Arbitrary Healthcare Pricing

On Behalf of | Mar 26, 2015 | Around the Firm

Lawyers at Marsh, Rickard & Bryan have spotted a trend that affects our injured clients every day: Hospitals are increasingly going after the proceeds of tort recoveries and are seeking exorbitant recoveries against both their insured and uninsured patients.

MRB attorney Dylan Marsh wrote about this trend in the newly published issue of the American Journal of Trial Advocacy.  The article is called “Arbitrary Healthcare Pricing and the Misuse of Hospital Lien Statutes“, 38 Am Jur. Trial Advoc. 255 (2015)

By statute in Alabama and almost all other states, hospitals have long had the right to seek recovery of its medical charges from a personal injury patient-claimant’s settlement with a tortfeasor.  Hospitals have for years maximized their reimbursement by charging the uninsured claimant their exorbitant “charge master rates” that may be five times higher than the rates the hospitals regularly receive from private and public insurers.  But more recently, providers have turned their sights to claimants covered by private health insurance or government sponsored plans such as Medicare or Medicaid.  By refusing to bill the patient’s insurer at the rates previously negotiated or by foregoing the governmental plan’s payment, the hospitals seek to recover more profit than they bargained for or previously agreed to accept.

The article provides a brief historical analysis of the purpose of hospital lien laws, an analysis of how courts have treated the efforts at misuse and some helpful practical suggestions for protecting both uninsured and insured claimants from excessive hospital charges.

Mike and Dylan recommend that attorneys who represent claimants find out through discovery what hospitals routinely take as payment for the same services.  Then they can depose the hospital representatives to establish that the rates the hospital is charging our clients is exorbitant in relation to the true value of the services.

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