Reviewing medical records and billing statements are a routine practice throughout pre-suit and the litigation process. With the rise of third party billing entities, it has become common place to receive a statement that was issued from an entity other than the one that rendered treatment. If the charges seem disproportionate to the treatment rendered or a number of other oddities appear on the statements, you may be dealing with a medical funding company.
A medical funding company is a non-party that contracts with a prospective plaintiff’s providers to provide funding for either the treatment or part of the litigation. In return, the medical funding companies receive an assignment of the bill. Funding companies are different from traditional insurance plans insofar as medical funding companies do not collect premiums and do not receive any payment until the resolution of the matter through trial or settlement.
The involvement of a funding company may lead to an increase in cost of medical services rendered, also perhaps notably in contrast to the quality of such that are received. Often at trial, the presence of a medical funding company may not be admissible at trial due to the collateral source rule. The collateral source rule prohibits the admission of evidence that a plaintiff received compensation for medical bills through sources like insurance benefits. Therefore, the medical funding company can hide under the cloak of being a third-party payor even though its function is drastically different.
Georgia Courts have recently allowed evidence of a medical funding company under the premise that the costs may not be reasonable and that any referrals that arose from the relationship with the funding company may be inherently biased.
To uncover whether an entity is a medical funding company, work needs to be done early in the discovery process. If you have questions regarding how to address medical funding companies, please give us a call.
About the Author Rachel Reed is an Associate at Mabry & McClelland, LLP. Her practice includes civil litigation with a concentration in defending premises liability and personal injury actions. She also practices within the areas of motor vehicle accidents and common carrier liability.
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