It is a tough economy out there. It is particularly tough in the healthcare industry. Our healthcare economy revolves around health insurance. In order to make sure they receive payment when they treat you, hospitals and other medical providers enter into agreements with health insurance plans. These agreements are usually called PPO agreements. In exchange for the insurance company’s agreement to pay the provider’s claims, the medical providers usually agree to accept far less than the “sticker price” of the medical treatment rendered. This is commonplace, though few consumers are aware of the practice.
Typically, none of the benefits provided by automobile insurance are subject to PPOs. That means that car insurance usually pays medical bills at full sticker price. Mississippi has no hospital lien statute, so usually the only way the hospital can obtain payment of your medical bills from car insurance proceeds is to get the patient to sign an assignment of benefits. Often your medical provider will request you make this assignment as soon as they find out that you were injured in a car accident. Many times the hospital requests the assignment while the patient is in the emergency room awaiting treatment.
What difference does it make to you which insurance company pays your medical bills? We believe the practice of medical providers looking for reimbursement from automobile insurance first is wrong. This practice represents a blatant attempt by medical providers to bypass the agreed upon discount for services under the PPO in favor of full sticker price reimbursement from auto insurance. In fact, if your health insurance is with Medicare or Medicaid, this practice likely constitutes Medicare fraud. Most importantly, assigning your car insurance benefits to a medical provider reduces the amount of auto insurance coverage available to pay you!
If you are faced with this situation, there are several things to keep in mind. Insist that the hospital file their claim with your health insurance provider. Medicare, Medicaid, and most health insurance plans allow the patient to submit the hospital claims for payment directly to health insurance provider if the hospital refuses to do so. However, if the hospital convinced you to assign your rights to auto insurance benefits, Miss. Code Ann. § 83-9-3 (1972) allows patients to cancel an assignment given a hospital or medical provider at any time. As with anything, spending the time to read the documents the hospital puts in front of you, and hiring competent counsel to assist you through the insurance claims process are critical in preventing hospital overreach.