Out on a leisurely Fourth of July motorcycle ride in rural Minnesota almost four years ago, Marlyn Bootsma put on his turn signal and slowed to pull into a cemetery. That’s when he was hit from behind.
The impact threw both him and his wife, Kathlene Bootsma, off of their motorcycle. The motorcyclist that hit them ran Marlyn over, crushing his shoulder.
The Woodstock, Minn., couple was airlifted to Avera McKennan Hospital & University Health Center in Sioux Falls, S.D., where they would spend the next several days.
The couple’s family made sure to let staff know about their health insurance coverage under Blue Cross and Blue Shield of Minnesota. But instead of billing the insurer, the hospital placed liens—essentially claims—for its full charges of $142,000 to collect on a judgment against the other driver.
The Bootsmas, self-employed farmers, spend up to $20,000 per year on health insurance, said Jim Malters, the Worthington, Minn., attorney representing the couple in their ongoing court battle against Avera. But now, at a time they needed it most, it wasn’t getting used.
“The hospital in this case figured they would get an additional bonus if they went against my clients and got paid 100%” of charges, Malters said. Avera officials declined to comment on the ongoing case.
When people buy health insurance, they expect it to cover them in catastrophic situations like car accidents. But hospitals often don’t bill patients’ health insurance in those cases, and instead place liens to try to collect higher amounts from auto insurers. It’s easy to see why: It’s one of the only scenarios where they can attempt to collect their full, chargemaster rates rather than settle for insurer-contracted payments that represent a fraction of those prices.
Those inflated charges come from a payout that would otherwise go in part to the injured patient, who likely needs the money for ongoing medical care, missed work or a new vehicle. Hospital chargemaster prices average more than three times Medicare allowable costs—or up to 10 times at the most expensive hospitals, according to a 2015 Health Affairs study.
“The hospitals won’t take what they’ve already agreed upon and instead are, in our opinion, being greedy and trying to take more than they have contractually obligated themselves to accept,” said Larry Centola, a New Orleans attorney who represents patients in such cases. “It’s just not right.”