Medical Billing Blog

Who Pays For Services Provided To Minors? (Part 2 of 3)

Posted by Ali Ziehm on Wed, Aug, 08, 2012 @ 12:08 PM

Some Minors are responsible for their own medical billsBy Ralph Sitler III, JD -- Last week, we discussed why it’s important for providers to consider the type of service rendered to minors when determining who has authority to contract that service, and how to determine who bears financial responsibility to pay for those services under various conditions.  Essentially, we covered what types of services minors can authorize on their own behalf, and whom to bill for the services.  We also discussed some pretty serious considerations to take into account when submitting claims to an insurance plan for reimbursement of services self-authorized by minors when the insurance plan policy holder is the minor’s parent or guardian.  HIPAA guidelines are a little vague when it comes to notification of other individuals when a minor has self-authorized, so be sure to check out that first blog in this series to make sure you’re up to date on the guidelines.

Essentially, a minor cannot enter into contracts on his or her own behalf until reaching the Age of Majority, which, in most states, is 18 years old.  This means they cannot authorize their own medical care either, except in certain circumstances, where State or Federal Law have determined that minors do have the capacity to make informed consent on their own behalf and contract for care.  In these circumstances, the minor also then assumes financial responsibility to pay for that care, and the provider cannot pursue the minor’s parent or guardian for payment of claims.  In Michigan, there are three main exceptions to the Age of Majority Rule, and in each case a minor has varying degrees of authority when contracting for certain types of care.  Most of what we discuss in this blog series is based onMichiganlaw, so you should be sure to contact a qualified, licensed health care attorney in your own jurisdiction for advice if you face a specific situation.  Also, this series should not be construed as legal advice, but is only intended to explain general guidelines set forth under the law in Michigan.  You should always consult with your own attorney before taking any action with regard to a particular case in point.

The first exception to the Age of Majority Rule, covered in the first article in this series, permits minors to contract for their own care for outpatient mental health care, substance abuse care and prenatal care.  There are age and scope stipulations, though, so be sure you are familiar with the fine print by reading the previous article in this series, or by conferring with your own healthcare attorney.

Exception Two:  Emancipated Minors.  Another instance in which a minor can authorize care is when the minor is legally emancipated from their parents or guardians.  The process of becoming emancipated involves obtaining a legal determination from the courts awarding emancipated status to a petitioner (minor) who is 16 years or older so they are no longer under the control of their parent or guardian.(1)  The effect of this determination is that the minor becomes an adult, legally entitled to enter into contracts on their own behalf, but also accordingly liable for obligations under those contracts.(2)  This means they can authorize all medical care for themselves, and they are also responsible financially for the care they receive.  Their parents or former guardians no longer have any legal authority over managing the affairs of the minor, and are also no longer liable for the minor’s financial obligations or any determinations of their care.(3)  Emancipated minors are also granted wider rights to authorize and contract for medical care, including the right to seek inpatient care, prescription medication, and pregnancy termination services.  Since emancipated minors are considered adults in legal and contractual matters, they are also able to purchase their own insurance policies, thus removing the question of whether explanation of benefits notifications would be sent to the parents, since the parents are not a party to the policy in question. 

Very few minors are ever granted emancipation by the courts, though a minor can become emancipated by virtue of marital status or military service.  In both cases, (married minors and/or minors who are enlisted on active duty in the armed services) the minor is considered free of all parental control and responsible for his or her own fiscal obligations, even if a decree of emancipation was never issued by a court.(4)

Next week, we’ll cover the third demographic exception to the Age of Majority Rule and how it affects not only financial responsibility for medical services received, but also how it affects a provider’s responsibility to protect the patient’s privacy under HIPAA  While it may seem somewhat clear that Minors Who Have Reached The Age of Majority would be responsible for covering their own expenses, the new healthcare law has muddied the waters somewhat when it comes to protecting privacy and collecting for services when claims for the young adult’s care are submitted to a policy still held by a parent or guardian.

(1) Emancipation of Minors Act, MCL 722.1-722.6

(2) Emancipation of Minors Act, MCL 722.4e

(3) Emancipation of Minors Act, MCL 722.4

(4) Emancipation of Minors Act, MCL 722.4