Complications arise when patients have policies written in one of 12 no-fault states.
After an air ambulance crew swoops a patient away from a traumatic accident, they stabilize the individual and rush the patient to the nearest trauma center. The race to care often means the patient survives, but recovery may take weeks. The bills for that expensive care could be covered by a small-but-critical area of coverage: third-party liability insurance.
Understanding the complexities of third-party liability can mean the difference between revenue protection or revenue loss for providers.
Third-party liability insurance coverage is the primary responsible payer for patients admitted to hospitals because of auto accidents or on-the job injuries. For providers, this can be a complicated area to receive payment for care that is delivered.
The primary payers for the care of people injured in car accidents are the auto insurance policies of at-fault drivers or, in some cases, optional Med-Pay insurance, which covers vehicle passengers, or Personal Injury Protection (PIP) insurance, some level of which is required in 16 states. Once certain limits are reached, then a secondary insurance, often the patient’s health plan, takes over.
In the event of a claim from on-the-job injuries, the primary payers for that care are employers’ workers’ compensation insurance policies.
Collecting on third-party liability claims requires tracking down liability to responsible parties’ insurance. Providers also need to understand the compliance issues for the particular state where the auto insurance and workers’ comp policies were written.
Complications arise when patients have policies written in no-fault states. Under no-fault laws, insurance companies will pay policyholders’ car accident claims, no matter who was at fault. Twelve states presently have some version of no-fault laws: Florida, Michigan, New Jersey, New York, Pennsylvania, Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota, and Utah.
Outside those 12 states, at-fault drivers’ insurance are the primary payers. All states, with the exception of New Hampshire, require drivers to have insurance to meet cost obligations related to an auto accident.
Some patients involved in auto-related accidents carry Med-Pay insurance, which covers medical costs due to an accident for the drivers or passengers in policyholders’ cars, or PIP insurance, which can cover medical costs and lost wages.
Compliance with third-party liability requires an understanding of state laws. The various third-party liability insurance coverages are complex and in situations where there are at-fault parties, legal options can exist for applying liens to protect hospitals’ interest in accident-related recoveries.
Understanding the complexities of conditional billing health insurance in auto-accident related claims is also key to protecting providers’ revenues. These complexities include understanding and staying in compliance with the Centers for Medicare & Medicaid Services Medicare Secondary Payer regulations and, in the case of Oregon, modifying provider approaches to CMS’s “prompt period” rule.
While this patchwork system of payment for car accidents or workers’ compensation claims may represent a small portion of providers’ accounts receivables, it can be critical income to trauma hospitals in particular. Success requires that providers have the ability to track down the myriad details about specific automobile and employer insurance policies and their coverages, as well as applicable state laws.
Revenue cycle vendors can utilize their resources and expertise researching this level of detail, allowing healthcare systems to focus their efforts on recovery and clinical wellness for patients.
This article originally appeared on Parallon.com.