Hospitals across the country are using century-old lien laws to increase their revenue when treating victims of accidents, such as car crashes, by bypassing the discounts that are normally provided to health insurance companies, according to a report in The New York Times. The practice is “so lucrative” that some hospitals use debt collection companies to “scour police records” for the names of accident victims to see if they are treating any of them and can pursue a lien instead of billing their health insurance, according to the report.
Rather than send bills to a health insurance company or Medicare or Medicaid — which negotiate discounted rates for treatments and procedures — the hospitals are instead placing liens on the settlements received by the accident victims, and charging the full price for the patient’s stay.
One individual, who had Medicaid, had a lien placed on her settlement for more than $12,500, which was five times higher than what Medicare would have paid for the victim’s treatment and stay in the hospital, according to the report.
States across the country regulate the process differently. Some limit how much a hospital can pursue, others only allow hospitals that are non-profit to do it, while some require hospitals to bill health insurance instead of placing a lien.
The article spotlighted a veteran who was in a car crash and had a lien placed on his settlement. The “nearly constant collection calls” that he received made him feel like a “real deadbeat,” according to the report. He is now part of a class-action lawsuit filed against the hospital for pursuing liens.
Joe Fifer, the chief executive of the Healthcare Financial Management Association, is quoted in the article saying it is “a reasonable position to seek payment from whoever is going to pay more,” and that state and federal laws dictate how some patients should be billed. Providers should be clear from start about how the lien process works, he said.
