Hospital Bill Dispute

[nemgan]

What is the name of your state (only U.S. law)? CO

Hello, and thanks for your time.

On 6/2/2008, my first child was born and my wife spent 2 days in the hospital. Within 2 months, around $10K in bills were rendered between myself, insurance, the hospital, doctors, etc, all paid in full. 9 months later, I received a $928 hospital bill for charges I never knew existed ($1550 original and insurance benefit reduced it to $928). The hospital never sent a statement of charges while the bill was pending with insurance. Thinking there was a mistake, I learned that the hospital erred, processed the charges wrong which caused a prolonged back and forth with insurance. The hospital admitted to the error, acknowledged the charges should have been $917, and sent me a letter on 4/27/2009 offering to reduce the charges by 30% to $642. My insurance (with the assistance of my benefits coordinator) processed an additional $606 on 4/22/2009.

I wrote the hospital on 5/4/2009 to explain that I would accept their offer and that insurance recently paid $606 and wrote a check for $36 to equal/total the $642 they expected. The check was cashed about a week later.

A couple weeks ago, I received a bill from the hospital for $275 which ignored their offer and simply reduced the charges by $36 from the post insurance total. I submitted the letter I received from them how they offered to reduce the charged and explained how they received the $642 they expected.

They wrote me back explaining that the "payment from the insurance company was not governed by their agreement" and could not accept my reasoning closing this matter. They attached a letter sent on 5/6/2009 (which I never received, and dated after the date I responded with my check) explaining that they received additional insurance funds and offered to reduce the bill by 30% of the total post insurance amount if I replied with payment by early June.

Questions:

1. Does the hospital have any right to discriminate on how they receive their payment? If they were willing to settle for $642, do they have a right to care how those funds are received?

2. Do they have a right to accept my insurance funds, my settlement payment which was cashed in mid May (which was attached with a detailed letter explaining how the hospital was receiving their expected $642) and then renege on their offer?

3. Are there any other legal items I am missing or is the hospital completely correct in their actions?

Thanks again for your time and reply!

[justalayman]

Is your insurance a PPO and if so, is the hospital a listed provider?

[nemgan]

Yes, my insurance is PPO and the Hospital is a listed provider.

[justalayman]

your insurance should have a contract with the hospital to deal with this. A PPO has a contract between the provider and the insurer. Most have a time limit in which they can bill a customer. If they do not bill within that time, they cannot bill (this is a contractual relationship, not controlled by statutes of limitations laws). (doesn't necessarily apply to you. you should ask your insurance provider)

So, on top of that, you should be receiving a EOB. On that EOB, there should be the bill as presented to the insurance, the insurance' determination (allowable or not), if allowable, how much discount is required per their contract, how much the insurance company owes and finally, how much is the patients responsiblity.


So, have you recieved an EOB for this last round of billing? What does it state as your liability?

If you have not recieved one, contact your insurance and find out what the numbers are.

If you have one, what does it state as your liability?

[nemgan]

Thanks for the response.

There are a few different things going on here.

1. The initial claim was rejected due to a timing issue, but the hospital appealed, went back and forth with insurance and initially paid $633 leaving me with a $917 balance.

2. When I confronted the hospital about already paying several of their bills and never receiving any statement of charges regarding the above outstanding balance (thus I was not prepared financially to expect this bill), they admitted to error and offered to settle at a 30% discount, or $642.

3. When I explained this situation to my benefits coordinator, she worked with insurance to have another $606 paid out on the claim. There are a few different EOBs related to this matter, with the lastest one dated as processed 4/22/09 and paid to the hospital 4/28/09 stating my obligation is $311.

4. Per above, the hospital offered to settle for $642 on a letter dated 4/27. They received $606 from in insurance on 4/28, so I wrote a check with a letter of explanation shortly after (dated 5/4) for $36, which was cashed.

Despite this, are you perhaps implying that the figure on the EOB trumps the hospitals settlement offer? Why should it matter if the hospital ultimately receives what it was willing to settle for? Does the fact the they cashed my funds count as accord and establishment?

[justalayman]

Does the fact the they cashed my funds count as accord and establishment?

accord and satisfaction?

An offer of accord and satisfaction is where one would pay an amount believed to be correct although there is a dispute as to the actual amount owed. You would note it as such on the instrument of payment.

Was the amount in dispute? Not by your statements.

2. When I confronted the hospital about already paying several of their bills and never receiving any statement of charges regarding the above outstanding balance (thus I was not prepared financially to expect this bill), they admitted to error and offered to settle at a 30% discount, or $642.

3. When I explained this situation to my benefits coordinator, she worked with insurance to have another $606 paid out on the claim. There are a few different EOBs related to this matter, with the lastest one dated as processed 4/22/09 and paid to the hospital 4/28/09 stating my obligation is $311.

4. Per above, the hospital offered to settle for $642 on a letter dated 4/27. They received $606 from in insurance on 4/28, so I wrote a check with a letter of explanation shortly after (dated 5/4) for $36, which was cashed.

I see. You negotiated a discount AFTER the insurance company issued a check for $606 which was paid on the premise they were paying on the pre-negotiated fees.

So, you owe the insurance company the money, not the hospital. What you did hints at insurance fraud.

It looks like you are intentionally posting the situation in a non-chronoligical order just to hide the fact that you negotiated the discount after the insurance company agreed to pay and actually issued a check for the additional $606.

EOB issued 4/22 your balance $311

letter of offer of settlement 4/27 for $642

Insurance payment received by hospital 4/28 $606

Obviously the insurance company could not have learned of the deal agreed upon between you and the hospital on 4/27 and subsequently cut a check so the hospital would have received it by the next day so they were paying on the $928 bill.


While I do not believe the hospital is owed anymore than has been paid them, what you owed would have been different had the insurance company been aware of such a discount. As such, you figured out how to get the insurance company to pay more than they were required to do.

What may have happened is the insurance company was apprised of the "deal" and has subsequently reversed part of the payment leaving you with the balance they are demanding. You might want to call the insurance company and explain the situation to them and get their take on it.

[nemgan]

Thanks again for your response and insight.

For starters, I had no dealings with the insurance company. My company's benefits coordinator worked with insurance when I described my situation to her and she came back a few days later and mentioned another $606 would be paid. I phoned the insurance company. They said the reason they paid another $606 was because due to the fact that the hospital processed the claim wrong, they misprocessed as well and the original amount that should have been processed was $1239, leaving a balance of $311.

Therefore, the hospital made their offer prior to knowing that insurance would pay more.

But does this really matter? The hospital obviously would have been satisfied with settling for $642, until they realized that a chunk of that came from insurance? Does the information above permit the hospital to nullify their offer?

The accord and satisfaction (not establishment ) would be that with my $36 payment accompanied with my letter of explanation that they cashed would add up to the $642 they expected. I believed that it was legitimate since they cashed the check that with insurance $ totaled the $642. The hospital obviously feels that they could renege/nullify their offer.

Thanks again.

[justalayman]

the offer of accord and satisfaction requires the amount to be in dispute. You had no dispute of the amount when you made the payment so it would not be applicable.

But does this really matter? The hospital obviously would have been satisfied with settling for $642, until they realized that a chunk of that came from insurance? Does the information above permit the hospital to nullify their offer?

as I said, you might want to check to see if the insurance company required the hospital to return some of the money once they saw that the hospital was not billing you the same thing they were being billed.

This is not all that unusual. If an insurance company makes an overpayment (which is what this ended up being on the insurance companies part), they simple reverse the payments. That would leave the balance due to you.

Check on it and see if that is what happened.

[nemgan]

Contacted insurance again and they are not aware of any reversal in charges on this matter or any extra correspondance with the hospital.

So, back to the original question, does the hopital have the right to nullify/renege on their offer (which I have in writting) based on the information provided? If they are, then I still owe them money. If not, and they are not allowed to do so or discriminate on how their new required balance is reached, then this matter should be concluded. Yet, they wrote me last week to tell me that "payment from the insurance company was not governed by their agreement", yet the original 30% discount offer letter simply mentions that once they receive the $642, they would adjust the balance to $0.

Thanks again, you've been great help.

[justalayman]

if the insurance company does not have a problem with this, I would argue as you have that they agreed to $XX and they got $XX.

Where it came from is irrelevant.

the only problem I can see is if the hospital either resubmits using the negotiated number or the insurance company realizes they paid on a fee that had subsequently been negotiated down.

As I said, this hints at insurance fraud if you unjustly gain at the expense of the insurance company. As long as they are aware of the situation, completely aware, I would argue that you have paid the agreed upon amount. If the hospital still disagrees, ask them to provide an accounting of this particular charge including all of the debits and credits. Be sure they use the negotiated price and they should come up with 0 owed.