This blog post is for other personal injury lawyers. I often see the following question asked in groups: What is the best way to handle a large emergency room bill that either led to a minor diagnosis or is on a smaller personal injury case?
To a certain extent, personal injury cases are business transactions with many moving parts. Everyone knows that a lawyer is responsible for getting the most they can for their client from the insurance company. Not everyone (and certainly not all lawyers) know that they are also responsible for negotiating down the amount the client owes to their medical providers. You want the client to be the clear winner from this transaction by getting the most and paying the least.
The most important question to ask about a large emergency room bill is not what was the ultimate diagnosis, but what procedures were undertaken to arrive at that final diagnosis? While the client may have only been diagnosed with cervicalgia, were there more serious diagnoses ruled out through different testing?
From my experience, a large emergency room bill is usually beneficial to the claim by showing the adjuster how severe the injury was. Even if the final diagnosis is that of a minor injury, it shows that my client suffered through a variety of symptoms whose cause was not easily identifiable. I believe that this advantage far outweighs the burden of trying to find a way to pay off the bill with limited funds at the end of a case.
You can take care of a large emergency room bill in a few different ways. Keep in mind that you must go over all of this with your client beforehand. The client may want to dispute payment of any liens or take care of the non-lien bills on their own. I do not advise any of my clients to do this, but on the rare occasion you get a client that likes to do it on their own, make sure you handle this properly. In that case, the lawyer may disburse all non-disputed or non-lien settlement funds to the client. If, however, the client is disputing the amount of a lien, the lawyer must hold those funds in trust until after the dispute is resolved, whether by court order or through negotiations. It is improper for lawyer to disburse funds designated to lienholders to the client if the lawyer knows there is a dispute.
I will go over two methods for addressing large emergency room bills here. Each approach assumes you have gone over the risks with the client beforehand. The first approach is by calling the hospital and asking them to put a lien against the case. Keep in mind that most of the time, hospitals in Missouri do not bother putting liens in on personal injury cases. A lienholder cannot bill a patient’s car insurance after receiving a lien payment from the accident. I am not sure if hospitals do not submit liens to keep the option open of receiving payment from both private health insurance and from the car accident case, but for whatever the reason they typically do not assert a lien. By calling the hospital and explaining the situation, you may be able to get them to assert a lien to protect theirinterests. They may be willing to do this once you tell them injuries are not severe enough to warrant a big settlement where they could be paid in full. If there are other liens in the case, alerting the hospital to their existence could provide additional motivation for them to protect their interests. Once the hospital has submitted a lien, the large bill becomes a minor problem. They will be paid a pro rata portion of their bill in relation to all the other lienholders at the conclusion of the settlement.
The second approach is a bit riskier, but one I have successfully done countless times. Before doing it, one must understand that medical providers do not often get paid in full for the services that they provide. Whether they are paid by a private health insurance company, Medicare, or a car accident lien, providers almost always are asked to accept a discount. Most emergency room bill itemizations show an amount charged, an amount adjusted, and an amount paid, all before the client’s responsibility is listed. Health insurance plans can use their group purchasing power to get medical providers to adjust their rates, which is where the adjustments line comes from. The amount that health insurance pays to the provider is governed by the contract the health insurance plan has with the provider, while the amount owed by the client is governed by the terms of their contract with the health insurance plan. I think that this is one of the reasons the medical bills are so high in America. They know that they will not actually receive the full amount charged.
The second approach is to pay the provider according to the lien statute; despite the fact the provider does not have a lien. This will protect too much of your client’s settlement from going to medical providers. Write Full and Final settlement on the check and send along with a letter disputing the total amount owed and explaining that by cashing this check, the provider is accepting a new contract, wherein the provider is agreeing to accept this partial payment as full and final settlement by the act of depositing the check.
This second approach takes advantage of the Accord and Satisfaction laws in Missouri. This law allows for partial payment of a disputed amount owed as full and final payment. It essentially operates by changing the terms of the original contract to a new contract where less is owed. If the provider cashes the check, they cannot dispute that an accord and satisfaction has occurred unless they try to tender repayment within 90 days. I have used this method to success on countless occasions. If medical provider tenders repayment, you should send a second payment (slightly higher than the first) until an acceptable resolution is reached.
