Payment on Motor-Vehicle Claims: An Untapped Source of Revenue in Uncertain Times

After a car accident that caused significant bodily injury and vehicle damage, Monica, a single-mother, is facing two challenges. First, she needs medical care, and second, because she has a high-deductible health plan, that care presents a significant financial burden.  

Monica is like 3 million people across the country who need healthcare services after getting involved in a motor vehicle accident. By our estimates, providers are losing out on hundreds of millions of dollars by not pursuing claims for Medical Payments (MedPay) or Personal Injury Protection (PIP) coverage, which often are included with automobile insurance policies to pay for immediate and necessary medical services after car accidents that result in injury.  

Based on Kemberton’s experience, approximately 3 – 5 percent of emergency department (ED) visits are due to such accidents, for which MedPay or PIP coverage is quite common. Yet in hospitals only 22 percent of the cases in which such coverage is present do hospitals access that coverage. Any time such coverage is overlooked, the hospital loses revenue—which is all the more concerning in today’s payment environment with uncertainty swirling around about Medicare and the impact of the end of the individual health insurance mandate. In such a time, executives are compelled to tap into all possible revenue streams. 

What happens when Monica arrives at the hospital after her accident can provide insight into why hospitals miss out on MedPay and PIP payment for so many claims, and how they can fix this problem. The person in registration who conducts Monica’s intake should request her health insurance details, validate that she was involved in a car accident, and capture information about Monica’s and the other driver’s car insurance. But this step all too often does not occur; Kemberton data show that U.S. hospitals verify the presence of MedPay or PIP coverage only 51 percent of the time.  

The solution requires teamwork and the appropriate expertise. The IT team needs to ensure that this information flows from registration to the business office, where billers can act on it and get the hospital paid for services rendered. 

With information about the drivers’ car insurance and Monica’s health insurance, the biller working on her case can see that her MedPay coverage is $2,500—and that the driver who hit her has bodily injury coverage to pay the rest of her deductible. 

Here’s what the business office should do next: 

• Submit the appropriate and timely paperwork to perfect a claim for MedPay or PIP monies 

• Negotiate with all parties’ attorneys 

• Navigate through the lien process to perfect the hospital’s claim and ensure that insurance covers the cost of care 

This process sounds simple. Here’s the reality: Billers at hospitals around the country are accustomed to working primarily with Medicare, Medicaid, or commercial health insurance companies. These team members have very little experience negotiating with attorneys, parsing through car insurance policies, or navigating through the lien process. To capture that lost revenue, however, healthcare organizations must do a better job of preparing billers for these inevitable claims. A training program and useful resources within easy reach can help ensure these billers are ready for such claims. 

Once hospitals apply the appropriate expertise to this problem, they stand to receive significantly more than the capitated rates of most commercial and government health carriers and, at times, the full amount of the gross charges on the claims. The reason is that car insurance companies don’t pay capitated rates for medical procedures; rather, they pay the full amount of the gross charges up to the MedPay limit per accident.. 

Patients’ healthcare coverage obtained through their car insurance are an important, if under-recognized, source of payment for hospitals, providing them with the much-needed financial means to deliver essential care in their EDs—often for patients who have suffered catastrophic events the likes of which they might see only once in a lifetime.  

George Abatjoglou is CEO of Kemberton Healthcare, Franklin, Tenn.