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Author: Ronald T. Luke, JD, PhD
Past medical expenses are a major element of damages in many Texas personal injury cases. This blog post frames three questions about past medical expenses the Legislature should consider in a future session.
- Should healthcare providers have to file a “clean claim” with the injured party?
- Should injured parties with insurance coverage and their healthcare providers be required to file claims with the insurer to take advantage of negotiated rates?
- When the injured party does not have insurance coverage, should the state regulate the maximum rate providers may charge the injured party?
Should healthcare providers have to file a “clean claim” with the injured party?
The Insurance Code defines a “clean claim” as part of the prompt pay statute. It specifies the data elements that must appear on a provider’s bill before a health plan must process the bill. The requirements closely follow the data elements required to bill Medicare using the standard billing form for a facility (CMS 1450) or a practitioner (CMS 1500).
No state law requires a healthcare provider to give the patient a “clean claim” when no health plan is billed. The form and content of bills healthcare providers send patients in personal injury cases vary widely and often omit important data elements needed to determine the reasonableness of charges, the medical necessity of services, and the relatedness of the services to the injury that is the subject of the litigation. All healthcare providers that bill Medicare, Medicaid, or any commercial insurer have access to billing software that can produce a “clean claim” in a standard paper and/or electronic format. Should healthcare providers be required to provide a clean claim to all patients as a precondition for payment of the bill?
Should injured parties with insurance coverage and their healthcare providers be required to file claims with the insurer to take advantage of negotiated rates?
While over 20 percent of the Texas population lacks health insurance, a large majority do have coverage. If a plaintiff has a work-related injury, and the employer has workers’ compensation coverage, the plaintiff has insurance coverage for the injury even if he or she lacks health insurance. Therefore, many plaintiffs, if not most, have some form of insurance coverage for medical expenses.
Usually plaintiffs have an obligation to mitigate damages and their recovery may be limited to the damages had they applied reasonable mitigation. One way to mitigate medical expenses is to file claims with insurers to take advantage of regulated rates (e.g., Medicare, Medicaid, workers’ compensation) for any provider or negotiated rates (e.g., Blue Cross Blue Shield, commercial health plans) when the plan has a provider contract with the treating provider. These rates will range from ten percent to seventy percent of the provider’s billed charge. However, today state law does not require plaintiffs to use their insurance coverage to mitigate medical expenses. Should it do so?
When the injured party does not have insurance coverage, should the state regulate the maximum allowable rate providers may charge injured parties?
It does so now for work-related injuries though the Department of Workers’ Compensation medical fee schedules (MFS). The MFS pay facilities and practitioners between 100 percent and 200 percent of the Medicare fee schedules. Providers may not balance bill injured workers. The MFS have been in place for over a decade and have provided adequate access to care for injured workers. Because of the lesser certainty of payment fee schedules in personal injury cases might need to pay higher percentages of Medicare. Basing payment on a multiple of Medicare rates instead of provider charges has eliminated most medical fee disputes in Texas workers’ compensation claims. Could a similar approach control medical expenses to the benefit of plaintiffs and defendants in personal injury cases?