An arbitration clause is the new normal in health care provider contracts that patients must sign. Why? They usually favor the big hospital over the little consumer and remove the possibility of a lawsuit.
But what happens when a patient is better off trying to resolve a billing dispute in front of a jury of his peers, not a panel of businessmen?
On Monday an all-too-rare appellate decision allowed that to happen when it sided with an injured Texan in Cardon v. Goldberg.
Why did hospital file a lien against patient’s settlement?
Susan Goldberg received treatment at the Seton Healthcare Services emergency room in Austin for injuries she sustained in an automobile collision. Ms. Goldberg incurred $7,800 in charges which were billed to her health insurer, Blue Cross Blue Shield of Texas. BCBS had the standard reduction contract with the hospital and the bill was reduced to $6,503.
BCBS agreed to pay its share of $4,600 and Ms. Goldberg was billed the remaining $1,903. She forwarded that to her own automobile insurance provider, Nationwide Mutual Insurance Company. So far, so good.
However, instead of just paying that lower amount, Nationwide somehow paid the full $5,000 available under her personal injury protection (PIP) policy.
You might think this situation could be easily corrected. After all, the hospital was paid in excess of the original bill, let alone the adjusted bill as negotiated by BCBS, and could simply refund the difference. Ms. Goldberg never agreed that all $5,000 of her PIP proceeds was to paid to the ER and had other medical bills and lost wages that she presumably wanted to pay with those funds.
But nothing is straightforward in the often Upside Down world of insurance (“Stranger Things” fans will quickly agree).