And you thought once the insurance paid you were done....

When we last left our motorcycle crash victim, he was recovering from his crash. It would take 3 months before he could walk again, and to this day still walks with a limp and cannot run. But each day brings a little more movement, and hope fills him that in a few months he will be able to walk 18 holes of golf again, and at least be able to run 100 yards.

But ... unknown to him ... dangers lurked in a different form. Let's join him now as he reflects on how our medical profession and insurance professions work for .. and sometimes against .. the people that pay their premiums and use their services.
......
Sometimes it feels like this should be happening to someone else. We hear about the guy that got hurt in a car or motorcycle crash, and are thankful it isn't us. But every day, we get in our cars or on our bikes and head out into rush hour traffic yet again, knowing that if anything ever happens, our insurance companies will pay our bills based on our contract with them.

Unfortunately, we don't know what is in those contracts.

About three weeks after the crash, I got a letter from the hospital. Or rather, from the attorney's for the hospital. It is a notice of a lien in the amount of $43,710.12, which is the amount the hospital billed me. Fair enough, they deserve to get paid. When my health insurance pays, and then I pay the deductible, it will all be cleared. Right???

WRONG!!!

We finally get to the main reason behind the post. Unknown to either the reader or me, it seems medical providers have contracts with our insurance company. As part of that contract, they are permitted to not only seek what we owe them that our health insurance didn't pay, but also money ABOVE AND BEYOND WHAT THE INSURANCE HAS NEGOTIATED.

Picture this ... I walk out on a beautiful Wednesday to take the trash out. I step off the curb and break my fibula. The insurance pays the hospital $9K, I pay the hospital my deductible and other co-insurance of $3K, and we are done. Even though the hospital billed $43K, they are contractually obligated to accept the $12K because this is the negotiated rate when they signed up to take the health insurance.

Now .. say I have the exact same break, but this time I am in a motorcycle that is my own fault. It works the same way.

But, in this crash, there was a difference. The other driver is at fault, and her insurance company is liable for damages. The hospital takes the position that they can go get the other $31K because their contract with my health insurance lets them. Ok .. that's fine by me, go ahead. After I get my settlement, go ahead and get yours.

Except, in this case, the insured only has $25K of coverage. The minimum liability in Arizona is only $15K, it is not necessary for anyone to carry more than that. Now, I do because I have a house and other assets that I want to protect. But this person lives in an apartment, is young, and basically can barely afford her insurance. So why bother.

It is the opinion of the lawyer that they come FIRST when collecting funds, and that I can kiss their ass. I only get out of pocket expenses or pain and suffering AFTER they get their $31K.

Now .. in a show of compassion, they offered to only take $15K of my $25K settlement. Wow .. thanks. $10K to pay off my out of pocket expenses, the time off from work my wife and I had use up while I was in the hospital and followup doctor visits. Basically leaving me with $5K for not being able to walk for 3 months.

I can't go back to the driver, she doesn't have anything. So what can I do??

Right now, I'm having a very pleasant weekly letter with the attorneys explaining to them why they legally do not have a right to this money, while they argue that they do. In the meantime, I'm having to pay $3,000 worth of hospital bills out of my own pocket. The insurance company is ready to write a check, as soon as the attorney and I come to an agreement.

What can you do to protect yourself from this??? As of right now, I don't know. The lawyer is quoting a case Andrews, et. al. v. Samaritan Health system as proof of their right. They also claim that they are seeking only 'customary charges'. My argument to this point is that if the insurance company normally pays $12K for this, then that IS the customary charge. Furthermore, in the case noted above, the defendants had filed suit previously for the ENTIRE amount of the hospital bill, making any followup claim by the hospital impossible since the bill was already paid once. I argue that since I never sought the $31K in damages, I don't owe them from my settlement.

So ... we are at a stalemate. For now. At some point, if we can't agree, one of us will need to file a legal case against the other.

So ... tune in next week to see how the attorney responds to the above and where this all goes.