The federal No Surprises Act, which took effect Jan. 1, 2023, forces health insurance companies to clearly tell customers whether a provider is in-network or out-of-network.
In New York State, a similar law has been in effect since 2015. Figuring out how the state and federal regulations will work together to protect consumers was the topic of a panel discussion Tuesday at the New York State Bar Association’s Annual Meeting.
Before the federal law went into effect, “New York had extensive existing protections,” remarked Counsel to the New York Health Plan Association, which represents managed care plans and prepaid health service plans. “In many ways, our law in New York was a model for some of the federal provisions.”
Nevertheless, in some ways, the federal law is broader. For example, New York law contains no protections related to air ambulances, but federal law does. And, state law only covered surprise bills from doctors and hospitals. Since the federal law provides more consumer protections, it applies in those cases.
Health Insurance and Medical Bills
Surprise healthcare bills (hidden fees) take on a new meaning when victims are injured in accidents. Usually, health insurance companies refuse to pay injury-related expenses at the outset. Even worse, when the insurance company finds out an expense was injury-related, they often demand reimbursement from the policyholder.
The average hospital stay costs over $3,000 a day. Many victims require days or weeks of hospital care. If the doctor must perform surgery, and many victims require multiple surgeries, costs could be ten or twenty times higher.
Furthermore, after their discharges, victims must still pay for physical therapy, costly prescription drugs, follow-up care, and expensive medical devices. These secondary costs often exceed the primary costs.
Injured victims who are unable to work are in no position to pay these bills. They have enough trouble paying the deductible in the unlikely event their health insurance company authorizes payment.
Victims must eventually pay injury-related medical bills. Frequently, the final bills are lower, thanks to New York’s complex collateral source rule. Most people would agree that victims shouldn’t be able to double dip. If an insurance company or other collateral source pays a bill, the victim shouldn’t be able to pocket that money. At the same time, tortfeasors (negligent actors) shouldn’t receive financial windfalls because a victim was responsible enough to buy insurance.
In the Empire State, judges may reduce damage awards if there is evidence that a collateral source may pay a bill. If Steve’s medical bills are $100,000 and his insurance company pays $80,000, he is entitled to $20,000 compensation for the remaining bills. However, the collateral source rule doesn’t apply to attorney-negotiated reductions. If Steve’s New York personal injury attorney convinces the hospital to reduce Steve’s $100k bill to $80k, Steve might get to keep the remaining $20k.
The collateral source rule usually doesn’t affect noneconomic damage multiplications. To determine the loss for emotional distress and other intangible damages, most New York personal injury attorneys multiply the economic losses, whether a collateral source paid them or not, by two, three, or four, depending on the facts of the case and a few other considerations.
Out-of-court settlements, as opposed to trials, usually resolve these and other legal issues. Professional mediators, who ensure that both parties negotiate in good faith, often help parties reach agreements when no agreement seems possible.
Injury victims are entitled to substantial compensation. For a free consultation with an experienced personal injury attorney in New York, contact Napoli Shkolnik, PLLC. You may have a limited amount of time to act.