Hospitals Go After Accident Victims’ Settlement Money

PHOENIX –The motorcyclists who survived a deadly collision in March 2010 aren’t feeling so lucky two and a half years later. Not only have their lives been put on hold thanks to countless surgeries, they say they’re getting hit financially by the people who treated them.

Susan Nachand-Prestidge has become close with many of the victims since the accident. Unfortunately, she’s learned something, none of them can disclose.

“I really don’t have a doubt that when this hits the air, that people all over the place are going to say, ‘Wait a minute, no, no, this is not right,'” she said.

Nachand-Prestidge lost her father, Clyde, in that accident. He was one of four motorcyclists killed. Five others were severely injured.

“There are several families that are now on welfare and are on food stamps,” Nachand-Prestidge said. “I think people would be appalled.”

Even though these families were awarded settlement money to cover everything from lost wages to property damages, according to Nachand-Prestidge, “It’s not so they could retire or go on great vacations, it’s just to keep them where they were or to get them back to where they were.”

But they say they can’t use their settlement money for that thanks to a little-known practice called balance billing. As attorney Geoff Trachtenberg explains, “People are shocked to find out they have this extra obligation.”

Balance billing allows hospitals to go back to victims who not only have insurance but also settlement funds to bill them for the remaining balance. A practice legal in Arizona under ARS 33-931.

“This is significant because it represents the injured person having to pay the full retail rate,” Trachtenberg explained. “They don’t get any benefit from their insurance or any benefit of the premiums that they’ve paid.”

Nachand-Prestidge points out, “They’re almost being penalized for this because they had insurance, they’re playing by the rules, and yet are being re-victimized because they got settlement money.”

In other words, insurance companies and hospitals agree on what medical services will cost long before coverage is needed — basically, a negotiated rate.

“This is what I still have a hard time wrapping my brain around, it was a negotiated rate so the hospitals said, ‘This is fair for the services we gave you and we’re going to accept that you’re not going to pay us the full amount,'” Nachand-Prestidge said. “Well, that was agreed upon so why are you going back on your agreement?”

Nachand-Prestidge has a solution.

“If they wanted more money, they should have asked for a higher negotiated rate from the insurance company,” she said.

Trachtenberg estimates Arizona hospitals collect $100 million from balance billing each year.

“It’s morphed into an extra source of revenue,” he said.

What’s worse, it’s getting more and more common. Trachtenberg hears about a case daily.

“If it were up to me, I would fight every single one of these,” he said.

The Health and Hospital Association declined our request for an on-camera interview, saying the issue is too complex. The State House of Representatives passed a bill that would have changed the statute during the last session, but it died in the Senate.

For more information on HB 2546 visit www.azleg.gov.

Geoff Trachtenberg is the Managing Partner at Levenbaum Trachtenberg, which is an injury law firm. He can be reached at 602-271-0183 or gt@ltinjurylaw.com The office is located at 362 N. Third Ave. in Phoenix.

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Geoff Trachtenberg is a partner at Levenbaum Trachtenberg, a personal injury law firm located in Arizona, California, and Utah. You can find him on and Avvo discussing law and helping people with their legal needs.