provider is not required to bill health insurance and can bill and/or wait for the much larger payments from car insurance. Hayberg v. Robinson Mem. Hosp. Found. (9^th Dist. 2013), 2013-Ohio-2828.

One of the unintended side effects of this law interpretation was that it effectively eliminated the write offs from car accident damages. In the example above, Bob goes to the ER and gives his health insurance card to the ER. The ER says thank you Bob, but since King v. Promedica we are now allowed to bill your car insurance, the other person’s car insurance, or some other insurance since we get paid much better. Bob says okay and gives the ER his car insurance information and the other driver’s information. The car insurer pays the entire $1000 to the ER. When Bob goes to trial, the jury hears that the bill was $1000. The jury does not hear that if it was Bob’s own car insurance that paid the $1000, Bob will have to pay it back out of his verdict.

The healthcare industry’s new position, that they are now allowed to bill your car insurance, the other person’s car insurance, or some other insurance, has resulted in a power play between big medicine, automobile insurers and Plaintiffs. What happens if a patient has health insurance and has car insurance, but does not have med pay coverage and the other driver’s insurance company will not pay? In the example above, Bob presents everything to the ER. The ER sits back and waits to get paid from either med pay (which Bob doesn’t have) or the other driver’s insurance (who will not pay). So Bob advises the ER to bill his health insurance (which the ER will not do because Bob has Medicaid and the ER would rather take its chances for the bigger money). Bob is between a rock and a hard place. Bob will not get paid for his bills or injuries and he is getting collections notices in the mail, so he tells his lawyer to file a lawsuit and the lawyer sues the other driver.

Bob’s lawyer tells the Defendant’s car insurance company that Bob’s ER bill is $1000. The car insurance then asks “how much was written off?” Bob’s lawyer says “nothing.” The car insurer then says “But Bob has health insurance, the ER should have submitted it to health insurance.” At this point Bob’s lawyer points out that under King v. Promedica Bob’s ER doctors are not required to bill health insurance and can bill Bob’s own car insurance, the Defendant’s car insurance, or some other insurance. If Bob’s case goes to a jury, the jury is only going to hear about the $1000 charge because the bill was never submitted to health insurance and never paid by anyone. Of course, the Defendant’s car insurance hates this outcome. In response to this exact scenario, car insurance companies are just “creating” write off amounts out of thin air. In Bob’s example this implied or assumed write off would result in the Defendant’s insurance company just “assuming” there was a write off and reducing its offer by at least $700 (what should have been the write off if Bob’s bill had been submitted to health insurance).

Now we get to the biggest problem with the state of today’s law. If Bob wants to settle his case, he is only going to get offers from the Defendant’s insurance company that have the write off amount already factored into them. This “baked in” write off amount is a huge problem for Bob and his lawyer. If Bob’s case settles, he still owes the full amount of the ER bill ($1000) because the bill has never been submitted to Bob’s health insurer and no one else is required to pay the bill. Only Bob is not getting offers that take into account the fact that Bob is required to pay the entire $1000 ER bill. Bob’s case may have already been pending for more than six months or a year. By then it is too late for a provider to bill any health insurance company. The ER is not sympathetic and sends Bob’s ER bill to collections. Bobs’ only recourse at this point is to take his case all the way to a jury and hope that they give him a big enough verdict to pay that $1000 ER bill in full. Unfortunately, Bob’s credit is ruined.

Now assume that Bob’s injury case loses at trial. Bob has nothing. The ER bill is still outstanding and the hospital sues Bob in small claims court for $1000. The small claims Judge knows nothing about all these laws and unless Bob has the money to hire a lawyer to explain this giant mess of laws, he is now going to have a judgment against him for $1000.

The case law on this topic is still evolving every day and there may be hope. There is at least two federal court opinions (which are not binding on state courts) that seems to strike at the heart of the issue and holds that in the Bob’s scenario above, if Bob does not have med pay and the ER provider fails to bill health insurance, the ER provider can never collect from Bob directly. Raymond v. Avectus Healthcare Solutions, LLC (6^th Cir. 2017), 859 F.3d 381; Jackson v. Prof'l Radiology Inc. (6^th Cir. 2017), 864 F.3d 463 For now, unwitting and unrepresented car accident injury victims continue to succumb to the collateral damage caused by the battle between big medicine and giant car insurers. If you have been injured in a car accident, contact the attorneys at Tsilimos, Dolesh and Pena, LLC and we will help.

[1] There is a school of thought that juries tend to “anchor” or base their awards on the amount of the special damages which include medical bills. The higher the bills, the higher the award. A jury is less likely to give a bigger award if the medical bills are smaller. Sometimes, lawyers try a case to a jury without submitting the medical bills at all, especially when the bills might be small but the injuries are significant.