Health Insurance Reimbursement Requests by Healthcare Recoveries, ACS, Rawlings, Ingenix

Healthcare Recoveries, ACS, Rawlings, Ingenix. Who are these companies and why are they writing to tell you that you owe reimbursement to your health insurance company after a car accident in Savannah? Today we are  going to discuss an important topic to people that are victims of car accidents.  The topic is, what are your reimbursement obligations to your health insurance company if they have paid medical bills as a result of an accident for injury?  We are going to break this down using a number of hypotheticals.  So let’s start.

Let us assume that you have been in a car accident and that you have gone to the emergency room and incurred a bill.  You should give your health insurance card information to the hospital.  It does not matter that it is a car accident, your health insurance will still cover the situation. 

Now the hospital and your health insurance company may both ask you at some point, we need to know who your own car insurance company is.  That may seem like an odd question.  The reason they are asking this is they want to know if you have any medical payments coverage.  If you have medical payments coverage, which is a separate kind of coverage on your own car policy, that money has to be paid out first.  It is what we call a primary payor.  Your health insurance pays secondary.  So let us assume that you have no medical payments insurance, in that case health insurance would process and pay each bill under its plan.  If you did have medical payments insurance, say $1000 or $5000, first the hospital could bill its bill against those amounts.  They would pay out and once they are gone the rest gets billed to health insurance.  So just remember, health insurance does pay for medical care after accidents, it pays secondary to any medical payments coverage that you may have.

Let’s move on now to the topic of, do you have to pay them back?  Let us assume that you had a $10000 bill from the hospital.  This was processed by your health insurance which might be United, it might be Blue Cross Blue Shield or any other number of health insurance companies.  They have an internal table that tells them how much they pay for each procedure.  So let’s assume that there was a $10000 bill.  They run it through their software system and they say well, we will allow $6000.  You would receive a piece of paper in the mail some weeks later called an EOB.  That stands for Explanation of Benefits.  An EOB form says, hey, this doctor submitted this amount, we allow this amount, we paid this amount and you the consumer, owes this amount.  You will pay attention to the amount that you owe at the tail end.  Come to the end of the case, let’s assume that everything has gone just fine, that you have healed up, that your medical bills have been taken care by health insurance and that you are about to settle your case with the at fault driver’s insurance company, and they are going to pay you $20000 hypothetically.  You will be getting letters from various firms hired by your health insurance to get them reimbursement.  Ingenix is the name of one of them, Healthcare Recovery is another very common company, but these companies all do the same thing.  They are saying, hey, you as the consumer, under your health insurance contract, you agreed to pay us back, if you get paid for medical bills that you are getting a settlement for.  So it does not apply if you fall off a ladder at your own house and you are not claiming against anybody else, they do not get reimbursed for that.  But if you are claiming against another driver for breaking your leg, and for the medical bills, and you get paid for it, there is an argument to be made by the health insurance company that they deserve to be paid.


So the first question is:  Is the contract language in the health insurance contract written in their favor such that they have this right of reimbursement?  In most instances they do, although there are a number of companies that do not.  So once that issue is set to the side, the next analysis is whether or not the health insurance plan is one that is self funded or whether it is a health insurance plan that is insurance funded. 

Now just because you know there is a health insurance company involved does not mean it is insurance funded.  The question really is, do all the employee premiums in the pool pay into a bucket of money out of which claims are paid?  That is a self funded kind of plan.  If they are self funded, then they have rights that other companies do not have. 

We’ll give you a specific example.  Let us assume that your plan is with a large company.  Let’s assume it is Faber Castell, the pencil company, and all the employees pay money into a pool and Blue Cross administers the pool.  That is a self funded plan.  That means that plan was created under the ERISA statute, which is a federal law and it is entitled to all the protections of the federal law.  This is important because Georgia has its own law and Georgia has a law that says you do not have to pay back these reimbursement amounts unless you make out like abandon your case, unless you are made whole.  And so in most cases you are going to be settling it, compromising it for less just to get it done early, so you are not going to be made whole.  So this is a fight between the state rule and the federal rule and in direct fights federal rules usually win.  They are the big kid on the block; we call if federal preemption.  So the Georgia law says, hey you don’t have to pay it back in most circumstances, federal law says you always do, the question becomes does federal law control this plan or does the State of Georgia control it? 

Examples of plans that are state controlled would be plans that are insurance funded, meaning you bought it yourself.  You are just a self employed guy.  That would be insurance funded.  If it is a large company paying into a pool, it is more likely to be self funded.  So again, if it is self funded, you have to deal with the reimbursement request.  They may negotiate with you but you have to deal with it.  If it is insurance funded, you can raise the Georgia law and say, Georgia law controls here we do not have to pay back unless we are made whole and you have got a lot more leverage in that situation. 

One very common situation, where ERISA does not come into play and that means that Georgia law is in control, is where the person in the policy is an employee of the State of Georgia.  Most State of Georgia plans are not ERISA plans, that means the ERISA rule saying they get paid back 100% protecting them completely is not in play.  So, the question of health insurance contract reimbursement is a complicated one, it is very smart to get a lawyer to look at it, there are some situations where you can get out of paying them back if you are not made whole.  But in many situations, you are going to be in a fight with the health insurance reimbursement company.  It is highly inadvisable to simply ignore these people, for more significant amounts it is likely they will come after you and sue you.