Colorado law establishes clear rules for how hospitals must handle billing after treating patients injured in auto accidents caused by another party’s negligence. The law ensures hospitals prioritize billing health insurance and other identified payers before asserting liens against the injured person’s compensation. The Colorado law balances hospitals’ right to recover costs with protections for injured individuals. Unfortunately, we see billing companies violating this law regularly.
Key Requirements for Hospital Billing
- Obligation to Bill Insurance First
Under Colorado law, hospitals licensed by Colorado’s Department of Public Health and Environment must submit reasonable and necessary charges for services to:
- Property and casualty insurers (e.g., auto insurance covering medical payments)
- Primary medical payers, including:
- Health insurance plans
- Health maintenance organizations (HMOs)
- Preferred provider organizations (PPOs)
- Employee benefit plans
Hospitals must bill these insurers and plans using the same processes applied to patients whose injuries are unrelated to another party’s negligence. This ensures that patients injured in accidents are not unfairly treated compared to other patients.
Unfortunately, I repeatedly see abuse from billing companies that violate this law. Why would they do this? The truth is that by filing a lien, they usually can recover significantly more compensation because health insurance only pays discounted rates for treatment. If they don’t bill the health insurer, they are free to ask for full payment on the medical bills without a discount. Don’t get taken advantage of by the billing companies seeking to take money that is rightfully part of your injury claim. There are situations where the hospital can create a lien but it is not that common.
- When No Payers Are Identified
If no insurance coverage or other payer of benefits is identified for the injured person, the hospital may create a lien against the settlement or judgment the injured person may receive from the at-fault party.
- Post-Lien Discovery of Insurance
If the hospital discovers a payer of benefits after asserting a lien, it must still make a good-faith effort to submit the charges to the identified insurer. This requirement protects patients by potentially reducing or eliminating the need for a lien.
Protections for Injured Patients
Colorado law provides several safeguards to prevent financial harm to patients:
- No Unlawful Collection Attempts: Hospitals cannot collect or attempt to collect money from patients in violation of other Colorado statutes.
- Attorney Lien Priority: Attorney liens for legal fees take precedence over hospital liens, ensuring legal representation is paid before hospitals claim remaining settlement funds.
- Penalties for Violations: If a hospital asserts a lien in violation of this statute, the injured person may file a lawsuit in district court to recover twice the amount of the improperly asserted lien.
Definition of a “Payer of Benefits”
The law defines “payer of benefits” broadly to include:
- Auto insurers with medical payment coverage
- Health insurers and HMOs
- Employer-provided health plans
- Medicaid and other medical assistance programs under the Colorado Medical Assistance Act
- The Children’s Health Insurance Program (CHIP)
- Any other insurance or benefit plan available to the injured person
Implications for Patients
If you are injured in an auto accident, understanding this law can protect you from financial burdens:
- Ensure Your Hospital Bills Insurance First: Confirm with the hospital that they have billed your health insurance and any applicable auto insurance before considering a lien. However, remember it is unlikely that the at-fault party’s auto insurance will pay your hospital bill without you releasing the at-fault party from your ability to file a lawsuit.
- Know Your Rights: If a lien is asserted against your settlement, ensure the hospital has complied with Colorado law.
- Seek Legal Help If Necessary: If you believe a lien has been improperly applied, you can challenge it in district court and may recover significant damages.
Implications for Hospitals
Hospitals must follow the statute to avoid penalties and legal challenges. Compliance involves:
- Exhausting all identified insurance options before asserting liens.
- Adjusting or removing liens if a payer of benefits is identified after a lien is created.
- Ensuring billing practices are consistent for all patients, regardless of the cause of their injuries.
Conclusion
Colorado law ensures fairness in medical billing after an auto accident by requiring hospitals to prioritize insurance billing before asserting liens. For injured individuals, this law provides critical protections, helping to preserve settlements or judgments from undue medical claims. Understanding your rights under this law can help you navigate the financial aftermath of an auto accident more effectively.
If you have a hospital lien filed after your car accident in violation of this law, you can recover two times the amount of the hospital lien! If you have been taken advantage of or the billing companies are refusing to bill your health insurance, contact our office. We have helped hundreds of clients resolve this issue in their favor after being having an auto accident injury, give us a call for a free consultation.
Ryan Malnar, Personal Injury Attorney
