Many hospitals in Missouri refuse to submit their bills to a patient's health insurance carrier if that patient has been injured in an automobile accident. This is because if they submit their bills to the patient's health insurance carrier, then they have to accept the health insurance carrier's reduced, negotiated rates. In other words, they have to accept the same payment amount they would have received if the patient was NOT injured in an auto accident. These hospitals are basically "voiding" a patient's health insurance coverage and are, instead, placing a hospital lien on the patient's auto accident claim. This is because the Missouri Hospital Lien statute allows a medical provider to place a lien for unpaid medical expenses on a patient's automobile insurance claim. The lien acts as a legal obligation that requires the patient or the automobile insurance carrier to pay the full extent of the lien at the time the auto claim is resolved. The hospital waits to get paid until the case resolves, but the hospital can get a much higher payment than they would have received if they would have submitted their claim to the patient's health insurance carrier.
This practice can cause problems for the patient. For instance, the patient receives less money when they resolve their case with the auto insurance carrier if they have to pay back a huge hospital lien. Furthermore, if the patient loses their case and does not receive any money from the auto insurance carrier, it may be too late at that time for the hospital to seek payment from the health insurance company. This leaves the patient having to pay a hospital bill that would have been completely covered by their health insurance if it would have been submitted timely.
Attorneys in Kansas City took on St. Luke's Hospital on behalf of over 900 auto accident victims whose bills were not submitted to their health insurance carrier. After a lengthy litigation process, the hospital finally settled with the victims and has agreed to stop the practice of foregoing a patient's health insurance coverage in favor of placing liens on the patients' cases. Hopefully, this case will convince all other hospitals in the state to participate in the practice.