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What Is a Hospital Lien?

Posted on June 18, 2018

Hospital liens are a right of hospitals and emergency care services. Liens enable a hospital to receive first payment from the negligent third-party to the injured victim. In other words, while you file your claim against the responsible party of your accident, the lien gives the hospital first rights to any payment you receive from the claim.

What Does a Hospital Lien Do?

Accidents can result in injuries, some of which require emergency treatment. For example, if you were in a car accident, you may receive medical treatment from a hospital. Another party was at fault for the accident, and you may pursue a lawsuit against them. After heading home and completing recovery, you open an envelope from the hospital. It contains your bill, as well as a document labeled as a lien.

Hospital liens are only valid in emergency situations and can also only apply to treatment given in a set time around the accident. Their purpose is for hospitals to recover any costs of treatment and receive their payment before any other party involved. Only hospitals and other emergency care services have the right to file a lien. If you receive treatment at more than one hospital due to your accident, the lien can apply to all of them.

When Is a Lien Valid?

A lien is often an automatic right of the hospital, so long as the situation meets specified requirements. Liens often require an accident to be a third-party’s fault and for the treatment provided to be necessary to prevent death. If provided treatment meets these conditions, the lien is automatically active.

The lien holder must send written notice to the patient and file a notice of lien for it to become perfected. Once the lien is perfected, the hospital can then enforce it.

The lien holder must enforce the lien before the patient has received any payment. For example, if you settled your lawsuit and received your payment before the hospital filed its lien, the lien would not be enforceable.

Even if your health insurance can cover the treatment, the hospital might still file a lien. This is not valid in cases where the hospital has contractual obligations to deal with your insurance company. If you do not have insurance or it is insufficient, the lien allows the hospital to seek full payment for your treatment.

If a hospital does not follow the specific requirements for filing a lien, the request may become null. A nullified lien only means that you do not have to pay the hospital any of your settlement; you must still pay your medical bills.

Why Do Hospitals File Liens?

One reason hospitals file liens is to guarantee payment for their treatments and services, such as in cases where the injured party does not have insurance. In other cases, a hospital may file a lien because doing so nets the hospital a bigger payment than a reduced rate through insurance. It may only be necessary for a hospital to prove its claim is “reasonable” to receive priority on the settlement.

A hospital may use a lien to take a disproportionate amount of your settlement in relation to treatment received or attempt to file a lien without necessary requirements. A lawyer can help determine when a lien is valid, keep you from losing all your settlement to a lien, or convince the hospital to file a claim through the insurance company instead.

With the confusing requirements of liens, it can be best to seek attorney assistance so that you can focus on recovering from your accident. If you received a hospital lien letter, bring it to your attorney to help with next steps.