Imagine you’re in a car accident that wasn’t your fault. When you arrive at the hospital, you present your insurance card, but the hospital tells you it can defer billing until after you receive payment from the other party’s insurance. Because you weren’t at fault, that sounds like a pretty good option. You think: “I don’t have to pay anything now, and my premium won’t be affected.” You sign some papers and get treated for injuries.
However, months later you receive a bill from the hospital for a whopping $34,106. As it turns out, one of the papers you signed was a waiver that gave the hospital permission to pursue a lien.
This is what happened to a patient in Oklahoma who was involved in a car accident in which the patient’s head hit the windshield. According to the New York Times article, “How Rich Hospitals Profit from Patients in Car Crashes,” this Oklahoma hospital is one of many that have quietly used century-old hospital lien laws to increase revenue, often at the expense of low-income people. By using liens — a claim on an asset, such as a home or a settlement payment, to make sure someone repays a debt — hospitals can collect on money that otherwise would have gone to the patient to compensate for pain and suffering.
“The way they are spinning it is, you don’t want to use your health insurance because someone else caused this,” said Loren Toombs, an Oklahoma trial lawyer who represented the patient. “It’s clearly a business tactic and a huge issue, but it’s not always illegal.”
A document in a 2014 litigation showed that a hospital in Washington State generated $10 million annually from this practice.
Misleading patients
And sometimes patients think their insurance companies are being billed when they’re not.
When Monica Smith, of Garrett, Indiana, was badly hurt in a car accident, she assumed Medicaid would cover the medical bills. Smith provided her insurance card after an ambulance took her to Parkview Regional Medical Center in Fort Wayne, Indiana. She spent three days in the hospital and weeks after in a neck brace.
But the hospital never sent her bills to Medicaid, which would have paid for the care in full. Instead, it pursued an amount five times higher from Smith directly by placing a lien on her accident settlement.
The bills that Medicaid would have paid would have been $2,856. But that amount swelled to $12,856 when the hospital pursued a lien from Smith.
“It’s astounding to think Medicaid patients would have been charged the full-billed price,” said Christopher Whaley, a health economist at the RAND Corporation who studies hospital pricing. “It’s absolutely unbelievable.”
Targeting the vulnerable
In states with lenient hospital lien laws, some hospitals take advantage in ways that hurt patients.
In 2019, when veteran Jeremy Greenbaum went to one of Community Health Systems’ hospitals in Tennessee after a car crash, it didn't bill Medicare or his veterans’ health insurance. Instead, the hospital filed liens for the full price of his care.
“I could cut off a finger and the V.A. would cover it,” Greenbaum said. “The insurance is just that good.” He is now part of a lawsuit against the hospital for its greedy lien practices.
Said a spokeswoman for Tennova, “Tennessee state law allows hospitals to file provider liens as a way to ensure that health care providers can be paid for treatment.”
Dennis Denson was treated at a WellStar hospital for his injuries after a car accident three years ago. Denson said he presented his health insurance card immediately upon entering the emergency room but that his insurance company was never billed. The hospital placed a $13,469 lien against his auto accident settlement.
A spokeswoman for WellStar said the hospital uses liens only when patients don’t provide coverage. Denson insisted he did have his insurance card at the emergency room, but the hospital says it was not given until more than a year after the accident.
Denson not only had to deal with the physical pain and recovery of the accident but also the subsequent bills that have caused him to go into debt. “I really feel angry,” Denson said. “You are going into a fight with the hospital that you don’t know the rules of."
