Car insurance nightmare: After wreck, hospitalized patient crashes again, into $700,000 bill for spinal surgery

Most people are unaware that auto insurance — not health insurance — kicks in first after an accident to cover any medical bills. That can create huge financial landmines for patients.

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Mark Gottlieb’s life changed after a devastating car accident. He had smashed teeth, four damaged vertebrae and surgery on his spine ― which led to medical bills that exhausted the personal injury coverage under his automobile insurance.

Mark Gottlieb’s life changed after a devastating car accident. He had smashed teeth, four damaged vertebrae and surgery on his spine ― which led to medical bills that exhausted the personal injury coverage under his automobile insurance.

Erica Seryhm Lee / KHN

Mark Gottlieb’s life changed in an instant when another driver crashed into his car, damaging four vertebrae in his upper spine and smashing six teeth.

In the months following that January 2019 crash, Gottlieb, 59, a marketing consultant in Little Ferry, New Jersey, got the teeth crowned and, for debilitating neck pain, tried injections, chiropractic care and physical therapy. The treatments were all covered by his Geico car insurance.

As in 12 other states, New Jersey law requires drivers to buy personal injury protection, or PIP, coverage to pay medical expenses. Gottlieb had the maximum: $250,000.

Unfortunately, Gottlieb’s pain persisted.

“Nothing was working,” he said. “The only other thing was surgery.”

Though he wanted his operation performed near his home, Gottlieb said, staff members at the Bergen Pain Management clinic, where he was receiving care, insisted he go to Hudson Regional Hospital in Secaucus, New Jersey. On April 3, 2020, Gottlieb underwent a complex fusion surgery on the herniated discs in his cervical spine. He went home the same day.

His pain improved a bit. Then came the bills.

The patient: Gottlieb, who was covered for $250,000 in medical costs by his Geico car insurance. He also has an Aetna health insurance policy, which is secondary.

Medical service: Anterior cervical discectomy and fusion — neck surgery to replace damaged discs with bone grafts or implants to stabilize the spine.

Service provider: Hudson Regional Hospital, a standalone, for-profit facility in Secaucus, New Jersey, and Bergen Pain Management in Paramus, New Jersey.

Total bill: The hospital and surgeon billed Gottlieb more than $700,000. The hospital billed $445,995 for the surgery, an amount reduced to $133,778 by Geico, which ultimately paid $103,354. Bergen Pain Management billed an additional $264,444 for the main surgeon. Based on a review, Geico reduced that to $141,548. It paid $52,365 toward that before Gottlieb’s medical coverage under his auto policy was exhausted. Then, it was up to his health insurer or Gottlieb to deal with the rest.

What gives: When injuries are the result of auto accidents, car insurance is primarily responsible to negotiate and pay the insurance portion of medical bills. That creates a host of financial landmines for patients.

Gottlieb hit all of them.

With the high charges common in the United States for treatment, accident victims can easily exhaust the policy limits of even generous personal injury coverage, leaving some vulnerable to huge bills.

Though it’s rare to hear car insurers complain that they paid a hospital or doctor too much, auto insurers “typically pay more for some of the same services” than health insurers, said Robert Passmore, a vice president at the American Property Casualty Insurance Association.

In part, that’s because auto insurers generally don’t have broad networks of medical providers who’ve agreed to negotiated discounts from their billed charges, as health insurers do. So patients end up “out of network,” subject to whatever list price the provider charges.

Gottlieb said he checked with Geico before his surgery and was told it had no information for him about networks. With about $190,000 remaining in his PIP fund at the time, he wasn’t worried. He said efforts to get cost estimates were unsuccessful.

Instead of network rates, car insurers generally use other payment calculations. But not every medical billing code is listed. In those cases, they sometimes pay whatever the provider bills.

For Gottlieb, that was a lot: His hospital and surgeon’s charges, even after being reduced by Geico, were about eight times what Medicare would have paid.

Geico generally pays rates set by the state — which are dramatically lower than what was charged. But Gottlieb’s bill included billing codes not on the state schedule. For most, the insurer paid exactly what was charged, for example allowing the full price of $65,125 charged by the surgeon for removal of a damaged disc and $39,195 the hospital charged for nine surgical screws.

Click here to see Geico’s explanation of review.

Click here to see Geico’s explanation of review.

By September — with bills still rolling in — Gottlieb’s PIP fund ran out after the remaining $52,365 was paid to Bergen Pain Management, short of the $141,548 Geico had recommended as reimbursement for the surgeon.

Insurance pays bills as they’re submitted, which often is not in the order in which the treatment was rendered.

“It appears that Bergen Pain Management is still entitled to the $89,183 balance of the billing from your procedure,” Geico wrote in Gottlieb in September, saying he could submit that balance to his health insurer or pay it himself.

He submitted the surgeon’s bill to Aetna and discovered that neither the doctor nor the hospital was in his insurance network. He hadn’t checked before the operation since he never dreamed outpatient surgery would exhaust the auto policy.

That means Aetna didn’t have a negotiated rate with his providers, which might have knocked down the charges dramatically.

Instead, Aetna said it would allow an out-of-network payment of $4,051 for the surgeon, according to a Jan. 28 email to Gottlieb.

Aetna spokesman Ethan Slavin said that amount was based on Gottlieb’s policy terms, which set physician payments about 10% above Medicare rates for out-of-network care.

Because he hadn’t yet met his annual out-of-network deductible, Gottlieb would have to pay the $4,051. He withdrew his request for Aetna to pay. Because out-of-network surgeons frequently go after patients to pay the balance of such bills, Gottlieb is waiting to see whether Bergen Pain Management — which already has been paid $52,365 for the surgery — will come after him for more.

Neither the Bergen clinic nor the surgeon has sent him to collections or sued for the amount.

Neither responded to emails and calls seeking comment.

In a written statement, Hudson Regional spokesman Ron Simoncini said the hospital “charged the state-mandated fee” where applicable, and, where there was no such mandate, “The charges were reasonable.” It is not seeking additional payment.

Citing policyholder privacy, Geico declined to answer questions even about how it determines what it will pay.

Did the auto insurer pay too much?

Geico had set an allowable reimbursement of $141,548 as the surgeon’s fee.

“That is an outrageously high surgeon’s fee for this type of surgery,” said Dr. Eeric Truumees, a professor at Dell Medical School at the University of Texas-Austin.

“I do a tremendous amount of complex cervical spine surgery and never had a fee that high even for complex surgery that takes 10 hours,” said Truumees, president of the North American Spine Society, who had no direct knowledge of Gottlieb’s case.

Altogether, Geico recommended and partly paid nearly $245,000 to the hospital and surgeon.

In contrast, Medicare would have paid about $29,500 for the procedure, about $1,800 of that to the surgeon and the rest to the hospital, according to researchers at Rand Corp. who agreed to analyze Gottlieb’s bills.

The surgeon’s bill was also high compared with what private insurance usually pays, according to Barry Silver of Healthcare Horizons Consulting Group in Knoxville, Tennessee. Silver compared Gottlieb’s bills with hundreds of similar claims from two carriers that administer employer-based health insurance nationwide. Whatl Geico paid the hospital was in line with what employers paid and actually was less than the two highest fees seen in his data. But the highest allowed charge in Silver’s database for the surgeon’s fee was $87,549 — far less than the $141,458 Geico recommended.

Mark Gottlieb’s $250,000 personal injury protection from Geico ran out before his surgeon was fully paid, leaving him potentially on the hook to have to pay thousands of dollars himself.

Mark Gottlieb’s $250,000 personal injury protection from Geico ran out before his surgeon was fully paid, leaving him potentially on the hook to have to pay thousands of dollars himself.

Erica Seryhm Lee / KHN

Resolution: Gottlieb remains in the dark about whether Bergen Pain Management will seek the remaining $89,000 toward his bill.

Previously, Gottlieb sued the driver who caused the accident — and won a substantial “pain and suffering” court settlement, which he wants to preserve for future medical needs.

He has filed numerous complaints about his bills with state regulators, lawmakers and his insurers. Aetna sent his surgeon’s bill to its internal Special Investigations Unit following his complaint.

But, “based on our investigation, we determined there was no further need for action,” Slavin said.

The takeaway: Most people are unaware that auto insurance kicks in first after an accident and that it works very differently from health insurance — so you have to pay attention to how the policies coordinate.

That’s especially true if the accident requires major treatment.

If you have a low amount of personal injury coverage in your car policy, your medical bills could well kick over to your health policy. So when you sign up for nonemergency treatment — especially if it’s extensive, like surgery — it’s important to make sure the providers are in your health insurer’s network.

Some auto insurers have networks. Ask whether yours does.

Try to get cost estimates in writing for nonemergency care and compare that with what you have left in your auto policy coverage.

“If it’s more than you have left, it may be possible to negotiate with the hospital or doctor to reduce their charges,” Silver said.

Contributing: Stephanie O’Neill

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism on health issues.

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