Maak v. IHC Health Services

REIMBURSEMENT/INSURANCE

Maak v. IHC Health Services, Inc., No. 20060124-CA (Utah Ct. App. July 12, 2007)

The Utah Court of Appeals held that a hospital could not bill a patient for medical services after it had collected the full amount chargeable for those services from the patient’s insurer. The patient received emergency medical care at the hospital. Her insurance company later reimbursed the hospital in excess of what the hospital actually charged for the services pursuant to the contract it had with the insurer, which classified all medical services provided at the hospital into Diagnostic Related Groups (DRGs). Under the contract, the insurance company reimbursed the hospital based upon the DRG at a predetermined fixed rate, without regard to the actual costs the hospital incurred for the particular service. Although it received payment from the insurance company in excess of the costs of the services rendered, the hospital then billed the patient for her coinsurance obligation under her insurance plan. The court determined that the contract between the patient and hospital, signed by the patient at the time of admission, was ambiguous and could not provide the basis for the hospital to collect coinsurance from the patient in excess of the actual costs of the health services rendered. The court also held that, even though the contract between the patient and her insurance company required the patient to pay her coinsurance amount notwithstanding the possibility that the insurance company has fully reimbursed the hospital for services rendered, it did not purport to authorize a health provider or anyone other than the insurance company to enforce payment of the coinsurance.