Debt Collections After a Work Injury: What Happens to Medical Bills that Workers Comp Won’t Pay?
Workers Comp Billing and Collections: Filing a Workers Compensation Claim Stops Health Care Providers from Debt Collection Activities for Unpaid Medical Bills Related to the Occupational Injury or Illness
Suffering a work-related injury or an occupational sickness that requires medical treatment or disability from work is bad enough.
Receiving calls from hospitals, doctors, surgeons, medical imaging facilities, and mental health specialists or collections notices about unpaid medical bills the workers comp insurer refuses to pay makes it even worse. These collection notices will increase your stress, which slows your recovery and healing.
If you have unpaid medical bills from a workers compensation case, don’t panic. Depending on where you are in the claims process, you can avoid debt collection activities from these health care providers or the collection agencies contacting you on their behalf. Indeed, you may discover you have a separate cause of action and legal remedy if these debt collection activities persist.
This article explains your options when a medical provider wants to get paid immediately for the treatment rendered when you have a pending work injury claim or an Award Letter providing lifetime medical benefits.
Read on to learn more about dealing with workers comp billing and collections.
Then call us at (804) 251-1620 or (757) 810-5614 to see if we can accept representation in your case.
We help injured employees in Virginia obtain fair workers compensation settlements that improve their financial situations.
Does Workers Compensation Pay for Medical Treatment?
The most important of all available workers compensation benefits is the right to have your employer or insurer pay for all medical treatment related to your work injury.
Indeed, the Virginia Workers Compensation Act (and similar statutes in other states in the U.S.A.) requires your employer to provide a physician and other necessary medical attention, free of charge, for as long as needed after your accident. This covered medical attention includes ambulance services, urgent care visits, hospitalizations, surgery, diagnostic imaging (MRIs, CT scans, X-rays), durable medical equipment, and transportation to and from medical appointments.
Read this article for more information on lifetime medical benefits under workers comp.
Why Do Unpaid Medical Bills Occur in Workers Compensation Cases?
The time it takes to litigate disputes about workers comp coverage and medical treatment denials explains why many unpaid medical bills go to collections.
Although the payment of medical treatment is an available benefit, the insurance company’s legal obligation to pay for treatment starts once the Workers Compensation Commission enters an Award Order. If you do not have an Award, the insurer does not have to pay your medical bills related to the work injury.
If the insurer does not accept your claim immediately, you may have to request a workers compensation hearing. At this hearing, the Commission will decide your eligibility for coverage and benefits.
However, a significant period may pass before the Commission rules on your case. Indeed, it can take months or years, depending on whether the parties appeal the Commission’s decision to the Court of Appeals of Virginia and what that court decides.
Further, having an Award does not guarantee that the insurer will pay all medical bills voluntarily. You may still need the Workers Compensation Commission’s assistance and enforcement powers.
An insurance company can dispute that specific treatment is reasonable, necessary, or related to the covered work injury.
If this happens, you must file a change-in-condition claim, which may require another evidentiary hearing.
The issue is that medicine is a business. Doctors and health care providers want to receive payment for their services quickly.
Therefore, some health care providers may demand that you pay unpaid medical bills even though you have a pending workers comp claim or an Award. If you don’t pay the charges or enter into a payment plan, the health care provider may turn over the unpaid medical bills for your work injury to collections, resulting in frequent phone calls, threatening letters, harm to your credit score, potential lawsuits (warrants in debt), and even bankruptcy.
What Does the Workers Compensation Law Say About Debt Collection Activities? Using Virginia Code Section 65.2-601.1 to Stop Debt Collection Efforts by Health Care Providers for Unpaid Medical Bills Related to Occupational Injuries and Illnesses
Filing a formal claim with the Commission is the first step to protecting yourself from debt collection activities initiated by medical providers.
Indeed, filing a workers compensation claim in Virginia triggers Virginia Code Section 65.2-601.1, which pauses debt collection activities from medical providers. The ability to use this statute is yet another reason you should file a workers comp claim if you are hesitant to do so.
Code Section 65.2-601.1 is entitled “Effect of Filing Claim; Stay of Debt Collection Activities by Health Care Providers.”
Part A of the statute says:
Whenever an employee makes a claim pursuant to Section 65.2-601, all health care providers, as defined in Section 8.01-581.1, shall refrain from all debt collection activities relating to medical treatment received by the employee on connection with such claim until an award is made on the employee’s claim pursuant to Section 65.2-704. The statute of limitations for collection of such debt shall be tolled during the period in which the applicable health care provider is required to refrain from debt collection activities hereunder.
What Does Workers Compensation Consider a Debt Collection Activity?
Receiving periodic billing statements or requests for information about the status of your claim from health care providers may annoy you. However, the law does not consider these requests as debt collection activities.
Instead, Part B of Code Section 65.2-601.1 bans health care providers from all other debt collection activities, such as repeatedly calling or writing to you and threatening to turn the unpaid bill over to a debt collection agency or attorney for collection enforcement.
What Health Care Providers Have to Pause Collections for Unpaid Medical Bills Related to a Workers Compensation Case?
The following health care providers licensed by Virginia must stop debt collection activities related to a pending claim:
- Physicians
- Surgeons
- Hospitals
- Dentists
- Pharmacists
- Registered nurses
- Licensed practical nurses
- Advanced practice registered nurses
- Optometrists
- Podiatrists
- Physician assistants
- Physical therapy assistants
- Clinical psychologists
- Clinical social workers
- Professional counselors
- Licensed marriage and family therapists
- Licensed dental hygienists
- Health maintenance organizations
- Emergency medical care technicians
- Any professional corporation or limited liability company whose shareholders or members are licensed to practice medicine or render health care services
- Nursing homes
As you can see, the debt collection stay statute applies to any health care provider you may see for an occupational injury or illness.
How Long Must Debt Collection Activities for Medical Care for the Work Injury Stop?
All debt collection activities must stop until the Workers Compensation Commission (either the full Commission or one of its deputy commissioners) decides the dispute and enters an award or judicial opinion carrying out the decision.
Therefore, the health care provider may have to wait months or years to collect unpaid medical bills for your occupational injury or work-related disease.
What Should I Do if Health Care Providers or Debt Collection Agencies Pressure Me About Unpaid Medical Bills?
It would be great if health care providers followed the debt collection stay statute without you having to remind them after receiving a bill.
Unfortunately, that doesn’t always happen because the health care practitioner is unaware of the law (or doesn’t care about it) or the status of your workers comp claim.
Therefore, you must proactively ensure these unpaid medical bills do not go into collections and lower your credit score. If you sit back and no nothing, health care providers may take action that harms your credit and impacts your financial future. A reduced credit score affects your ability to rent or buy a home or car.
The best way to deal with unpaid medical bills depends on the procedural status of your workers compensation claim.
Unpaid Medical Bills When Your Initial Claim Remains Pending
Although you tell the medical professional you need treatment for a work-related injury, the administrative staff handling medical billing at the doctor’s office (or hospital, imaging center, etc.) may not flag your treatment as related to a workers compensation case.
Therefore, we recommend that you tell the health care provider’s office in person, by phone, and in writing the following information:
- You have a pending workers compensation claim connected to the treatment received.
- The jurisdiction claim number (JCN) assigned by the Commission.
- Contact information for your employer, your employer’s workers compensation insurance carrier, and the claim administrator assigned to your case. Include the claim adjuster’s name and email address. In addition, give your doctor the claim administrator’s claim number, which differs from the JCN.
- A copy of Virginia Code Section 65.2-601.1, the debt collection stay statute.
In addition, we recommend sending copies of unpaid bills to the claim adjuster or insurance defense attorney assigned to your case and filing a letter with the Commission asking it to address these unpaid medical bills at trial. You should also obtain and file the underlying medical records that accompany the bills to show how the treatment relates to your work injury.
Unpaid Medical Bills When You Have an Award
The Workers Compensation Commission has exclusive jurisdiction over all disputes concerning unpaid medical charges and may order the payment of the bill.
If you have received a lifetime award of medical benefits for your work injury but health providers are sending you bills, we recommend you do the following:
1. Send a copy of the medical bills to the claims adjuster and ask for payment. Also, send a courtesy copy of your letter to the Commission and the health care provider seeking payment. The adjuster may not have received the bill yet or may have it in line for processing and need to check on it.
2. If you still need to, send a debt collection stay letter to the health care provider or debt collection agency seeking payment.
3. In that letter, remind the health care provider or debt collection agency that workers comp cannot be garnished in Virginia.
4. File a claim with the Commission seeking the payment of the outstanding medical bills. Attach copies of the medical reports to the claim letter. In addition, consider using pretrial discovery to discover why the insurer refuses to pay these bills. Further, you may ask your treating physician for a letter explaining the causation between the work accident and the treatment generating the bills. This report will increase the likelihood that you will win at trial.
Unpaid Medical Bills After a Workers Compensation Settlement
You have probably heard the phrase “hindsight is 20/20,” meaning we see things more clearly after they happen than before.
This phrase applies to settling your workers compensation when you have unpaid medical bills. The best time to deal with these bills is before you close out your case, not after. For example, the health care provider may agree to accept a portion of the settlement in satisfaction of the outstanding charges, saving you thousands.
But now it’s too late because the Commission approved your settlement. And health care providers or debt collection agencies keep sending you bills.
In this situation, reread your settlement papers.
Many settlements, especially those where the injured worker had an Award, say the employer remains responsible for paying medical bills related to treatment provided through the date the Commission approved the settlement.
If so, you can file a claim asking the Commission to enforce the settlement terms and order the employer to pay the outstanding bills.
Further, you may have a valid defense to paying the medical bills if you include specific anti-subrogation language and had private health insurance or other medical benefits coverage when you were injured.
Use Code Section 65.2-714(D) if the Medical Provider Tries to Balance Bill You for Treatment Related to the Occupational Injury or Illness
Many workers comp insurers (Travelers, Liberty Mutual, The Hartford, etc.) and claim administrators (such as Sedgwick, ESIS, Corvel, Gallagher Bassett, etc.) pay less than the amount charged by the health care provider due to contracts or medical fee schedules used by workers compensation boards.
When this happens, some health care providers may balance bill, a practice where the provider bills you for the difference between the amount charged and the amount that workers comp insurance paid.
Virginia Code Section 65.2-714(D) prohibits balance billing in workers compensation claims. This statute says:
No physician, hospital, or other health care provider as defined in § 8.01-581.1 shall balance bill an employee in connection with any medical treatment, services, appliances, or supplies furnished to the employee in connection with an injury for which (i) a claim has been filed with the Commission pursuant to § 65.2-601, (ii) payment has been made to the health care provider pursuant to § 65.2-605.1, or (iii) an award of compensation is made pursuant to § 65.2-704. For the purpose of this subsection, a health care provider “balance bills” whenever (a) an employer or the employer’s insurance carrier declines to pay all of the health care provider’s charge or fee and (b) the health care provider seeks payment of the balance from the employee. Nothing in this section shall prohibit a health care provider from using the practices permitted in § 65.2-601.1.
Contact an attorney if the health care provider accepts partial payment from the insurer and sends you a bill for the remaining amount. You may have a consumer protection cause of action under federal or state law or an argument for sanctions under the Workers Compensation Act.
Use the Fair Debt Collection Practices Act if the Health Care Provider or Debt Collection Agency Refuse to Comply with Code Section 65.2-601.1
You may have an additional legal claim if the health care provider ignores your letter or mistakenly refers your unpaid bills to a debt collection agency.
Specifically, you can file a lawsuit under the Fair Debt Collection Practices Act (“FDCPA”), a federal law protecting consumers.
The FDCPA prohibits debt collectors from using any “false, deceptive, or misleading representation or means” in collecting a debt. This prohibition includes “misrepresenting the legal status of the alleged debt.”
The FDCPA is a strict liability statute, which means collectors are liable for unintentional or unknowing violations.
A debt collection letter requesting payment of a medical bill while your workers compensation claim remains pending misleads because you do not owe payment under Code Section 65.2-601.1.
Therefore, you should consider filing a civil action under the FDCPA after speaking with a consumer protection attorney.
How Can I Resolve Unpaid Medical Bills When Workers Compensation Denied My Claim or the Settlement Doesn’t Say the Insurer Must Pay Them?
You may be responsible for unpaid medical bills if the Workers Compensation Commission denies your claim for benefits and you do not appeal that decision or the Court of Appeals affirms the denial.
Further, the medical charges remain your responsibility if you settle the case on a denied basis, with the employer and insurer not having to pay any treatment expenses.
But you still have options to resolve outstanding medical charges.
First, you can try to negotiate a settlement that includes the payment of outstanding medical bills even though the Commission has denied your case. This strategy works better if you negotiate after the Deputy Commissioner’s decision but before the Full Commission or the Court of Appeals rejects your claim.
Second, if you have such insurance, you can present the denial order (including settlement orders) to the health care provider and your private health insurer or government coverage (Medicare, Medicaid, Tricare, etc.).
A workers compensation denial triggers the anti-subrogation statute in the Virginia Code.
This statute says that health insurance cannot exclude payment for medical bills related to a work injury if the Commission entered an order denying your claim.
Third, you or your attorney may be able to negotiate a bill reduction.
If you have been out of work, you don’t have enough money to pay the medical bills. If so, you can argue that the provider is better off accepting pennies on the dollar for unpaid bills than obtaining a court judgment on a debt it will never collect. Indeed, you can take advantage of the fact that continued medical collection threats may push you into bankruptcy, where the healthcare provider will recover little money, if any.
This strategy usually works. For example, we have often persuaded health care providers to accept 10 to 30 percent of charges, putting more money in our clients’ pockets.
Get Help with Unpaid Medical Bills Related to Your Work Injury
You have enough to deal with after a work-related injury. Don’t add to the stress of your physical and mental recovery by trying to take care of unpaid medical bill issues and fight health care providers and debt collection activities on your own.
Call us today for a free consultation: 804-251-1620 or 757-810-5614.
Our law firm has helped hundreds of injured workers in Richmond, Newport News, Virginia Beach, Roanoke, Harrisonburg, Manassas, Fairfax, and elsewhere in the Commonwealth through the workers compensation process.
And we want to help you and your family during this difficult time.
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