Accident Victims and Hospital Liens

Alabama accident victims are now being confronted with Hospital Liens for “unpaid” medical bills even when they have health insurance. The article below was written by attorney Knox Boteler and explains this current trend of hospitals filing liens for payment instead of billing health insurance. If you have questions about your injury claim and a hospital lien, please call us today: 251-433-7766.

A troubling trend is developing in Alabama’s healthcare system – hospitals are making every attempt to avoid billing a patient’s health insurance. Over the last year, more and more accident victims suffering injuries as a result of automobile collisions, slip and falls, and product defects found hospitals filing liens against them for payment of medical services rather than billing their health insurance. Through the use of Alabama’s Hospital Lien Statute (ALA CODE §35-11-370), hospitals are filing liens in Alabama’s probate courts in hopes of recovering a larger payment for its services to accident victims than what is allowed by the hospital’s contractual relationships with private health insurance carriers, Medicare, and/or Medicaid. It should come as no surprise that a majority of Alabama hospitals attempting to circumvent the health insurance system consider themselves “non-profit.”

By now, it is common knowledge there is a vast difference between what a hospital bills for services and the amount a hospital expects to receive as payment from private health insurance carriers, Medicare, and/or Medicaid. This concept, historically, left only the uninsured as those subject to the hospital’s high charges. Now, however, many Alabama hospitals are seizing upon the language found in the hospital lien statute and insurance regulations to circumvent an accident victim’s health insurance coverage. As recently published by the Centers for Medicare & Medicaid Services (CMS), avoiding insurance coverage can result in a reimbursement rate of three to four times higher for a hospital than the Medicare reimbursement for services.

Filing hospital liens against those with health insurance coverage ignores the original purpose of the hospital lien statute: to create an incentive for hospitals to accept accident victims who needed medical care, but who may be either uninsured or unable to pay for such services. Typically, through the filing of a lien in the probate court where the accident victim’s injury was sustained, hospitals could enforce a claim against those monies owed to the uninsured patient by anyone legally responsible for causing the injury. Should the lien be impaired or not satisfied, the hospital could seek a recovery not only against the uninsured patient, but all those responsible for impairing the lien, including the liability insurance carrier. Such an impairment would not be limited to one’s insurance liability limits.

A hospital’s decision to avoid health insurance coverage has uncertain consequences upon an accident victim. First, it all but forces a victim to file a liability claim against a wrongdoer, even in a fender bender situation. In many instances, particularly with the elderly, an accident victim does not want to be hassled and bothered with a liability claim; they simply went to the hospital to get checked out after an accident. Unfortunately, under the new collection strategy of many hospitals, a hospital lien will be filed as opposed to filing with the victim’s health insurance carrier in hopes of recovering a greater reimbursement. Such a tactic all but forces a victim to make a liability claim against a wrongdoer. Second, as insurance agents remind clients everyday, health insurance is one of many coverages that protect customers from those events that could have significant, long-term financial effects. A hospital’s attempt to circumvent an accident victim’s health insurance can close that umbrella of protection. For instance, a hospital’s filing of a hospital lien to collect its charges of $15,000.00 from a wrongdoer’s liability insurance policy of, only, $25,000.00 leaves much less for the accident victim to recover for lost wages and general damages than if the hospital had just filed the claim with the victim’s health insurance carrier. Last, no one knows for sure how the filing of a hospital lien impacts an accident victim’s credit rating. It is assumed, though, there is a negative impact; especially, those instances where the liability claim and the hospital lien remain pending for a year or longer. In those situations, it must be assumed the credit rating services are reporting the outstanding hospital liens as an unpaid debt owed.

As this trend develops, it is important for Alabama residents to notify their legislators of this tactic in hopes the legislature can stop this collection tactic for good. For now, though, it is necessary for individual accident victims to aggressively fight with their treating hospital on this issue. Unfortunately, because hospital say they can file hospital liens, many accident victims with health insurance coverage are assuming there is nothing that can be done – this is not the case. Recently, the Mobile, Alabama law firm of Boteler, Finley & Wolfe was able to void a hospital lien that was filed for a date of service outside the statute’s requirements defining eligible dates of service. In another case, the firm worked with the client’s automobile insurance carrier to successfully challenge the reasonableness of the hospital charges as presented in the hospital’s lien. While these recent successes were of a great benefit to the clients, both of whom had health insurance, and moral victories for the firm, this tactic needs to be challenged in more instances by accident victims and their lawyers. The more challenges made against the tactic, the more burdensome it makes this collection practice for the hospital. With these challenges, hopefully, sometime soon “non-profit” hospitals utilizing this tactic will recognize its unconscionable practice against accident victims and will return to filing medical charges with accident victims’ health insurance carriers. Call us today for a free consultation about Hospital Liens. 251 433-7766. Or email and make sure to put “Hospital Lien?” in the subject line.   REQUIRED DISCLAIMERS: Alabama Rule of Professional Conduct 7.2: No representation is made that the quality of legal service to be performed is greater than the services provided by other lawyers. The Mississippi Supreme Court advises that a decision on legal services is important and should not be based solely on advertisements. Free background information is available upon request to a Mississippi attorney. The listing of any area of practice by a Mississippi attorney does not indicate any certification of expertise therein. See Mississippi Rules of Professional Conduct Rule 7.2(d), Rule 7.4(a), Rule 7.6(a) (1997). General Disclaimer: This information is posted for general information purposes to help those interested parties or persons with potential civil claims better understand their rights and potential causes of action. If readers are currently represented by an attorney on the subject matter of this post then they are encouraged to continue with said representation. No attorney-client relationship is established by this post.