Gerald J. Bamberger, Attorney at Law

This year a group headed by St. John's Mercy Medical Center and St. Anthony's Medical Center funded the hiring of a professional lobbyist to assist in persuading the Missouri Legislature to amend certain statutes which would rectify some of the problems in collecting outstanding accounts for hospital and medical services due healthcare providers from recoveries by patients in personal injury and worker's compensation claims.

On January 27, 2005, Representative Tom Dempsey of St. Charles, the Majority Floor Leader, introduced House Bill 355 which proposed the filing of medical-fee disputes by healthcare providers in all contested worker's compensation cases, the filing of liens upon wrongful death claims and eliminate the forced settlement upon healthcare providers who file liens for a pro rata portion of the patient's recovery.

Currently, healthcare providers can only file medical-fee disputes requesting payment for their outstanding charges in worker's compensation cases where the services were authorized by the employer or insurer or where there is a disagreement between the provider and the insurer over the reasonable value of the services.  The latter situation is rare and poses no problem but the first situation is frequent.  As healthcare providers are statutorily prohibited from billing and collecting from a worker's compensation claimant during the pendency of the claim and since worker's compensation claims can take years to resolve and there is no guaranty that the claimant or his or her attorney will make payment to the healthcare provider after settlement or award of the claim, many services to worker's compensation claimants go unpaid.  But House Bill 355 would have permitted healthcare providers to file medical-fee disputes or claims in all unpaid cases and would require the Administrative Law Judge to order direct payment to the healthcare provider of the reasonable value of its charges out of any award or settlement to the claimant.

Ever since the Supreme Court of Missouri, in the case of American Family Mutual Insurance Company vs. Ward, 774 S.W.2d 135, Mo. Banc 1989, held that hospital liens only applied to claims of the insured person and not to recoveries by the decedent's heirs in statutory wrongful death actions or spouse in a consortium claim, payment to the healthcare provider for services rendered to the patient prior to his or her death was not provided for.  House Bill 355 would have authorized such liens and enabled health care providers to be paid for their services out of the recovery.

In 1999, the Missouri General Assembly enacted Section 430.225 RSMo. which provided that lien claimants must accept in full payment of their charges a pro rata amount with other lien claimants of 50 percent of the net recovery of the claimant after payment of attorney's fees and expenses.  This share customarily comes to 30 to 35 percent of the recovery.  With the increase in medical charges and many automobile liability policies being for limited amounts between $25,000.00 and $50,000.00, the amount required to be accepted in full by lien claimants in many instances is minimal.  Though this statute was declared unconstitutional in February, 2002 by the Supreme Court of Missouri in the case of SSM Cardinal Glennon Children's Hospital vs. State of Missouri, 68 S.W.3d 412, Mo. Banc 2002 for improper titling, it was reintroduced in the 2003 Session of the General Assembly and properly enacted into law.  House Bill 355, though retaining the limited amount to be paid to a lien claimant out of the personal injury recovery, would permit the healthcare provider to pursue payment from the patient or responsible party for the balance of its charges.  The net effect of this would be to enable the healthcare provider or its attorney to negotiate a larger payment for its services out of the personal injury recovery.

Though House Bill 355 was reported out of the House Judiciary Committee Ado pass@, it was never passed by the full House and died.  Hopefully, a similar bill will be enacted into law at next year's Legislative Session.

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Healthcare Costs Spur Calls for Limits on Profits  (From the LA Times)

State officials target insurers' use of funds as the debate turns from services to finances.

Rising medical costs are sparking efforts to cap profits of California's health insurers in the same way that surging gasoline prices are fueling proposals for a windfall oil profit tax.
   
Two bills in Sacramento seek to limit insurers' profits as well as cap consumers' out-of-pocket payments for medical treatment. The state Department of Insurance has a separate plan to limit profits.
  
Such proposals, if enacted, could result in the nation's most sweeping financial reform of for-profit health plans. Other states, including Connecticut and New York, regulate how much health plans can charge in premiums, and Minnesota allows health maintenance organizations to be run only by nonprofit groups.
 
The California proposals may not survive industry and political opposition. Health insurers such as Blue Cross of California say these moves would kill innovation and limit the types of insurance California residents can buy. Some experts say profits are not a major factor in rising health costs.
 
But the proposals underscore a growing backlash against the health insurance industry from consumer advocates and lawmakers who say insurers must absorb a greater share of rising costs. The issue also is renewing calls for a government-sponsored healthcare system.

"Too much of the premium dollar is going to [profits and administrative costs] where it doesn't help us provide essential care," said Jack Lewin, chief executive of the California Medical Assn., a doctors' group.
  
The CMA has sponsored a bill that would limit administrative costs, including profits, to 15% of health insurance premiums. Current law sets a 15% limit on overhead, but it does not include profit. The bill, SB 1591, passed the state Senate on May 25 and is awaiting a vote in the Assembly.
 
Another bill, AB 2281, proposes to cap out-of-pocket expenses to $5,250 for individuals and $10,500 for families. It was narrowly defeated late Wednesday, getting 38 votes, three short of the majority. Seven Assembly members failed to vote and 35 opposed it.
   

Much of the sentiment against the health plans is intensified by perceived excesses within the companies themselves. Minnetonka, Minn.-based UnitedHealth Group Inc., the nation's second-largest insurer and parent company of Cypress-based PacifiCare, is embroiled in a stock options probe involving Chairman and Chief Executive William McGuire. He recently held $1.6 billion in unexercised options.
 
Indianapolis-based WellPoint Inc., which owns California's Blue Cross operations, is being sued by former members who say the company canceled their insurance after they became ill and ran up high medical bills. The company has posted record profits since it was formed from the acquisition of Woodland Hills-based WellPoint by Anthem Inc. in 2004. Last quarter, it made $731.8 million, up 20% from a year earlier.