Expert: Regan Shinski - 2/17/2010

Question
The claim submission in 2008 for anesthesia services related to a colonoscopy procedure was denied by my insurance company because the anesthesiologist was not a participating provider.  Fortunately, I got a commitment from my insurance company when I decided to have the colonoscopy done that anesthesia was going to be paid. When I received the notice of denial, I called up my insurance company and reminded them about their commitment.  I was then assured that an adjustment would be made with the thought that payment would be made directly to the provider at a contracted amount which runs between 18% to 20% of the claim.  A couple of months later, I received an unusual check for the full amount of the claim which was $2,100.  Being that the check was payable to me, and not receiving a bill, I cashed it.
About three months later, I received a letter from a professional management company asking me for the $2,100.  Since I had since retired, living off social security with little money to pay, I asked for a reduced billing which was rejected.  I was told that what I was doing was illegal.  I therefore started making installment payments but stopped after a few months because of financial difficulties. I had made payments totalling $612.
I underwent another colonoscopy procedure with another doctor in 2009 because the one that was done in 2008 was only half successful.  In addition to colonoscopy, endoscopy was also done.  For these 2 procedures, claim submission by the anesthesiologist was only $1,600 and paid by the insurance for $294.
I recently received a letter from the management company for the 2008 service insisting for the full amount with the threat of taking legal action plus payment of attorney's fees and interest.
I have called at least 5 gastro-enterologist offices to verify how much is the normal charge for anesthesia service on a colonoscopy procedure is, and the amount ranged from $100 to $350.
I believe that my insurance company made an error in paying the full amount of $2,100 and the management company wants to take advantage of the situation but I do not think that the anesthesiologist should benefit from it. When the insurer sent me the check, there was an indication stating that the doctor was not a participating provider and that I was responsible to pay the service.  I now believe that the $612 payment that I made was more than enough to pay for the service considering that the highest normal charge is only $350.
Do you think a legal action by them will hold? What can I expect to happen? Shall I wait for a notice that a lawsuit was filed?  I have not responded to their letter as I need advice on how I should respond to them.  Please advise me as to the right course of action to take. I anxiously look forward to your response.  Thank you.

Answer
Hi Rose:

I want to preface my comments with an additional disclaimer that this appears to be a very complicated situation and this is a difficult forum to handle all the nuances of your case.

I believe you have two choices:  wait it out and react as needed or fight it aggressively.

Waiting it out is self-explanatory.  You wait for them to file a lawsuit, then you act as a defendant, try and settle at that point, or just let it go.  If you are only on social security, those wages are protected from garnishment IF you keep them in an account that ONLY handles SS money.  So there may not be a lot of options for them to COLLECT it, even if they get a judgement.

Fighting it is definitely an option and you are on the right track.  You send the information you have - the cost other medical providers charge, letter saying they will charge reduced amount, letter stating insurance company will pay, etc to the management company, original creditor and any collection agency trying to collect it.  Threaten legal action.  File a claim with the Better Business Bureau, insurance commission, attorney general, and anyone else you can think of.  Tell them you only live on SS and that money cannot be garnished anyway, so there is no benefit for them to sue you.  The goal is to be as much of a pest that they drop it - a common scenario.

I also think you have another option to at least delay action.  You have a letter from the insurance company stating they will pay it.  Well, have they?  I know YOU received a check but I would send a letter demanding that the management company takes it up with the insurance company.  

Obviously anything you do is risky since it's pretty clear you received the $2100.  If they dot their i's and cross their t's, you are going to be on the hook.  Thankfully most creditors cannot do that for a fairly small amount to them.

Good luck,
Regan