Do you have enough benefits in your health plan to cover your hospitalization?

10 years ago | Doctors

By The SAC Litigation Team

When you seek treatment at a doctor’s office or hospital, you will typically be asked for your health insurance information. If you have a health plan, the doctor or hospital will contact your health plan to verify whether you are a member and to verify your benefits. Often, the information received from the plan can mislead the verifier into thinking that you have more benefits than are actually available.

For example, the health plan tells the verifier that you have a $2 million benefit limit, a $5,000 deductible and $10,000 in out-of-pocket liability. At first glance, it would appear that you have $2 million in benefits, which would be sufficient for most hospitalizations. However, that $2 million sum may be your maximum for life, which may be much less now due to your prior hospitalizations and treatments.

To further complicate matters, some health plans have annual and transplant benefit limits, among others, which are often less than the lifetime benefit maximum. For instance, you may have $2 million in lifetime benefits, but only $1 million in annual benefits. Thus, even though you have $2 million in lifetime benefits, the plan’s obligation to you is limited to $1 million per year.

Unfortunately, attorneys see too many cases where a verifier understands a $2 million lifetime benefit maximum – which is factually correct – to mean that the patient has $2 million in benefits available to cover a hospitalization. These verifiers may not realize that prior hospitalizations and treatments can drastically reduce the lifetime benefits, leaving perhaps only $50,000 in remaining benefits. That reduced sum may not be sufficient to cover the current hospitalization, and once the patient’s lifetime benefits have been used up, the balance of the hospital bill, which may be significant, will likely be the patient’s responsibility.

Of course, the same type of scenario could occur with other types of health plan benefits, including annual and transplant benefits. For example, the verifier may be told that you have an annual benefit maximum of $1 million, which is factually correct. However, you may have already used up $950,000 in annual benefits, leaving only $50,000 in benefits available for the current hospitalization. Unfortunately, if the verifier doesn’t ask the right questions, the health plan does not usually offer up information regarding the amount of benefits that remain available to you, and you could be liable for more than you originally thought.

So what can you do?

To ensure that you have enough benefits to cover your hospitalization, it is important for any verifier to ask the right questions and get the full benefit story from your health plan. Ask the verifier to obtain from the health plan all benefit maximums under your health plan – lifetime, annual, transplant and any others. In addition, and perhaps more importantly, the verifier needs to find out the amount of the remaining benefits in each specific category (lifetime, annual, transplant and any others). It may be that you have very little lifetime, annual or transplant benefits remaining, and if you know that ahead of time, you can make other payment arrangements to help cover the cost of your hospitalization and not be shocked by a huge bill after being discharged.

Be proactive. Enjoy Your Healthy Life!

The SAC Litigation Team includes California's leading attorneys with vast experience in health care litigation and provider reimbursement from the Law Offices of Stephenson Acquisto & Colman.