State Court of Appeals Allows Hospital to Take Patient’s Personal Injury Award

Eighteen Florida counties allow hospitals to pay for a patient’s care by granting them the ability to take a portion of the patient’s legal judgment or settlement. This is called a hospital lien, or a right to secure a debt. A patient may seek treatment at a hospital for an injury sustained in a car or work accident. If that patient sues the negligent party and has unpaid medical bills, the hospital can file a lien against any potential judgments or settlements to recover the amount billed.

Wisconsin has a state statute granting similar rights to hospitals to enforce liens against a patient’s judgment or settlement. The state’s appellate court recently handed down a decision in favor of a hospital and its ability to enforce a hospital lien. In that case, the patient qualified for Medicare, but the hospital chose to enforce the lien instead of billing his medical care costs of $19,423 to Medicare. The plaintiff sued, but the trial court granted summary judgment to the hospital. The injured party argued that federal law mandates hospitals to bill Medicare for those who qualify for Medicare and not the individual. The injured plaintiff depended on a memo from the U.S. Dept. of Health and Human Services that interpreted the Medicare provision to bar hospital from enforcing liens after the Medicare billing period expired.

The trial and appellate courts, however, decided that the Medicare law does not require hospitals to withdraw their liens after the Medicare billing period had expired and that 42 U.S.C. § 1395y(b)(2)(A)(ii) allows Medicare to become the “second payer” if there’s expected third party liability. The appellate court rejected the injured plaintiff’s reliance on the DHHS memo, stating that the memo does not provide a reasonable interpretation of the Medicare law.

This past year, the Supreme Court of Florida declared Florida’s state law granting hospital liens unconstitutional in Shands Teaching Hospital and Clinics, Inc., v. Mercury Ins. Co. of Florida. It allowed local ordinances to stand, but determined that the state lien law was a ‘special law’ pertaining to the creation, extension, or impairment of liens based on private contracts. The court considered the care between the teaching hospital and the patient to be a private contract, so a lien cannot be enforced through legal action under state law. A Florida hospital may be able to enforce a lien against an injured party’s judgment, but only if the hospital is in a county with an ordinance granting them that right. The hospital must follow the proper procedures to file the lien so that all parties are notified that the lien exists. Insurers are supposed to check for all potential hospital liens before issuing a check to the injured party.

Injured parties often contest the amount of the hospital lien. Hospitals enforce liens attached to uninsured parties or parties who qualified for federal entitlement benefits, but they secure the amount of the original bill – not the amount that would have been billed to a program like Medicare or Medicaid. The original hospital bill is often grossly different than the negotiated amount an insurance company pays, and the hospitals may even seek the difference from the insurance company and the original bill, even though the injured party would not have been responsible for that amount.

The South Florida personal injury attorneys at Friedman, Rodman & Frank aggressively fight for every cent of compensation from the beginning of the case till the injured has been truly, duly compensated for their injuries. With nearly 100 years of combined experience, these experienced litigators know how to handle negotiations with insurance companies and hospitals to maximize the amount recovered for injured plaintiffs. If you have been injured in a car, construction, or work accident, call Friedman, Rodman & Frank for a free, confidential consultation at (877) 448-8585.