Navigating hospital and provider liens in personal injury cases can be a labyrinthine process. These liens trigger ethical considerations, generally involve inflated charges, and have intricate state-specific regulations to navigate. For personal injury attorneys, understanding these liens and devising effective strategies to manage them is crucial.
The Challenge with Hospital Liens
Hospital bills often include charges that greatly exceed actual costs. Many hospitals leverage lien rights, often supported by statutes, to attempt to secure payment for these excessive charges. Negotiating from full billed charges is a strategic mistake; these figures are often inflated and not reflective of the true cost of care. Instead, the focus should be on negotiating from a reasonable value standpoint.
Is the claim a lien or debt?
The first step in resolving hospital/provider claims is understanding whether you’re dealing with a lien or a debt. A lien is a legal claim on settlement proceeds, generally established by statute or contractual agreement. Conversely, a debt arises from unpaid medical care. When you are dealing with a debt, the question for the personal injury victim as a starting point is whether they want to resolve the debt from their settlement proceeds. In most instances it does make sense to encourage resolution so as to avoid having debt collection pursued in the future.
In contrast, liens are a legal claim against the personal injury recovery, borne out of statutes and ordinances. For example, while California has consumer-friendly lien laws, Florida’s regulations vary by county. Familiarizing yourself with state-specific lien statutes and common law is essential for effective resolution for a valid lien.
Best Practices for Resolution
- Identify and verify the existence of any hospital lien claims versus just a debt.
- Once identified, check to see if the hospital has properly “perfected” the lien under appropriate state law. Also, determine under your state law the legal limitations on a hospital’s right to reimbursement.
- Confirm whether the hospital has already received any payments from insurance and whether there is a balance.
- Dispute any attempts to balance bill if payments were received from insurance.
- Engage in negotiations using the following as a guide to different available arguments (Note: Not all will apply, assess your case and use appropriate arguments):
- Challenge any unrelated charges in the hospital billing.
- Use reasonableness arguments for the charges.
- Make any arguments available under state statutes for limitations on reimbursement.
- Argue equitable doctrines like common fund or made whole, if available under state law. Raise arguments related to client hardship, limited insurance policy limits, and comparative fault to negotiate further reductions in the lien.
- Use pro rata share types of arguments in cases with multiple lienholders, argue for a pro rata distribution of a set amount of the settlement pool of funds.
- Finalize resolution by obtaining a complete release of the lien from the hospital.
Conclusion
Resolving hospital/provider claims is indeed a complex task, but with a strategic approach, attorneys can effectively manage these claims. By focusing on reasonable charges, understanding local lien laws, and employing robust negotiation strategies, you can mitigate the impact of hospital/provider claims and ensure that your client’s net recovery is protected.
Working with specialized lien resolution companies can provide essential expertise and prevent costly mistakes when it comes to hospital & provider claims. If you want to find out more, contact us today to Partner with Synergy for lien resolution.
Written by: Jason D. Lazarus, J.D., LL.M., MSCC | CEO
