Minnesota is a “no-fault” auto insurance state, providing that auto insurance policies include first-dollar medical coverage, up to $20,000, for an individual injured in a motor vehicle accident. No-fault auto coverage serves as critical reimbursement for auto-related EMS response and trauma care services. Alerted by billers of a new trend in which law firms were interfering in the reimbursement of medical claims, Minnesota Chapter ACEP (MNACEP) worked to pass an amendment in the final hours of the legislative session to fix the emerging issue. A growing number of law firms, encouraged by seminars advising on the practice, had begun to issue liens and notices of representation to auto insurance carriers in order to intercept the medical claim reimbursement to the provider for treatment provided to an accident victim. This was done prior to any legitimate arbitration decision or denial.
Most often, EMS and trauma providers would learn of the interception of the payment upon receipt of an explanation of benefits (EOB) from the insurance company showing the claim as paid. However, rather than reimburse the provider for services rendered, the insurer redirected payment to the lawyer due to a notice to the insurer of a lien or certificate of representation. The law firm might make reduced payments to providers out of the $20,000 benefit or, in some cases, suggest providers treat the bill as charity care or bill the claim to the injured patient’s health insurance, despite an EOB clearly showing payment of the medical claim.
Approached about the issue, the trial attorneys’ association, Minnesota Association for Justice, and insurance industry representatives denounced the practice and joined MNACEP in the pursuit of a legislative solution. The bill, signed by Governor Dayton on May 21, 2014, clearly states that firms are prohibited from placing liens on no-fault awards to providers if an insurer had not denied the no fault claim. This represents preserving millions of dollars in first-dollar coverage for the health care provider and EMS community.
Ms. Augustin is the Minnesota ACEP executive director.