Coordination of insurance benefits for injury victims is vital for access to health care and maximization of physical and financial recovery. In this article we look at 3 scenarios for the health care provider in the context of a patient with a liability claim against the at-fault driver and where the patient
1. has PIP coverage available;
2. has no PIP coverage available nor any health insurance to bill for treatment; and
3. has no PIP coverage available , but does have health insurance with the patient as a preferred provider or subscriber to the insurance plan
We are drawing attention to this subject area because a provider may unwittingly misunderstand his or her rights and duties in different insurance contexts, resulting in potential legal and financial consequences for the provider of services.
1. Pending Liability Claim, but Patient has PIP coverage
Where there is Personal Injury Protection (PIP) coverage on an automobile policy or MedPay on auto or homeowners policy, the contract of insurance is between the patient and the insurance company. Here the situation is clear that a provider should submit bills to the PIP insurer along with documentation to show the reasonableness, necessity and relationship of treatment to the trauma and in exchange the insurer pays the bills.
2. Pending Liability Claim with No PIP and No Health Insurance
In this scenario, the provider is free to collect payment directly from the patient or defer full payment for medical care until conclusion of the underlying tort claim. And the provider may use a Contractual Guarantee of Payment or the Washington lien statute, RCW 60.44, to help secure payment from the proceeds of a third-party settlement. This is an effective way to provide patients access to health care while the provider maintains some security that their outstanding bills will be paid at the conclusion of the case. Liens and Guarantees of Payments have been discussed in depth in previous articles and are available on our Web site, www.adlergiersch.com.
3. Pending Liability Claim with No PIP, but Patient has Health Insurance and Provider is a Provider in the Contract
The third scenario is the heart of this article. Health insurance is a highly regulated scheme and may present pitfalls to the unwary provider. Many providers choose to enter into participating provider contracts with major health insurers, while others do not. For those that participate in the contract it is likely because the health insurance plan provides a pool of potential patients who will choose a provider on their plan. It also provides a (theoretically, at least) a somewhat reliable revenue stream for treatment of patients on these plans. The compromise for the provider is, however, the agreement to the contracted reduced rates for services. This requires the provider write off a certain portion of the charges for plan-insured patients.
Health insurance participating provider contracts are subject to the terms set out in the provider contract and Washington regulation. Of particular importance to a participating provider are the regulations in WAC 284-43. These regulations set out mandatory contract provisions and obligations. These regulations are mandatory and (unfortunately) may not be modified even when there is a willingness to do so by the provider and patient. The regulations set out its purpose:
The purpose of this chapter is to establish uniform regulatory standards for health carriers and to create minimum standards for health plans that ensure consumer access to the health care services promised in these health plans.
WAC 284-43-100.
The achieve this end, providers are prohibited from collecting “covered charges” from patients. A provider may only collect non-covered charges, such as deductibles, co-pays and non-covered services directly from a patient. WAC 284-43-320 requires a participating provider contract to contain the following language:
(2) Each participating provider and participating facility contract shall contain the following provisions or variations approved by the commissioner:
(a) “[Name of provider or facility] hereby agrees that in no event, including, but not limited to nonpayment by [name of carrier], [name of carrier’s] insolvency, or breach of this contract shall [name of provider or facility] bill, charge, collect a deposit from, seek compensation, remuneration, or reimbursement from, or have any recourse against a covered person or person acting on their behalf, other than [name of carrier], for services provided pursuant to this contract. This provision shall not prohibit collection of [deductibles, copayments, coinsurance, and/or noncovered services], which have not otherwise been paid by a primary or secondary carrier in accordance with regulatory standards for coordination of benefits, from covered persons in accordance with the terms of the covered person’s health plan.“
WAC 284-43-320(2)(a).
This means that, if a provider has a contract with the health insurance carrier of a patient, it is a violation of the provider contract to collect anything but deductibles, co-pays or non-covered services from the patient. Violation of this provision carries a significant penalty that will make all providers take note:
(3) The contract shall inform participating providers and facilities that willfully collecting or attempting to collect an amount from a covered person knowing that collection to be in violation of the participating provider or facility contract constitutes a class C felony under RCW 48.80.030(5).
WAC 284-43-320(3) (emphasis added).
Also, the Health Care False Claim Act (RCW 48.80) requires that, if a provider is convicted under the act, the prosecutor shall provide written notification to the regulatory or disciplinary agency. The disciplinary board may then investigate and take disciplinary action against the provider. RCW 48.80.060.
Finally, violation of the WAC provisions would likely also result in revocation or non-renewal of the contract by the carrier for breach of contract. The provider then loses the benefits of such a contract.
Recently, we contacted the Office of the Insurance Commissioner regarding whether the provisions required in WAC 284-43 are optional. We are advised that the provider-health insurer contract may not be modified to get around these provisions.
Providers should review and be familiar with all provisions of contracts entered into with insurance carriers to avoid unintended repercussions. Insurance carriers should provide support to assist the provider in determining his or her rights and obligations under the contract.
Coordinating benefits on behalf of an injured person is vital to secure access to care, fair recovery and ensure that all involved in a patients care are properly reimbursed. At Adler Giersch, PS we can and will assist your patients and you with the maze of insurance coordination to achieve these ends.
