Wednesday, September 23, 2015

Understanding Uninsured Medical Expenses

If you want to get divorced in Washington State and you have minor children, the court will have to enter an Order for Child Support (OCS). Among other things  OCS always contains a section on medical insurance for the children and how uninsured medical expenses are divided between the parents.

What are "uninsured medical expenses?"

RCW 26.18.170(18)(d) defines “uninsured medical expenses” as “premiums, copays, deductibles, along with other health care costs not covered by insurance.”

How are they divided between parties?

In many cases, one parent is responsible to maintain health insurance for the children and both parents share the cost of uninsured medical expenses. Occasionally, parents agree that only one of them will be responsible for 100% of the uninsured medical expenses.

As we all know, many insurance companies required people to seek care at their approved facilities/providers or obtain pre-approval for out-of-networks doctors or facilities. Failure to follow that requirement usually results in insurance company’s refusal to pay for the treatment received.

When both parents are sharing the cost of uninsured medical expenses, they both are interested in lowering that costs and thus both have an incentive to follow procedures of their health insurance company. But when only one parent is responsible for 100% of the cost, then what is the incentive of the other parent to follow the procedure? What happens if they don’t?

In recently released published opinion In Re The Marriage Of: Victor M. Zandi v. Deanna M. Zandi, the Division II of the Court of Appeals looked at exactly that situation, where father was responsible for 100% of all uninsured medical expenses and mother took the child to an out-of-network facility to receive first diagnose the child with kidney stones and then to do the follow up surgery to remove a large kidney stone.

“The nearest Kaiser (health insurance Company) medical facility was 4 to 8 hours away. The aunt took the child to a non-Kaiser facility for the follow up surgery. Although a doctor at this facility stated that Kaiser would cover the costs of the surgery, Kaiser refused to pay the approximately $13,000 in medical bills.” See full text of the court opinion here.

Mother filed petition to modify child support and to order the father to pay medical expenses as “uninsured medical expenses.” The trial court concluded that the medical expenses should be divided between the parents. The mother appealed.

Court of appeals reversed trial court’s decision stating that “because the plain language of RCW 26.18.170 includes as “uninsured” expenses any costs “not covered by insurance” and because Kaiser (medical insurance) is not covering the disputed medical expenses, they concluded that the trial court did not err in determining that the expenses are uninsured.”

The court of appeals also found that the trial court failed to follow the procedure for modification of the order for child support by requiring the mother to share the cost of incurred uninsured medical expenses. Trial courts do not have power to change existing court for child support without finding substantial change of circumstances before modifying the order.

The court of appeals also noted that “in so ruling, we are mindful that the record does not demonstrate that, under the circumstances, the mother acted unreasonably in choosing a non-Kaiser facility to perform surgery. Therefore, we need not decide if, pursuant to the child support order, the father would have to pay all of the uninsured medical expenses if a Kaiser facility had been readily available and the mother acted unreasonable in not taking the child to it.”

The bottom line is the following:

1.       The best way to insure that both parties follow procedures of health insurance companies before seeking treatment is to make they share the expense of that treatment. If mother is the case above was responsible for even 25% of the cost of uninsured medical expenses (which is $3,250), she would have thought twice before taking the child to an out-of-network facility.

2.       If approach No. 1 is not an option or not a best option for divorcing parents, then the father should demonstrate:

a.       The mother acted unreasonably in choosing an out-of-network facility and

b.      The network facility was “readily available” to the mother

However, even if the two prong test identified above is satisfied, there is no guarantee that the court will make both parties responsible for incurred uninsured medical expenses.