Kansas City Medical Center to Stop Rejecting Health Insurance for Crash Injuries

September 23, 2014

Truman Medical Center in Kansas City has agreed to stop rejecting health insurance for some patients injured in auto accidents in order to collect more money from other sources, according to court records.

The agreement, which still must be approved by a Jackson County judge, is in response to a lawsuit filed over a billing practice that affected more than 180 patients. Patients will either be partially reimbursed or will no longer have to make payments on their bills, the Kansas City Star reported.

Truman Medical Center was accused in the lawsuit of avoiding deep discounts required by health insurers by rejecting patients’ health insurance and seeking reimbursement from other sources, often by putting a lien on settlements patients receive from auto insurance and occasionally directly billing the patients.

The proposed settlement is valued at $478,000 — $178,000 in initial cash value, and the hospital would lose the rest of money by no longer refusing health insurance. In the agreement, the hospital said it will submit claims to a patient’s health insurer and would not file liens to collect from auto insurance settlements.

“Yes, we have reached a settlement and we’re happy with it,” said Shane Kovac, a spokesman for Truman Medical Center.

“We think it’s a very good settlement,” said Ralph Phalen, one of the attorneys that filed the lawsuit seeking class-action status.

The settlement comes more than four months after St. Luke’s Hospital settled a similar lawsuit that alleged it didn’t accept health insurance from roughly 1,000 patients. It agreed to stop the practice and offered financial relief valued at $3.5 million for all of St. Luke’s hospitals in Missouri.

Similar lawsuits are pending against Liberty Hospital and Research Medical Center in the Kansas City area and SSM DePaul in St. Louis.

The Missouri Court of Appeals last year ruled that if hospitals were required to submit the health insurance claim, they should do so and accept the discounts.

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