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 those 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. So, a medical lien on a personal injury settlement could lead to a disproportionate return for the healthcare provider.
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 with a medical lien in a personal injury case and then holds that lien within the practice, there is then a vested financial interest in the case settling, which ultimately can be viewed as a major conflict of interest.
The Biggest Issues of Holding Medical Provider Liens In-House
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, as well as extensive and proactive follow-up and negotiation.
The Benefits to Healthcare Providers of Using Third-Party Medical Liens
In order to avoid the headache that comes with managing and servicing medical liens in-house, many providers turn to service companies to sell their medical liens.
Some of the benefits of turning over medical liens to a third-party servicer include:
- Outsourcing is more cost-efficient
- Outsourcing increases operating efficiencies
- Outsourcing mitigates risk, including insurance defense attacks, expensive discovery demands, medical opinion bias, financial interest bias, and billed charges
- Third-party outsourcing solves 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.
How Third-Party Servicing for Medical Liens 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, the process of medical liens 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 placing a medical bill lien on personal injury settlements 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 in collecting medical liens, can result in substantial cash flow and revenue for the healthcare provider.
Are you in need of assistance with managing and servicing your medical liens? Contact us today to see if Gain’s services might be a fit for your healthcare practice.
Our innovative platform is the proven leader in letter of protection (LOP) servicing, collections, and medical lien funding, and we’d love to help give you the support you need to provide quality care for your patients.
