Can A Hospital Place A Lien On Your Accident Settlement?
26 Jul 2007
When you are treated in a hospital as a result of an accident, can the hospital seek to recover some or all of its charges from your lawsuit or settlement? The short answer is, "sometimes yes."
Some hospitals are no longer satisfied with the payments made by accident victims' health insurance. They are seeking a share of the money patients get from lawsuits and settlements.
They are even seeking the money when they have received substantial partial payment from the patient's health insurance policy.
In case after case, even while the patient is still in the hospital recovering from a car crash, hospitals are demanding that the patient pay the difference between what the health insurance company paid and what the hospital claims was the actual cost of the services.
Some hospitals are placing liens against any money that patients might recover from those who caused the injuries. These liens can significantly reduce the net compensation or recovery of the accident victim.
And, they are taking this step despite having previously negotiated discounted fees with the victim's health insurance company.
Health insurers and some courts say that the liens are improper when hospitals agree to accept a patient's insurance as full payment for care. Other courts, unfortunately, are permitting the liens to stand.
The situation is particularly difficult for the accident victim when the hospital has statutory lien authority. This authority is sometimes granted to public hospitals, ones owned by cities, for example.
The concerted effort by some hospitals to seek additional payments and to place liens is probably the result of hard times within the health care system. The problem stems from the dominance of large managed care firms, whose main strategy has been to reduce costs by negotiating lower fees with groups of doctors and hospitals. The net result has left many health care providers with too little cash.
Several managed care companies are near insolvency. Hospitals are finding that the discounted fees do not generate enough money for them to stay afloat.
Now, many accident victims complain that they are caught in the middle.
The practice of placing liens against accident victims' settlements or verdicts is becoming increasingly common. It is believed that the practice of placing liens has yielded millions of dollars for some hospitals.
There are even companies that actually place the liens for the hospitals. One such company has reported placed more than 5,000 liens a year, for amounts ranging from $700 to $400,000. The company's share can be as much of 25% of the money it collects.
It is becoming commonplace for the lien-placement companies to place an employee, called a "recovery analyst," in the hospital. The job of the employee is to review patient records to see what injuries caused them to go to the emergency room.
Injuries caused by blunt force, for example, signal a strong likelihood that the patient was hurt in an accident caused by someone else
Accident victims are now receiving letters informing them that the hospital plans to hold the negligent party responsible for the hospital's medical costs--even though the hospital might have signed a contract to accept the accident victim's insurance.
All of this requires that the accident victim seek proper representation as soon as possible. Experienced counsel has knowledge of the rights of the hospital, the validity of any liens, and the steps to be taken to minimize the impact of the hospital claims. Delay in seeking competent representation may result in later difficulties in dealing with the hospital liens.
