Hospital Billing and Collection Practices

In Keating, Claimant was injured in a workplace accident on July 22, 2017. Employer was found liable for the injury and subsequent workers’ compensation benefits in October 2018. However, Employer did not carry workers’ compensation insurance and failed to pay any temporary benefits or medical benefits owed to Claimant. Employer then filed a bankruptcy proceedings. Claimant began treatment at a hospital in October 2017. After sending Claimant bills for her care, Claimant’s counsel alerted the hospital of C.R.S. 8-42-101(4). C.R.S. 8-42-101(4) provides that once an employer is found liable for a Claimant’s medical costs, a medical provider “shall under no circumstances seek to recover such costs or fees from the employee.”  The hospital explained that it was unable to collect its charges from either Employer or the Division of Workers’ Compensation; therefore, Hospital expressed that its only recourse was to collect fees from Claimant. As a result, Claimant submitted an application for hearing to seek penalties against the hospital for violation of C.R.S. 8-42-101(4). The Administrative Law Judge (“ALJ”) found that the hospital had violated this billing prohibition and assessed penalties for 119 days, at a rate of $750 per day, for a total of $89,250. The hospital appealed the ALJ’s order.

The hospital asserted that the ALJ did not have personal jurisdiction over the hospital, claiming it was not formally joined as a party. However, the Industrial Claim Appeals Office (“the Panel”) found that the ALJ had the authority to join the hospital as a party to a hearing, although it was not otherwise a party to the claim. The Panel further explained that personal jurisdiction would be available to the ALJ over the hospital so long as the hospital was given “fair and adequate notice of the proceedings.”  Here, the Panel found that the hospital was given proper notice under Colorado Rules of Civil Procedure (“C.R.C.P.”) 4, and therefore, it could be properly joined under C.R.C.P. 19 and 20.

However, the Panel found that the manner in which penalties were assessed by the ALJ was incorrect. The Panel found that the following actions merited separate $750 penalties: 1) each attempt at collections and 2) each day a bill was sent to Claimant by the hospital. The Panel ordered that ALJ’s decision be corrected to apply a daily penalty of $750 to eight days, instead of the original 119 days.

Keating v. Adams, W.C. No. 5-065-586 (I.C.A.O. Aug. 21, 2020)

Want to know more? Contact Brianna Tancher at btancher@pollartmiller.com or 877-259-5693.

October 2020 Newsletter

2020-11-05T16:03:04+00:00