A Kid, A Minor Bike Accident And A $19,000 Medical Bill

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Adam Woodrum and his son, Robert, get ready for a bike ride near their home in Carson City, Nevada, this month. During the summer, Robert had a bike accident which resulted in a hefty bill from the family’s insurer.

Maggie Starbard for KHN

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Maggie Starbard for KHN

Could another policy — say, auto or home coverage or workers’ compensation — be obligated to pay if someone was at fault for the accident?

Subrogation is an area of law that allows an insurer to recoup expenses should a third party be found responsible for the injury or damage in question.

Health insurers say subrogation helps hold down premiums by reimbursing them for their medical costs.

About two weeks after the accident, Robert’s parents — both lawyers — got the letter informing them of the insurer’s decision.

The note also directed questions to Luper Neidenthal & Logan, a law firm in Columbus, Ohio, that specializes in helping insurers recover medical costs from «third parties,» meaning people found at fault for causing injuries.

The firm’s website boasts that «we collect over 98% of recoverable dollars for the State of Nevada.»

Another letter also dated Aug. 4 soon arrived from HealthScope Benefits, a large administrative firm that processes claims for health plans.

The claim, it said, included billing codes for care «commonly used to treat injuries» related to vehicle crashes, slip-and-fall accidents or workplace hazards. Underlined for emphasis, one sentence warned that the denied claim would not be reconsidered until an enclosed accident questionnaire was filled out.

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Robert’s bike crash led to an $18,933.44 hospital bill for stitches and anesthesia.

Maggie Starbard for KHN

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Maggie Starbard for KHN

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The Nevada health plan’s documents say state legislation allows the program to recover «any and all payments made by the Plan» for the injury «from the other person or from any judgment, verdict or settlement obtained by the participant in relation to the injury.»

Attorney Matthew Anderson at the law firm that handles subrogation for the Nevada health plan says he can’t speak on behalf of the state of Nevada, nor can he comment directly on Woodrum’s situation. However, he says his insurance industry clients use subrogation to recoup payments from other insurers «as a cost-saving measure,» because «they don’t want to pass on high premiums to members.»

Despite consumers’ unfamiliarity with the term, subrogation is common in the health insurance industry, says Leslie Wiernik, CEO of the National Association of Subrogation Professionals, the industry’s trade association.

«Let’s say a young person falls off a bike,» she says, «but the insurer was thinking, ‘Did someone run him off the road, or did he hit a pothole the city didn’t fill?'»

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The bill from the insurance company led to subrogation, a process of determining which type of insurance is primarily responsible.

Maggie Starbard for KHN

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Maggie Starbard for KHN

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Woodrum received an accident questionnaire from his insurer which he filled out and sent back to provide clarity on what had happened during the accident.

Maggie Starbard for KHN

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Maggie Starbard for KHN

Woodrum received an accident questionnaire from his insurer which he filled out and sent back to provide clarity on what had happened during the accident.

Maggie Starbard for KHN

If you get an accident questionnaire, «fill it out, be honest about what happened,» says Sean Domnick, secretary of the American Association for Justice, an organization of plaintiffs lawyers. Inform your insurer and all other parties of the actual circumstances of the injury.

And do so promptly.

That’s because the clock starts ticking the day the medical care is provided and policyholders may face a statutory or contractual requirement that medical bills be submitted within a specific time frame, which can vary.

«Do not ignore it,» says Domnick. «Time and delay can be your enemy.»

Dan Weissmann, host of the podcast «An Arm and a Leg,» reported the radio interview of this story. Bill of the Month is a crowdsourced investigation by KHN and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it!

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