In many states, hospitals and medical insurance companies can place a hospital lien against a personal injury settlement. If the victim has filed a personal injury lawsuit, then the cost of the patient’s medical bills may be filed as a medical lien against the settlement. In such circumstances, the lien will be deducted first before the patient who filed the claim receives their settlement. A hospital lien against a settlement is an ideal way for a hospital to guarantee that they will ultimately receive the revenue that they are due.
Common Errors in Filing a Medical Lien
Unfortunately, there are common areas of oversight that occur during the entire lien process that may cost the hospital payment.
- Time Lapse: Not filing the lien in time is one of the most common occurrences. In most states, the lien must be filed in the county the hospital is located within 180 days of the patient being discharged.
- Correct Information: The lien must contain accurate information. The patient’s name, patient’s address, address of the hospital and all dates of services must be error free, or the lien will be invalid.
- Insurance Payment: If the hospital bills the patient’s insurance and receives payment from the insurance company, then the hospital cannot place a lien on the settlement for the remaining balance.
Failure to Correctly File Renders Medical Liens Unenforceable
The failure to comply with all the necessary statutes will make the lien unenforceable. If the hospital fails to adequately or correctly file the lien doesn’t mean that the patient does not remain responsible for the bill. The patient will still be required to pay their balance in full or setup acceptable payment arrangements.
If a lien is filed accurately, then the hospital can recoup a variety of hospital expenses such as:
- Hospital services
- Physician services
- Nurse services
- Emergency room expenses
- All hospital services
- Medical supplies
- Ambulance services
- Surgical expenses
- Dental services rendered in the hospital
Accurate Information Must be Gathered
It is imperative that hospital staff gather accurate information at the time of the patient’s intake and discharge. All insurance information, addresses, and names must be accurate. Ensure that your staff is in the habit of this. Lack of adequate information can hinder a medical lien, and make it difficult for a hospital to collect what’s owed.
Traditionally, third party liability only accounts for 5 percent of a hospital’s revenue, but this can be a sizable amount of money. Having skilled staff to handle such situations is imperative to make sure that the hospital ultimately receives payment for services. In many cases, a hospital can successfully receive a far higher revenue payment by filing a lien than billing the patient’s health insurance provider.
Things to Keep in Mind
Here are several things that should be kept in mind when filing a hospital lien:
- State Laws: Not all states allow hospital liens to be filed against personal injury settlements.
- Non-enforceable: If all of the paperwork isn’t filed correctly, then according to the state’s statutes, it won’t be enforceable.
- Patient Responsibility: Even if a lien is filed, the patient still remains responsible for the hospital fees until the lien is satisfied.
- Lien Reduction: Hospital liens can often be reduced if the patient retains an attorney to negotiate a reduction.