What is a hospital lien in Alabama?

7493614_sIf you are injured in an accident such as an automobile wreck and are treated at a local hospital emergency room, it is likely that you may get a notice of a “hospital lien” from the hospital or a company representing the hospital.   Pursuant to Alabama Code Section 35-11-370, a hospital shall have a lien for the reasonable charges for hospital care of an injured person who entered the hospital within a week of receiving such injuries.  The lien does not attach to a person’s real property (land) or personal property (belongings).  Instead, a hospital lien attaches to any action, claim, settlement or judgment against any person or entity whose acts or omissions caused the injuries requiring hospital care.

Although the hospital or its representative will often file the lien in the probate court in the county where the accident occurred, the Alabama Supreme Court has held that a lien does not have to be filed in probate court to be valid.  In Guin v Caraway Methodist Medical Center, the court concluded that a hospital lien arises “automatically” in the event someone suffers injuries and receives treatment at a hospital when there is another person or entity responsible.   In most instances, a personal injury attorney or an insurance adjuster that handles claims will determine whether a lien will impact a claim.

Typically, a hospital will assert a lien in any situation where a person is transported to the hospital emergency room by an emergency medical service such as ambulance or helicopter.   This type of lien is only available to hospitals.  Doctors, chiropractors or other healthcare providers cannot assert a lien against a settlement or judgment unless the injured party executes a document giving them rights to the proceeds.

You may receive notice of a hospital lien even if you have provided the hospital with information about your available health insurance coverage.  In some instances, the hospital will be contractually required to file with your healthcare insurance and accept their payment as full satisfaction of the charges.  In this case, the hospital will be required to withdraw its lien.   It is important to provide health insurance information to the hospital as soon as possible because there may be a time limitation – typically one year — on when a claim may be filed.   In other situations, the hospital may not be required to accept payment from your healthcare insurance and will seek payment from the settlement or judgment.

If there is no health insurance available or the hospital refuses to file with your health insurance carrier, the hospital’s lien allows it to seek full payment of the total charges from any settlement or judgment.  This is allowed even though the hospital would have to accept a much lower amount – many times less than half of the total charges — from private healthcare coverage or government programs like TriCare, Medicare, and Medicaid.  As long as the hospital can show that its charges are “reasonable” they will be allowed to assert a claim for the total charges.  In fact, the Alabama Supreme Court, in Roberts v Univ. of Alabama Hospital, held that the amounts a hospital accepts as full payment from Blue Cross and Blue Shield, Medicare and Medicaid are not relevant when considering whether the hospital’s charges are reasonable.

Hospital liens may create a substantial problem in the event that there is a limited amount of insurance available to resolve a claim.  If this is the case, our attorneys at Siniard, Timberlake & League, P.C. are often able to negotiate a reasonable resolution with the hospital or convince the hospital to file with a health insurance company.