Medical Providers Need Not Bill Health Insurance

 

 

In Barry v St Mary’s Hospital the Plaintiff treated at Defendant – St Mary’s – for injuries he sustained in a car wreck. The defendant asserted 3 liens against the Plaintiff’s personal injury claim which he had against a third party who was not involved in this case. The defendant eventually submitted two of the three bills to Plaintiff’s health insurance.  The third remained a lien on the Plaintiff’s personal injury case.

Plaintiff filed suit against St Mary’s claiming several things, including consumer fraud, third party beneficiary, and breach of contract. In this lawsuit, the plaintiff claimed that the defendant must submit the medical bills to his health insurer. Refusal to do that was breach of contract and tortious.

The court rejected the Plaintiff’s claim.  It held that neither the Lien Act or any contract required the medical provider to submit bills to the health insurer. It could maintain its lien against the case and refuse to bill the health insurer. Claims for breach of contract and tort could not lie.

Unfortunately, this is becoming an increasingly common practice of medical providers. Medical providers do not want to bill health insurance because there is a discount. The health insurers do not pay the entire bill of a medical provider. So, rather than billing health insurance, the medical provider liens the personal injury claim, expecting to be paid everything it bills.

The injury victim is stuck between a rock and a hard place. The medical provider makes the injury victim sign an agreement that he or she will pay the medical provider. Then the medical provider fails or refuses to submit the bills to the health insurer. The injury victim is liable to the provider with no recourse against their health insurer. The victim is obligated to pay the bill regardless of whether they win or lose their personal injury claim. If the plaintiff in the personal injury suit loses the suit for any reason, they are still obligated to pay the medical bill to the provider. There is no reduction, like there would be if the health insurer pays the bill.

In Barry, the plaintiff’s first bill was for $2,194 and health insurance paid $830.

The second bill was for $1,179. The health insurer paid $515. The provider refused to bill health insurance for the last bill. Instead, it asserted a lien on the case, so that the victim had to pay the entire bill, which the appellate court said is acceptable.

This case is not fair to injury victims. It unfairly penalizes people who did not cause their accident. If the health insurance is not billed there is no reduction and people must pay unreasonably high medical bills.  The deadlines in the health insurance contract can run out.  The medical provider may ruin an injury victims credit rating.

This issue has not been decided by the Illinois Supreme Court.  We can only hope the Supreme Court will reverse this lousy decision. I should note that this case also does not answer what happens if the provider fails to bill health insurance and then sues the injury victim.

Ackerman Law Office is available to help injury victims.  Please feel free to contact us.