Three Ways to Attack a Hospital Lien on Your Personal Injury Case – by Columbus, Ga Lawyer Mark Jones
Introduction on Hospital Liens in Georgia
You have just been in a major motor vehicle wreck. You may or may not have health insurance. You go to the hospital after the wreck. You get out. You go home and about 1-4 weeks later, you receive a certified letter from whatever medical center you went to for treatment stating that they have a “lien” for $40,000.00 on any insurance proceeds in your automobile wreck case! Congratulations! You have just encountered Georgia’s hospital lien statute! Hospital liens stink.
They are basically the hospital seeking part of your settlement. You see, hospitals are going broke throughout the state. So, they have to find creative ways to generate revenue. One way that hospitals have developed to obtain revenue is through the vigorous prosecution of hospital liens!
So What is a Hospital Lien?
OCGA 44-14-470, permits a Georgia hospital to file a “lien” on your personal injury settlement or judgment for the reasonable charges of its medical services rendered in treating you for your automobile accident injuries. The statute sets out the procedures to perfect a lien so that the hospital lien is enforceable on your car wreck settlement. See OCGA 44-14-471. The lien is not a debt per se.
The hospital is not putting the lien on your house like the government does with a tax lien. Rather, the lien is simply a way for the hospital to protect its reimbursement interests with the liability company for the person that hit you in the auto wreck. The lien also applies to uninsured motorist proceeds. So what are some ways to attack a hospital lien?
Ways to Attack the Lien
(1) Inspect the Paperwork!
Your attorney should be well-versed in the hospital line statute and the current case law and should insist on strict compliance with the statutory and case law. The lien law is codified in OCGA 44-14-470 – OCGA 44-14-474.
Cases are routinely being handed down on the hospital lien statute because these liens are constantly being litigated as hospitals throughout Georgia try to increase their revenue, to the detriment of the injured person who actually suffered physical and financial harm. Proper adherence to the statute is necessary for an enforceable lien.
In this regard, if the hospital does not strictly comply with the statutory law for perfecting the lien, your lawyer should attack the lien as invalid. This perfection procedure should be strictly complied with since lien laws are in derogation of Georgia’s common law, which does not permit subrogation. See Integon Indem. Corp. v. Henry Med. Ctr., 508 S.E.2d 476, 235 Ga. App. 97 (Ga. App., 1998) (Beasley, J.) (“lien laws and procedures are in derogation of the common law, they must be construed strictly against the creditor and in favor of the debtor”) abrogated on other grounds; see also OCGA 33-24-56.1 (codifying Georgia’s anti-subrogation policy).
(2) Attack the Reasonableness of the Charges!
Everyone knows that hospitals do a great service to the community. They save lives. There’s no doubt about that. But, everyone who has ever visited an emergency room without insurance knows that hospitals charge inflated prices on their bills.
I mean, they really stick it to the uninsured. Your lawyer should carefully examine the hospital bill. Is the emergency room charging this as a level 4 emergency where the patient simply walked into the emergency room? (A level 4 ER visit is just below a level 5 visit, which is where someone is life-flighted to the emergency room). How much is the hospital charging for x-rays?
How much are they charging for purely diagnostic testing versus actual triage treatment? What percentage of the bill is for diagnostic tests that are almost always negative? Your attorney must have experience in really examining these bills, which requires experience in medical billing codes and procedures. You get that only from time spent review countless emergency room bills!
(3) In Case of Emergency, Break Glass!
A final method for attacking a hospital lien is OCGA 9-11-22, the statutory interpleader or the common law counterpart called equitable interpleader. This is akin to going nuclear and hitting that big red button with the sign that says, “do not press.”
If your attorney has received settlement funds or an offer to tender policy limits, and the hospital is being unreasonable in asserting its lien, your lawyer may want to consider the interpleader device. Basically, this is a way to place disputed funds into a court’s registry for the court to decide who has the best claim to the funds. Your lawyer will have the most superior claim immediately via his attorney’s lien. OCGA 44-14-470 specifically makes an attorney’s lien superior to a hospital lien. See also, Ramsey v. Sumner, 438 S.E.2d 676, 211 Ga.App. 202 (Ga. App., 1993) (where settlement funds insufficient to satisfy both hospital lien and attorney’s lien, attorney’s lien wins).
Further, anytime subrogation is involved, the equitable common-fund doctrine should require a reduction of the lien amount to share pro-rata in the recovery. Unfortunately, in Georgia, there is some rather shocking dicta in certain cases, e.g., Watts v. Promina Gwinnett Health System, 242 Ga.App. 377, 530 S.E.2d 14 (Ga. App., 2000), that suggests the common-fund doctrine does not apply to reduce hospital liens pro-rata by the fee you have to pay your lawyer.
The common-fund doctrine simply says that, “a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney’s fee from the fund as a whole …” Boeing Company v. Van Gemert, 444 U.S. 472 (1980) (citing Central Railroad & Banking Co. v. Pettus, 113 U.S. 116, 5 S.Ct. 387, 28 L.Ed. 915 (1885)).
This means that the hospital cannot be a freeloader and ride the coattails of your attorney without paying it’s fair share of the costs of procuring your settlement or judgment. Note that the common-fund doctrine would not apply where the hospital’s attorneys have engaged in substantive participation in the litigation.
However, this is quite rare and merely filing a piece of paper or “lien” with the Clerk of Superior Court should not bar application of the common fund doctrine. See generally, GEICO v. Capulli, 859 So.2d 1115, 1119-1120 (Ala. Civ. App. 2002) (discussing the “active-participation” exception to the common-fund reduction).
Hopefully, the Court of Appeals and Supreme Court will revisit the application of the common-fund doctrine in light of recent appellate decisions that suggest the hospital lien codified in OCGA 44-14-470 is no different that traditional equitable, “shoe-stepping” subrogation. See, e.g., MCG Health, Inc. v. Kight (Ga. App., 2013) (“In short, the lien allows the hospital to step into the shoes of the [injured person] for purposes of receiving payment from the [tortfeasor or the] tortfeasor’s insurance company for economic damages represented by the hospital bill.”).
If that is the case, and the hospital lien is nothing more than shoe-stepping subrogation, then the common-fund doctrine must apply, and a hospital must reduce its hospital lien to share pro-rata in the attorney’s fee you pay to your lawyer in your personal injury case.
If you have received a hospital lien on your personal injury case, please call lawyer Mark Jones today for a free consultation! Mark eats, breathes, and sleeps subrogation, and he will fight for you in your case! Call Mark now at 706-225-2555!
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