During your morning commute down I-575 during a typical rush hour, traffic ahead slows to a stop in order to read the all-important message displayed on the overhead sign approaching Highway 92. You stop right along with traffic, learning that it will take you 35 minutes to reach I-75. At that moment, Mayhem, driving behind you, is updating his social media status and crashes into the rear of your car. You’re hurt.
You find yourself in the back of an ambulance, on the way to the ER of a local hospital. Lucky for you, traffic moves out of the way for you in your new ride. You are checked into the ER where you receive X-rays, CT scans, pain medication and discharge papers. But there is one thing you did not receive. A bill.
Fortunately, over the next few weeks you feel ok considering the wreck you were just in. You imagine “the other guy’s car insurance must be paying my hospital bill.” Then you receive a letter that makes no sense. The Hospital is about to file lien for the treatment you received in the ER. What?!
Georgia law allows hospitals to file a lien against your cause of action when you receive treatment for injuries caused by another person’s negligence. This is not a lien in the traditional sense; meaning this lien does not attach to your home or any of your personal property. Rather, this lien attaches to your personal injury claim against the person who hit you. Often times, hospitals prefer to file such a lien against your claim as opposed to submitting your bill to your health insurance. This is because health insurance companies have contracts with hospitals that dictate how much the hospital will be paid for an emergency room visit. Unlike individuals, health insurance companies have bargaining power with the hospitals to negotiate a more “reasonable” rate for emergency treatment. Rather than accepting the negotiated rate from the health insurer, the hospital prefers to file their lien for the “full amount” of the bill. For instance, if your total bill is $30,000.00, the contract between the hospital and your health insurer may require the hospital to accept $15,000.00 as full payment. Obviously, the hospital would rather bypass your health insurance and take the full $30,000.00 from you.
Unfortunately for the injured person, the consequences of this practice can be financially devastating. Hospitals have 75 days from the date of discharge to file their lien. The lien must be filed in the records office of the superior court for the county in which you live. However, filing a lien does not stop the hospital from attempting to collect its bill. While you were at home recovering from your injuries, thinking that your ER bill has been paid, the hospital hired attorneys to file its lien against your claim. Oh, and by the way, your bill is now 60 days past due. That’s right, you have been sent to collections.
At this point you may be asking yourself “what is this lien and how does it work?” Since the lien is attached to your personal injury claim, your claim cannot be resolved without also satisfying the lien. In other words, much like you cannot sell your house without satisfying the lienholder (your mortgage), you cannot settle your personal injury claim against the person who hurt you without satisfying the hospital bill. These liens can pose countless problems for the injured person. Going back to our hypothetical $30,000.00 hospital bill, imagine that the at fault driver only has $25,000.00 in liability insurance. In this scenario, the hospital will take your entire settlement from the other person’s insurance company….and you would still owe the hospital $5,000.00! That hardly seems fair when you did not do anything wrong. Furthermore, what if you do not want to pursue a personal injury claim against the at-fault driver? In that case, you are now personally responsible for the entire $30,000.00 bill.
If you find yourself in the ER because someone crashed into you, insist that the hospital take your health insurance information. Clients tell us that hospital personnel often insist “you don’t want this bill going on your health insurance do you? Let’s just send the bill to the other driver’s car insurance.” Do not go along. Insist they submit your bill to your health insurer. If you forget, ask for a copy of the bill once it is ready. Most health insurance plans allow you up to 12 months to manually submit a bill for payment. But keep in mind that the hospital will file the lien within 75 days of your discharge. Understand, though, that the hospital may still file a lien for the difference between your “total bill” and the amount your health insurer paid. However, the hospital cannot bill you for that balance, meaning it should not show as a “debt” on your credit report. The best way to deal with hospital liens is to avoid them altogether. Hiring an experienced personal injury attorney early on in the process can help mitigate the impact a hospital can have on your claim.