Most injury victims are shocked when they learn that the hospital has recorded a lien with the county recorder after they received treatment due to an accident, crash or other incident that may be the fault of a third party. Arizona has unique, and some would say harsh laws that pertain to these liens. Basically, the hospital is making a claim on the injury settlement and is seeking the difference between their total bill and what was received by insurance payments and patient responsibility payments. This type of hospital lien is sometimes referred to as a "balance billing." However, this seems unfair and strictly speaking, balance billing is unlawful in Arizona. pursuant to A.R.S. § 20-1072(F), which prohibits the hospital from collecting more from the patient than it contracted to accept from the health insurance plan. The hospitals made an end run around this law and purports to make a claim on the "third party claim" only and pretends that this is not collecting from their patient. Unfortunately, the Arizona courts have accepted this legal fiction and have in most cases, approved of this practice.
Of course, the amount of lien reimbursement to the hospital on their lien impacts the net recovery for an injured person. Often this ends up being the case after the case. We first to get a fair settlement or judgment against the at-fault party, then we must negotiate and sometimes litigate against the hospital regarding the propriety and amount of their lien. Invariably, a large part of my job is negotiating with hospitals and other lien-holders to make sure that my clients are treated fairly and maximizing their net recovery.
Jay L. Ciulla is an attorney in Phoenix, Arizona who represents the victims of car crashes in personal injury and wrongful death cases. Please call (602) 495-0053 for a free initial consultation.