Medical liens are a risk for healthcare providers to hold. Most doctors and hospitals avoid providing treatment on medical liens and instead opt for immediate payment by treating patients with insurance or who can pay out of pocket.
The problem with this, of course, is that nearly half (46%) of all Americans are uninsured or underinsured and most do not have enough in savings to pay out of pocket for medical treatment.
But, with a medical lien, a healthcare provider could wait years for a case to settle, and, after waiting, the patient could end up not receiving the settlement amount that was initially anticipated. When case values are lower than expected, this can result in healthcare providers having to reduce their medical bills and/or risk those bills going unpaid altogether.
More than that, if a healthcare provider provides treatment to a plaintiff in a personal injury case on a medical lien and then holds that lien within the practice, there is then a vested financial interest in the case settling and ultimately this can be viewed as a major conflict of interest.
One of the primary targets of insurance defense counsels is healthcare providers holding their own medical liens. Some of their common defense mechanisms include:
- Questioning whether healthcare providers who service their own medical liens are acting as investors in litigation.
- Operating a “playbook” designed to trap providers into appearing that there is a conflict of interest, that their medical opinion is biased, and that they are “investors” in these lawsuits.
- Examining communication, including text messages, emails, phone logs and more, between providers and attorneys regarding insurance policy limits, case values, ongoing case updates, settlement influence, negotiations, case involvement, and insurance opt-out requirements.
- Looking for the separation of patient and clinical records and bringing in forensic medical billing experts to search for dual charge masters, varied billing, upcoding, charges that are beyond usual and customary, and more.
In short, in-house medical liens can wind up being a major headache for healthcare providers. Not to mention, medical lien management requires a lot of expertise, manpower and/or specialized software, extensive and proactive follow-up and negotiation.
Which is why, many providers turn to servicing companies to sell their medical liens.
The Benefits to Healthcare Providers of Third-Party Servicing Their Medical Liens
- Outsourcing is more cost efficient
- Outsourcing increases operating efficiencies
- Outsourcing mitigates risk, including:
- Insurance defense attacks
- Discoverability – expensive discovery demands are reduced
- Medical opinion bias
- Financial interest bias
- Billed charges
- Third-party outsourcing solves for many and varied legislative risks
- Healthcare providers make more money
Ultimately, medical liens require time, dedicated expert resources, due diligence and follow-up in order to be managed properly. The benefit of outsourcing medical liens to a third-party servicing company is that they bring all of these to your portfolio of lien receivables, which often results in more liens being collected on.
How Third-Party Servicing Works
Before treating a personal injury patient on a medical lien, it is important to have an understanding of the case value.
In short, when a healthcare provider partners with a servicing company, like Gain Servicing, the medical lien process works like this:
- The healthcare provider determines if medical treatment is necessary and related to the accident.
- The healthcare provider gives the servicing company a breakdown of fees for treatment to be approved.
- The servicing company evaluates the underlying personal injury case to see if the case is viable to enter into a medical lien agreement with the patient and his or her attorney.
- If the servicing company assesses the case and determines it is viable, the healthcare provider is paid for the cost of the treatment after treatment is provided to the personal injury patient.
- The servicing company recoups funds at the conclusion of the personal injury case.
All of the risk associated with treating personal injury patients on medical liens is almost completely reduced by using a third-party servicing company. Not to mention, treating this population of personal injury patients on medical liens can result in a substantial increase in patient flow, especially as attorneys start to refer their clients to the practice for treatment. This, coupled with partnering with a servicing company that is efficient on collecting medical liens, can result in substantial cash flow and revenue for the healthcare provider.