Unlike with auto No-Fault, health insurance companies could take away a car crash victim’s right to see the doctor of her choice and claw back pain and suffering compensation through liens
On Wednesday, I explained why auto No-Fault insurance was better than health insurance for car crash victims.
In particular, I wrote about how some health insurance companies’ policies with “auto accident exclusions” could leave car accident victims with no health insurance coverage at all for their medical bills.
Plus, I explained how many health insurance companies’ plans — even ones that don’t have auto exclusions — very likely wouldn’t provide the same unlimited coverage for necessary medical care, or cover the same scope of services and accommodations that No-Fault does.
But that’s not all the ways that health insurance plans fall short.
Here’s two of the most pernicious ways that the politicians who are pushing for health insurance as a good substitute for auto No-Fault “reform” in Michigan are jeopardizing their constituents.
Specifically, I’m going to discuss how:
- Managed care plans (or HMOs) could deny victims their “right” to choose their own doctor and could require the victim to obtain the insurer’s “pre-authorization” for medical services and prescriptions.
- Self-funded ERISA health plans would allow a health insurer to take money from a victim’s pain and suffering settlement as reimbursement for what the insurer paid for the victim’s accident-related medical care.
These are unpleasant and highly undesirable scenarios, but they reflect the reality that car crash victims will face if No-Fault “reform” plans — such as House Bill 4488’s PIP Choice proposal — become law.
What’s the prognosis for car crash victims when health insurance companies ‘play doctor’?
Poor. Very poor.
That’s because people — in this case, car accident victims — with a managed-care health-insurance plan, such as an HMO, can’t see the doctors they want to see.
Instead, they’re forced to see one of the doctors in the health insurer’s “limited provider network” managed care plan, many of whom are — based on my experience as an auto accident attorney — extremely conservative health insurance companies’ IME doctors. This, along with a horrible and ridiculous $25,000 cap on medical care and treatment outside of the emergency room, is why I’ve called Duggan’s D-Insurance plan a disaster for Detroiters.
Plus, depending on the plan, health insurers may have the power to “play doctor” with automobile accident victims by requiring “pre-authorization” from the insurance company before the victims may seek recommended medical services and/or before they may fill needed prescriptions.
Notably, neither of these absurdities exists for car crash victims under Michigan’s existing auto No-Fault insurance law.
Could self-funded ERISA health plans take away injury compensation from innocent car crash victims?
You bet. They can and they do. Every single day.
That’s because the administrators of a self-funded ERISA health plan can do something that No-Fault insurers can only dream of:
Take money out of a car accident victim’s pain and suffering settlement to reimburse itself for what it spent on the victim’s medical care and treatment.
If a motor vehicle accident victim gets her accident-related medical expenses paid through her employer’s self-funded ERISA health insurance plan, then the ERISA health provider can claim a lien against the victim’s third-party tort recovery to get reimbursed for the money it spent on medical bills.
The “lien” scenario that exists with self-funded ERISA is bad for car accident victims for two important reasons:
- It can reduce — or possibly eliminate — a victim’s pain and suffering compensation (also known as “noneconomic loss” damages).
- It also jeopardizes the victim’s ability to secure legal representation because, with the possibility of an ERISA lien depleting any pain and suffering recovery, attorneys may be reluctant to get involved for fear they won’t be paid for their services.