Second NICU family in Colorado says "birthday rule" confusion led to denied medical claims

A second family in Colorado says a little-known insurance rule has left them fighting two companies to get medical bills paid.

Last month, CBS Colorado told you about the Peer family who spent months trying to get their son's NICU stay covered after the so-called "birthday rule" caused confusion about which one of the parents insurance companies should pay first.

Now Stephanie Hudson and Andrew Feeney are dealing with the same issue.

Bringing home their baby boy Brody should have marked the end of a stressful week in the NICU. Stephanie says she believed she was doing everything right during a difficult time.

"I thought I was doing the right thing at a really hard time in my life," she said.

Knowing the hospital bills would be significant, Stephanie says she added Brody to her employer's health insurance immediately after he was born.

For months, everything appeared to be covered. Then the collection notices started arriving.

"Our insurance had paid out the claims and then retroactively taken back the money," Stephanie said. "It was a huge surprise and awful to deal with."

The couple says they later learned about Colorado's "birthday rule," which can determine which parent insurance pays first. If both parents have health coverage, a newborn is automatically assigned to the parent whose birthday falls first in the calendar year.

Andrew says no one explained that before or after Brody was born.

"I went to a dad's class. We went to classes where they showed us everything that was going to happen. We toured the hospital," he said. "We were good first-time parents preparing for this child, and not once did someone say, 'You need to make sure your insurance is aligned.'"

Andrew's birthday comes first in the year.

He was covered through Group Management Services, or GMS. The company continues to deny the family's claims, arguing that the birthday rule does not apply in this case.

In a statement to CBS News Colorado, GMS said, "GMS's position is that coordination-of-benefits determinations are based on the governing plan documents, the specific facts and circumstances presented, and applicable law."

"It's like you messed up. You should have added him to the insurance," Andrew said. "And I'm thinking that we decided we only want to pay one premium. Why is this my fault?"

The Colorado Division of Insurance says the birthday rule is a national standard designed to prevent situations like this. In a statement, the agency said the purpose of the rule is to prevent parents from getting caught in the middle of two insurance companies. The division says it is reviewing its regulation to determine whether parents should instead be allowed to choose which insurance plan covers their newborn during the first 30 days of life. That review remains in its early stages.

"There needs to be education in every Colorado hospital," Stephanie said. "This is such an easy fix that can create such a huge problem. It's totally preventable."

The couple says months of phone calls and uncertainty have overshadowed what should have been one of the happiest times of their lives.

"To be honest with you, dealing with the insurance has been worse than the NICU," Andrew said. "The NICU people were wonderful. The insurance communication has just been horrific."

GMS told CBS Colorado that client privacy prevents them from providing specifics for the denial.

The U.S. Department of Labor is now investigating the case.