Healthcare providers must promptly assert billing rights in personal injury cases before patient resolves personal injury claim
From the time a patient who has suffered personal injuries is treated in the hospital’s emergency room, the facility, physicians, and surgeons need to keep alert for payment of bills not covered by insurance or Medicaid, when those patients retain personal injury counsel. Because the applicable statute of limitations may expire, and seemingly without warning, healthcare providers must assert their rights prior to any personal injury settlement or award. Otherwise, these facility and professional providers will be left without a remedy to recover.
Timing is Critical
In my experience, when physicians and facilities write off bills involving personal injury claims, they do so because accounts involving personal injury attorneys require too much effort and the indigent clients do not have sufficient resources to pay their bills.
I have found that facilities and physicians who render healthcare services to patients often walk away from these claims, leaving them unpaid. Common reasons are often interrelated and include:
- The services were rendered long ago, and the office is focusing on current dollars;
- Sending staff to court is costly and unproductive;
- Accounts involving personal injury lawyers require too much effort;
- Indigent patients are not expected to pay their medical bills; and
- The business office’s policy is to refuse discounts.
On their face, these motives seem reasonable, but they are inaccurate. These providers can be remiss in refusing to assert their rights to payments when personal injury lawyers become involved.
The Nature of Interpleaders
When more than one party is entitled to a claim against property – like settlement proceeds – an interpleader may be filed in court requesting a judge to determine the appropriate distribution of the funds to the adverse claimants. This often happens in personal injury cases where there is insufficient insurance to fully compensate the injured person. If the lawyer is unable to obtain reductions from the providers, an interpleader is filed.
The Impact of Statute of Limitations
There is a challenge faced by healthcare providers when interpleader actions are filed after the provider’s statute of limitations has expired, thereby precluding collection. For instance, consider a jurisdiction with a 3-year statute of limitations applicable to both services (medical bills) and negligence actions (e.g., motor vehicle injuries). The attorney filed a lawsuit against the responsible driver in Year 2, settling the case in Year 3. However, if the attorney files an interpleader the 3- year statute of limitations has run, the providers who did not file claims against the represented patient may be unable to recover due to expiration of the limitations period. Although jurisdictions are split on this issue – specifically, as to when the statute of limitations is prompted –the risk is not worth it.
Get an A&A or Promptly Pursue Any Necessary Legal Action
To help avoid problems with statutes of limitation, providers should insist that patients have their personal injury lawyers sign so-called “Authorization & Assignments” –forms signed by the patient and their attorneys promising to pay the provider in full from any recovery. If the patient refuses, then s/he would be subject to collection efforts. Keep in mind that the A&A should be designed to toll the statute of limitations for a reasonable amount of time – being triggered, say, by the filing of an interpleader. By getting that agreement in writing, providers can care for injured patients, obtain reimbursement for their charges, and avoid being the subject of a lawsuit for charges they will not be able to collect.
Gustavo Matheus is a member of Anderson & Quinn, LLC, in Rockville, Maryland, representing hospitals, medical practices, nursing homes, and outpatient centers with exceptional legal and denials management services. www.andersonquinn.com.
