Despite the advanced automotive technology offered on new model cars, such as accident avoidance using vehicle installed radars, lane departure warnings, and even Tesla’s autopilot for its cars, motor vehicle accidents still account for nearly 3 percent of all emergency department (ED) visits according to the Centers for Disease Control and Prevention.
More than half of automobile accidents involve multiple automobile insurance policies. The rules of when and how that coverage is applicable are influenced by a number of factors, including the type of coverage, state laws where the policy was issued, state laws where the accident occurred, the cause of the accident, and other extrinsic factors such as whether the driver’s ability to drive was impaired at the time of accident. This complexity does not even begin to factor in the coordination of benefits with any health insurance the patient may have.
These factors create a challenge for healthcare providers, causing some organizations to simply write off auto insurance claims as losses. Increasingly, however, healthcare organizations can navigate the complexity of these multiparty claims to obtain full payment by taking a comprehensive and diligent approach to this specialized type of revenue cycle.
Seeking Full Payment from Auto Insurers
Even with all the complexity involved, pursuing payment from auto insurers is worth the effort for healthcare providers because in most states, such payment can be a higher percentage of the billed charges when a driver has adequate coverage. A comprehensive accident and injury revenue cycle process can ensure that providers are fairly compensated for delivered care, regardless of the number of parties involved.
In 2015, the Insurance Research Council (IRC), a consortium of the top automobile and casualty insurance companies, released the findings of its comprehensive review of the trends in treatments, costs, and compensation in automobile accidents. The study found that, overall, the severity of automobile accidents has decreased, but the cost of auto accident-related medical care has increased. Therefore, a safe assumption is that healthcare costs are rising more rapidly that the severity of the accidents is declining. However, the IRC also found that less severely injured claimants are receiving a larger portion of the claim payment.
The study results indicate that payment for these claims is stable or growing, if managed properly. Because most automobile policies have limited benefits, the claims least likely to get higher payment are those where the patient is most severely injured, which also increases the revenue cycle management complexity.
The first step a healthcare provider will want to take is to identify the different types of benefits in all the affected patients’ auto insurance policies. The most common types of benefits are no-fault medical-only coverage and personal injury protection, which cover medical and other damages. Bodily injury and uninsured motorist are fault-based coverage and compensate providers only for an injured patient who was not responsible for the auto accident.
Once policies and benefits are identified, healthcare provider business offices will then want to coordinate insurance benefit information from multiple parties and bill all identified insurers, following up until there is a resolution. Other coverage types, which should be considered when appropriate, include workers’ compensation for employees driving on the job, hired auto coverage under commercial policies, and excess or umbrella coverage for policies with higher but still inadequate limits.
Complicating this process are litigating attorneys, which, according to the IRC’s research, are involved in a significant number of motor vehicle accident settlements. For healthcare providers, attorneys who represent patients involved in accidents can assist in resolving claims. In cases of disputed liability, an attorney can be helpful in getting payment on a claim that otherwise would have been denied. Nonetheless, attorneys increase the time required for payment and will collect a significant fee on the claim.
The healthcare provider’s business office will need to communicate with attorneys representing patients to follow claim progress through payment. It may be advantageous for the provider to involve its own attorney in the process because, even with the best processes, legal proceedings, such as interpleaders and lien enforcements, are an inevitable part of any third-party liability program.
Medicare and Medicaid
Revenue cycle programs for accident claims always should consider coordination of benefits. Medicare is the secondary payer when third-party liability is involved. According to the Medicare Secondary Payer rules, the liability claims should be pursued as primary. In cases where the liability claim does not pay promptly, then Medicare may be billed conditionally. Medicare defines “promptly” as 120 days. After 120 days, the healthcare provider may file a conditional claim with Medicare. Upon filing a conditional claim, the healthcare provider must abandon all efforts to pursue the third-party liability insurance except for standard Medicare deductibles and copayments.
Medicaid similarly is the payer of last resort. According to most state Medicaid regulations, medical providers are required to bill other insurers and third-parties that are liable for a patient’s medical expenses before Medicaid can be billed.
Throughout the auto insurance billing process, just as with health coverage, the business office will want to screen and negotiate all payment reduction requests from auto insurers and attorneys within your parameters. When payments are received, healthcare providers should verify that payments are correct and that recovery complies with their fee schedule or agreed payment and pursue any claims through the appeals process, if needed.
Seeking payment for care delivered due to an automobile accident often presents a billing challenge for healthcare providers. Nonetheless, pursuing these claims can and should be a vital part of any business-office operation to help sustain adequate financial performance in today’s healthcare climate.
Brad Williams is CEO, RevClaims LLC, Jackson, MS.