Misled about Hospital being in network NJ

[brian457!]

What is the name of your state? NJ

We recently had a baby delivered at a NJ hospital that was out of network with our insurance, not knowingly to us. However, prior to our visit, we were told by a hospital employee that the hospital would be covered by our insurance, which we acted on. Now we are being balance billed at out of network rates for the rest. Part of our bill is being treated as in network for co-insurance due to labor being treated as an emergency, however the inpatient stay is not. Also, our insurance is an employer self-funded policy, and did not opt in to the NJ Balance Billing laws, see link https://legiscan.com/NJ/text/A2039/id/1810417.

1. Is there anything, including legal action, we can leverage against the hospital to not balance bill us given they told us the hospital would be covered as in network? I realize this is our responsibility to find out, but they also shouldn't be advising us on this if they have a vested interest.

2. Our insurance did say we can appeal to them since we were told bad info by the hospital. If we appeal and are successful, the insurance company could cover it as in network (higher co-insurance on the out of network rates) or cover higher amounts of the customary costs per billing code. While a nice outcome, I'm skeptical that the insurance company is going to right the wrongs of the hospital.

3. Also, given the labor was treated as an emergency, can we also appeal to the insurance company that the rest of the stay and the baby were from the emergency labor and should be covered in the same way (ie in-network)?

4. Are there any other points to exhaust? Potentially appealing to my NY based employer given the plan is self-funded and not opting into NJ protection laws? Or entering into an arbitration with the state (https://njpicpa.maximus.com/njportal/public/c32QA.xhtml#Q19)?

Appreciate the help

 

[zddoodah]

prior to our visit, we were told by a hospital employee that the hospital would be covered by our insurance, which we acted on.

I take it you didn't confirm this with your insurer. Correct?

Is there anything, including legal action, we can leverage against the hospital to not balance bill us given they told us the hospital would be covered as in network? I realize this is our responsibility to find out, but they also shouldn't be advising us on this if they have a vested interest.

There's no legal action for you to take, but you obviously can refuse to pay, in which case the hospital may sue you, at which point you could assert the incorrect representation as an affirmative defense.

Also, given the labor was treated as an emergency, can we also appeal to the insurance company that the rest of the stay and the baby were from the emergency labor and should be covered in the same way (ie in-network)?

Of course you can appeal, but we have no way of knowing if you'll be successful.

 

[cbg]

I realize this is our responsibility to find out,

Bingo.

 

[Taxing Matters]

I realize this is our responsibility to find out,

Bingo.

The hospital didn't have an obligation to check out ahead of time whether it would be covered as in-network by the insurer. The problem is, however, that while it didn't have to say anything, the hospital employee nevertheless undertook to provide an answer knowing (or should the employee should have known) that the patient might rely on what the hospital told him. So the hospital does have a risk that it may be liable for the representation it made. The issue would be whether a jury would find that the patient reasonably relied on that representation. I think a lot of people on a jury would say that its reasonable to expect that if a hospital does undertake to provide that information that the information will be correct. After all, the hospital ought to know which plans it has agreed to participate in as an in network provider, right? This is something that business people and others need to remember: while you may not have an obligation to do something, if you nevertheless voluntarily assume that responsibility then in some of those instances you may be liable if you mess it up.

The OP should try the insurance company appeal first, if there is something in the insurance that the OP can use to argue that it should be covered by the insurer. I've succeeded doing that myself with my insurance company on two occasions.

But if that doesn't work and the hospital won't budge, the OP should see a civil litigation attorney. I am not going to rule out that he/she has a good claim against the hospital based on the principle of detrimental reliance or other quasi contract theory.

 

[cbg]

I don't necessarily think the OP is dead in the water either, but I see two points of defense for the hospital - (1) was the hospital employee AUTHORIZED to be giving out that information and (2); the hospital bill WAS covered by the insurance - just not at the in-network level.

 

[Zigner]

The problem is, however, that while it didn't have to say anything, the hospital employee nevertheless undertook to provide an answer knowing (or should the employee should have known) that the patient might rely on what the hospital told him.

Patient: Do you accept Blue Shield?
Hospital: Yes.

The hospital answered correctly, but that doesn't mean that the patient's specific plan provides coverage.

 

[Taxing Matters]

Patient: Do you accept Blue Shield?
Hospital: Yes.

The hospital answered correctly, but that doesn't mean that the patient's specific plan provides coverage.

The details of exactly what the employee said matter, of course. The OP can't rely on something NOT said. But if the hospital employee specifically said that the hospital was in network for his plan, then the hospital might be on the hook for that.

 

[Taxing Matters]

I don't necessarily think the OP is dead in the water either, but I see two points of defense for the hospital - (1) was the hospital employee AUTHORIZED to be giving out that information and (2); the hospital bill WAS covered by the insurance - just not at the in-network level.

As I said with Zig, the details of exactly what the employee told him matter. As for authorization, even if the hospital employee was not specifically authorized by the hospital to give out that information the employee may have apparent authority by virtue of the position held. For example, if the employee was in the hospital billing department that may confer apparent authority for the employee to provide billing related information. After all, a patient won't know the formal authority each employee in a hospital has and aren't likely to ask. When was the last time you actually asked a hospital employee for a copy of their delegation of authority to do something? I'd be surprised if you ever asked that. I've never asked for that and I've had lots of dealings (unfortunately) with hospitals over the course of my adult life.

When you deal with the government it's another matter because often the law is that the government cannot be held liable under a theory of apparent authority. But private business doesn't have that shield that government does.