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Balance Billing from Health Insurance in Maryland Accident Cases

balance billing

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Dealing with healthcare providers who seek to “balance bill” in personal injury cases is becoming an increasingly frequent occurrence in our practice. Balance billing is when the medical provider seeks payment for the entire bill, when the patient’s health insurance or HMO does not cover that portion of the bill. The medical provider bills the patient for whatever the insurance company or HMO does not pay.

Balance billing is permissible if it is not limited by law or contract.  But when medical providers agree to accept reimbursement from government health plans, there are often restrictions on the ability of the medical provider to balance bill.  With private medical insurance like most of us have, the insurance company often mandates by contract to protect their insureds by requiring the provider accepting the insurance to accept the insurance company’s payment along with any necessary Co-pays.

For example, your client’s insurance company might pay $4,000 for a particular surgery, but the surgeon charges $5,000. If the surgeon’s office accepts the plan’s payment but then seeks to collect the remaining balance from the client, the surgeon is balance billing the client. The question for the personal injury lawyer who is trying to get as much money as he/she can for their client is can medical providers balance bill from a settlement or judgment of a personal injury claim?

If the provider is Medicare, the answer is no. See 42 U.S.C. 1395(y). In Maryland, medical providers cannot balance bill if an HMO makes payments. See Health General Section 19-710(o); Patel v. Healthplus, Inc., 112 Md. App. 251 (1996).

Regarding other insurance companies, the answer is the provider cannot balance bill. But it depends on the insurance company’s contract with the medical provider. In-network medical providers may not balance bill for covered services under the terms of their contract. They must accept the amount paid by the plan (plus any member Co-payment and/or coinsurance) as stipulated in their contract. The language of the contract will provide the answer. Medical providers that are out-of-network and do not have an agreement with the insurance company, often hospitals after an emergency room visit, may balance bill.

If you are in an HMO or PPO, the law might protect you beyond your co-pays and deductible, but contracting and non-contracting providers may directly bill an HMO member for a non-covered service. Doctors who accept assignment also may not balance bill in Maryland.

In Maryland, CareFirst Blue Cross Blue Shield provides insurance for many of us.  Ultimately, the doctor’s ability to balance the bill will depend on the specifics of the doctor’s contract with CareFirst.  We have not seen every provider’s contract, obviously, but it can also depend on whether the health care provider is in or out of the network.  CareFirst is sometimes helpful with these issues if you do not mind spending time on hold.

Dealing with Health Care Providers That Are Balance Billing Your Clients

Four practice pointers for personal injury lawyers:

  1. Ask to see a copy of the medical provider’s contract with the insurance company. In most cases, the language expressly forbids balance billing (most notably for Maryland lawyers, the Blue Cross contracts that I have seen do). Providers most rarely want to produce the contract because they assume the written contract punishes them at every turn (doctors hate health insurance companies). When our lawyers ask to see the contract, usually they end their quest to balance the bill.
  2. Explain to the health care provider the rule in Plank v. Summers, 203 Md. 552 (1954), a Maryland Court of Appeals case which stands for the proposition that injury victims may recover the “reasonable value” of the health care provider’s services. In the example above, if the health insurer believed the claim for the surgery should cost $5,000, why should the health care provider be able to charge more? Isn’t that really the “value” of the service? If the Plaintiff’s expert testified at trial that the bills were reasonable, necessary, and causally related, it makes this argument more problematic. But normally this issue arises for lawyers just before or after a settlement as opposed to a verdict.
  3. It violates federal law to balance bill Medicare. From talking to some health care providers, some personal injury lawyers interpret this as balance billing is always a crime and that the health care providers need to be “set straight.” This sense of righteousness is emboldened that this is the one part of resolving a personal injury case where the lawyer is acting purely on the client’s behalf because reductions do not increase the attorney’s fee. But it is critical to remember that the health care providers are the ones able to (hopefully) bring the lawyer’s client back to full health. If the accident lawyers seeking the reduction, do not accuse the health care provider and instead treat them with the respect and deference to which they are entitled, the lawyer is more likely to get the reduction to his/her client needs while also fostering a relationship that will benefit future injured clients.
  4. Many of us have clients that are residents of another jurisdiction or sought health care in other jurisdiction.  The rules on balance billing apply with equal force to an out-of-state provider.  The exception is if the healthcare provider is not under contract with a Maryland-licensed HMO and does not have the requisite minimum contacts with our state that would allow the application of Maryland law to the provider.
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