Motor Vehicle Accidents and Health Insurance
One common cause of patients seeking hospital treatment is motor vehicle accidents, generally referred to as MVA’s, although nowadays the reporting forms used by law enforcement personnel to report traffic accidents generally are referred to as a Crash Report.
Not providing health insurance information
For a variety of reasons, patients who have been in an MVA sometimes do not provide health insurance information to hospital providers. Sometimes they erroneously believe their health insurance will be canceled or their premiums will be increased. They might have health insurance through their employer and not want their employer to know about the accident. In other cases, they believe their health insurance information isn’t necessary because the other driver caused the accident.
Another problem is that some people think there is some kind of statewide or national database system where hospitals, health insurance companies, auto insurance companies and law enforcement personnel can look up all necessary information regarding details of an accident, available insurance and what medical treatment was provided. There are no such databases.
Healthcare Industry Practice
Patients sometimes claim that because the treatment was due to an MVA, someone at the hospital told them, “We don’t need your health insurance information.” However, that is directly contrary to standard practice throughout the healthcare industry.
Frequent unreliability of auto liability insurance information
Auto liability insurance information often turns out to be unreliable and a “fallback” to health insurance is necessary.
- Per www.TexasSure.com, one vehicle in seven doesn’t have liability insurance.
- Drivers frequently provide information from expired or canceled auto insurance policies.
- Simply being in an accident or knowing a loved one has been in an accident can be so unnerving that persons may not be thinking clearly for several hours, causing errors in providing or recording insurance information.
- Persons who are not the primary driver of the vehicle – even spouses, parents or persons living in the same household – frequently don’t know details of the applicable coverage.
- Drivers who don’t have proof of insurance in the vehicle may provide incorrect insurance information from memory.
- Drivers often are unaware of lapses in coverage caused by a late payment, payment not received, or change of insurers.
- Many drivers only have required minimum coverage, which won’t come close to covering medical costs for major injuries.
- At-fault drivers often are excluded drivers under a vehicle’s liability policy.
- Driving without owner permission makes “permitted other driver” coverage inapplicable.
- Disputes as to who was at fault often result in denial of liability and no payment by the liability insurer.
- At-fault drivers often claim the other driver caused the accident, hoping to avoid a ticket and/or an insurance increase.
- Drivers sometimes provide false identification or contact information to avoid problems with the criminal justice system such outstanding arrest warrants or parole violations.
- Persons in accidents often don’t remember split-second events accurately, leading passengers or at-fault drivers to believe and claim the other driver caused the crash.
- Passengers in an at-fault vehicle owned or driven by a friend or relative often claim the other driver caused the accident to protect their friend or relative.
Notification of Admission
Many health insurance policies, employer-sponsored healthcare Plans, and managed-care contracts require healthcare providers such as physicians and hospitals to notify the insurer or Plan that the Member is presenting for treatment prior to providing treatment. If the Provider does not give pre-treatment notification, the services might not be eligible for payment.
Verification of Benefits (VOB)
Although not required by law, routine practice in the healthcare industry is that the Provider contacts all relevant health care insurers, employer-sponsored healthcare plans, etc., and requests coverage information and verification of benefits. This way, the Provider knows whether the person actually has coverage and the specific coverage available.
Pretty much all health insurance policies and employer-sponsored healthcare Plans require the Plan Member to pay part of the bill. The Provider must contact the insurer, network or payor to find out what these amounts are.
Common provisions include: (terminology explained)
- Patient co-pay
- Co-insurance (despite the term “insurance”, the percentage not paid by the policy)
- In-network Annual Deductible
- Out-of-network Annual Deductible
- In-network out-of-pocket Maximum
- Out-of-network out-of-pocket Maximum
- Annual Maximum
- Lifetime Maximum
- Non-covered Services
Utilization Management, Preauthorization or Precertification
Preauthorization and precertification are synonyms. Many health insurance policies and employer health care Plans require healthcare Providers to participate in Utilization Management. Before a Provider furnishes treatment, it must contact the insurer or Payor, tell them about the medical situation and get pre-approval to provide specific services. If the Provider does not get preauthorization from that specific insurer or employer Plan, the services might not be eligible for payment from that entity.
Coordination of Benefits (COB)
In situations where there are multiple sources of payment, for instance two health care insurers or an auto liability insurer and a healthcare insurer, health care Providers are either expected or required to obtain information on all relevant sources and provide that information to each source, so those sources can perform coordination of benefits (COB) and determine the amount of money each source is responsible to pay.
Managed-care contract requirements
A managed-care contract is an agreement between a healthcare provider such as a hospital and either a healthcare payor (such as an employer) or a health insurer or a provider network. The contract provides that: (i) the payor / insurer / network will “steer” patients to contracted providers; (ii) contracted providers will treat those patients; and (iii) in exchange for that patient steerage the healthcare provider will discount the amount the payor or insurer is required to pay.
Managed-care contracts between hospitals and healthcare networks, insurance companies, or large employers routinely require providers to inquire about applicable healthcare coverage and provide that information with their insurance billing.
Third-Party Liability (TPL) resolution delays
A claim against an at-fault driver’s liability insurance is a third-party liability claim. Although most TPL claims are settled relatively promptly, for a variety of reasons settlement of some claims can take six months or more. If liability is disputed, the claim might not settle at all. The existence of a TPL claim does not eliminate the patient’s obligation to pay for medical treatment received.
Claim filing deadlines
Health insurance policies and employer-sponsored Plans have claim filing deadlines and so do most managed-care contracts. If a health care claim is not filed within the deadline, benefits might be denied – even if a third-party liability claim is in progress.
So, as we can see, a patient should never think that a hospital or other health care provider doesn’t need their health insurance information, even if the treatment is because the patient was in a motor vehicle accident. There are numerous reasons why the health care Provider needs health insurance information, including:
- Auto liability insurance information is frequently unreliable.
- Health insurance frequently requires pre-treatment notification.
- Verification of benefits (VOB) is a standard practice.
- Patient portions need to be determined.
- Preauthorization / precertification and Utilization Management are usually required.
- Coordination of benefits (COB) will help get bills paid.
- Managed care contracts often require the Provider to obtain such information.
- Claims against another driver’s liability insurance might take a long time to settle or not settle at all.
- Healthcare coverage usually has claim filing deadlines.