U.S. Hospitals Sue Insurers and Canadian Travellers For Underpaying Bills
Nov. 26, 2007
Canadian travellers and their out-of-country health insurers are being sued by American hospitals for underpaying their bills for emergency medical services provided in the United States. According to hospital cost-containment experts, the legal actions could lead to more foreign travellers being required to pay deposits directly to hospitals when treated, or being billed for remaining balances after they return home.
The hospitals, among them Holy Cross in Fort Lauderdale, Palms of Pasadena in St. Petersburg, Bay Medical Centre in Panama City, all in Florida, and Edinburgh Medical Center in south Texas, have named Royal & SunAlliance Insurance Company of Canada and its emergency assistance and cost containment representative Global Excel Management, based in Quebec, as defendants in actions brought in the Ontario Superior Court of Justice. The initial claims total well over $1 US million, but could soar to many multiples of that if the actions grow to class action status in the U.S. courts.
These and other hospitals contend that cost containment companies representing foreign insurers routinely underpay and in some cases adopt a “take it or leave it” attitude to bills submitted for treating non-resident patients. Cost containment companies, whose job it is to negotiate hospital fees for their foreign clients the way domestic insurers negotiate for American insurers, say tough bargaining is necessary as American hospitals routinely over-charge, over-treat, cost-shift, and generally charge whatever traffic will bear to remain profitable.
The truth lies somewhere in between. Though the vast majority of hospitals in the United States are non-profit institutions, they are required to keep a close eye on their bottom line as there is no government bail-out if they lose money. And because of the large numbers of uninsured, approximately 5 to 6 percent of hospital expenses on average are attributable to bad debt or uncollected bills.
All hospitals in the U.S. are required by law to treat medical emergencies regardless of the patient’s ability to pay or whether or not the patient is insured. That does not mean, however, they can’t ask a foreign patient for credit card approval to pay a deposit, at least until they can verify insurance coverage.
The result, according Dr. Colin Plotkin, a British Columbia-based cost containment expert who negotiates settlements between U.S. hospitals and foreign insurers, is that more and more Canadian travellers are likely to be faced with demands for up-front payments upon admission to U.S. hospitals and are also more likely to be billed for outstanding balances left behind by cost containment companies that sometimes pay only 15 to 30 percent of a hospital’s submitted bill.
If you have been required to put up a deposit before treatment or have been balance billed by a U.S. hospital when you thought your medical costs were to be fully covered, we would like to hear from you. We’d like to stay on top of this situation.
© travelinsurancefile.com 2007
Hi, I have been a permanent resident of Ontario since 1996. In 2009, I was hospitalized at Henry Ford Hospital in Detroit for 5 days and tested for over-production of blood platelets. When OHIP refused to pay anything, I was billed an astounding $24,000 for the medical service alone — not the hospital costs. This amount is more than I made that year. I was even tested by a heart specialist, not because it was relevant, but because each specialist wanted to be “thorough”. The Hospital refused to negociate with me and turned the billing over to an agency for collection. They seem to be relentless. I have already paid a number of other billings. I don’t know how I can get a reduced billing. Thanks, Virgil
Virgil:
I assume this was not pre-approved by OHIP, and you went to Henry Ford with the intention of having your existing blood disorder treated. In effect, it was not an unforeseen emergency?
Henry Ford has a lot of Canadian patients and it could be they have been burned a few times by non-payments so they’re taking a hard line. Usually American hospitals are more than willing to negotiate. In this case you might make a one-time, take it or leave it offer to the collector: tell them you are on a low income, there are no deep pockets, you are prepared to pay X dollars within 48 hours, otherwise they get nothing. Be realistic in what you offer but be tough. But don’t give them any money unless you have a letter signed by someone in authority clearly stating that the payment you make will be considered payment in full and they will cease any other attempts at collection. Don’t argue the price of the bill–it’s not that much out line for five days of investigations. Just fix your price and stick to it. Hospital collectors are used to taking a lot less. Good luck.
Milan