What Is A Hospital Lien?

Did you know? According to the National Highway Traffic Administration, car accidents happen every 60 seconds. That means about 5.25 million accidents happen across the nation on a yearly basis. If you are involved in an auto accident, it can become very stressful and overwhelming rather quickly. Imagine if you are injured in the accident and must be taken to the hospital for treatment. The costs of your auto accident and hospital bills are extremely expensive, which adds to your stress.

In many states, hospitals and medical insurance companies can place a 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 hospital lien against the settlement. Doctors are required to provide patients with care even if they cannot pay for it. This means they can put what’s called a lien against the patient’s settlement or judgment. This ensures that the doctors are compensated for the care that they provided to the patient.

What Is A Lien?

A lien is something that is put into place to ensure a person, group, or business is compensated for services or goods that are provided to someone else. If the patient filed a bodily injury insurance claim or personal injury lawsuit to recover the cost of their medical bills, then the health insurer who paid for the medical costs may be able to file a lien against any proceeds from the patient’s lawsuit. This is known as subrogation. 

A medical lien demands repayment that is placed against your personal injury case. Whenever a personal injury lawsuit is filed, the amount of money the patient has already spent and could spend on future treatments are considered.

What Is A Hospital Lien?

Depending on the state an accident victim was treated in, hospitals and sometimes other medical providers can file a hospital or physician’s lien against an accident patient’s liability settlement or personal injury judgment. In states where other medical providers are not allowed by statute to file a lien, medical providers will ask the patient to sign a lien letter stating that they submit to a lien against their personal injury settlement. Where the law allows hospitals and/or other medical providers to file a lien, there are requirements that they must follow when placing a lien against the patient’s settlement.

• The lien must be filed within a specific time period. This is usually before the patient is paid from the settlement or judgment.
• The lien must have certain information included on it as defined by the state’s law. This often includes the patient’s proper name, correct address, the name and address of the hospital, the amount of the lien being claimed, and the dates of service.

Hospital staff must gather accurate information at the time of the patient’s accident-related intake or discharge. All liability insurance information, address, and names must be accurate. Inaccurate or  lack of adequate information can hinder a medical lien and make it difficult for a hospital to collect what is owed. If the hospital does not follow these requirements, their lien may not be enforced. One thing to consider is that it does not mean the patient is not responsible for the bills. This just means that the hospital may not be able to collect payment directly from the patient’s settlement. Further, if a patient has private health insurance, it must be billed first, and the lien can only be filed on any patient portion left over after the health insurer has made payment to the hospital.

Risky for Medical Care Providers

Providers and hospitals could wait years to receive their payment once a medical lien is placed. Plus, the patient might not receive any damages once it’s all over with. Some hospitals will negotiate timely payments instead of getting a medical lien out against the patient to avoid this.

If a patient retains an attorney, the legal counselor can often negotiate with the hospital to reduce the amount of the lien. In some states, the attorney may require the hospital to pay a pro-rata portion of his fees under the “Common Fund Doctrine.”. This is because the attorney is credited with creating the pool of funds from which the hospital will be paid. Therefore it is considered “fair” that the hospital pays the attorney for his or her efforts.

Cover Hospital Expenses

Many medical expenses can be covered by a personal injury lien. These expenses include:

• Nursing services
• All ambulance services
• Emergency room services
• Surgical expenses
• Medical supplies
• Physician services
• Dental services obtained in the hospital
• Drugs and medications
• Hospital services

Now What?

The professionals at the Midland Group understand the intricacies of a hospital lien from both the hospital and patient’s perspective. Contact us today to get the help you need during these difficult circumstances, or claim your FREE Accident Reimbursement Assessment & Custom Report tailored to YOUR facility!