Arizona has a new law that will impact most people who visit the hospital after a car accident or have another type of personal injury case.  This is one area of law that has been confusing and counterintuitive for most people involved in a personal injury case. The changes to the new law does not apply to all cases. This impacts those with in-network health insurance who were injured in an accident that was caused by someone else.  

The new law, Arizona Revised Statutes § 33-931 to § 33-937, was effective in September 2022, but only applies to medical services provided after January 1, 2023. This law provides some clarification on this area of law because this issue has been hotly contested and litigated for years. In the past, the hospital's claimed virtually unfettered ability to assert balance-billing liens against patients that were involved in personal injury cases and patients and their attorneys' fought back, asserting that the hospital had no right to assert liens when they were not owed a patient responsibility and had been paid by health plans.

The law confirms that these liens do not apply to medical payment coverage on a person's own auto insurance policy.

This new law allows the hospitals the ability to record and assert liens in situations where there is in-network health insurance coverage and provider's managed care contract specifically authorize balance billing. In these instances, one-third of any third-party judgment, settlement or award is exempt from any lien or assignment authorized by this section.

Also, the new law ends the confusion about which factors must be considered when attempting to compromise these claims. A.R.S. § 33-937 says that the lien “shall” be compromised pursuant to the these factors:

1. The nature and extent of the patient's injury or illness.

2. The sufficiency of liability insurance or other sources of indemnity available to the patient from the tortfeasor or the tortfeasor's insurer. The potential availability of health insurance or a similar medical benefit plan that covers the patient as an insured or dependent may not be considered as a factor in any compromise, if the patient and the health care provider have agreed not to use that health insurance or similar medical benefit plan coverage.

3. Whether the health care provider, the hospital or an assignee has received any payment reducing the patient's financial obligation to pay the lien balance.

4. The nature and complexity of the services rendered by the health care provider to the patient.

5. The health care provider's customary charges for the services rendered to the patient.

6. The total amount of the third-party judgment, settlement or award.

7. Other valid liens made pursuant to section 33-931 that are attached to any third-party judgment, settlement or award and the priority position of the liens.

8. The patient's attorney fees and costs.

9. Any reductions agreed to by any other claimants to the total amount of the third-party judgment, settlement or award.

10. Other valid claims against the third-party judgment, settlement or award, including health insurance reimbursement and subrogation claims.

11. Any other factor relevant to a fair and equitable settlement under the circumstances of that particular case.

There are many situations to which this new law does not apply, such as Medicaid/AHCCCS patients, Medicare patients, Workers' Compensation cases, patients without health insurance, and situations where patients voluntarily sign a consensual lien or agreement because they lack health insurance coverage. This new statute has provided more clarity for injured people and their lawyers, but there still is a high degree of complexity in this area and most people will still need legal help to navigate this mine field.