Hospital Accident Liens: Tips for Protecting What’s Rightfully Yours

Bunny couldn’t believe her eyes. She thought today’s trip to the mailbox would produce nothing more than the usual electric bill, another discount card from a retailer, and the monthly envelope from that pesky hospital. But today was different—very different. She didn’t immediately recognize the return address on one of the envelopes. It was from Acme Insurance, the insurance company of the guy who rear ended her on the highway. Her memory of being in the hospital was almost as fuzzy as her memory of the accident. But all was well now…especially today.

You see, the envelope contained a check, a check made out to her in the sum of $67,147.24. She was ecstatic to say the least. She had been eyeing that Mercedes at the dealership across the street for months. Today was the day her dream would come true. She hadn’t even opened the  previous envelopes from the hospital because, well, insurance takes care of all that, right? So, she was off to the Mercedes dealer… to make one salesperson very happy.

On the other side of town, sitting in his office, is the business office director of Bunny’s hospital. The hospital that Bunny was transported to after her accident. The one that keeps sending Bunny those pesky envelopes. His name is Kevin and today, Kevin is not happy. The phone conversation with Acme Insurance did not go well. The nice lady at Acme had just finished explaining to Kevin that, unless there is an accident lien filed, the payment goes directly to the patient and it is up to the hospital to seek reimbursement from the patient.

The sick feeling in Kevin’s stomach is justified. He knows that once the payment on an accident claim goes directly to the patient, the likelihood of getting them to pay their hospital bill is remote. He also knows that filing liens is far from simple and Bunny’s account is just one of many for Kevin’s hospital, which has the distinction of being a Trauma 1 facility on a major interstate. What is he going to do about the never ending parade of accident accounts that come through his office? Accounts worth millions in charges. Kevin ponders his options…and opens a fresh bottle of his new best friend, Pepto-Bismol.

While accident/liability claims may be a small percentage of a hospital’s total patient revenue, the benefit of filing accident/liability liens on these claims is clear: reimbursement usually goes directly to the hospital and, as a percent of charges, is exceptional—usually 90 to 100 percent. But, hope is not a good strategy for recovering charges from accident/liability claims. Plus, a good lien specialist is worth their weight in gold—or reimbursement—when it comes to the nuances of getting to the final payment.

Meet Carmen. Carmen is a lien specialist—and she weighs a lot. Well, not in pounds but in terms of the amount of reimbursement she brings in for her hospitals. Carmen has some tips for hospitals with aspiring lien specialists:

1. Don’t leave additional accounts incurred after the initial date of service off the lien. Review the system daily for new accounts associated with an accident for which a lien has already been filed. To include additional accounts on a lien that has been filed, you must amend the lien to include those accounts. You must also do so before it settles!!!
2. If a lien isn’t applicable in a situation, you may be able to file a claim (not a lien) on Medical-Payments (med-pay) insurance, PIP (in certain states), or underinsured/uninsured motorist, all coverage options available to the auto policyholder. Payment for medical bills may also be requested from the liability carrier in the event that the patient has settled his bodily injury claim before the carrier receives all medical bills. This type of reimbursement is often called “Meds Incurred.”
3. Depending on the circumstances, it may be necessary to file a med-pay claim, an underinsured motorist claim and a lien for an accident account. These claims can be filed with the insurance company for the at-fault party, the patient’s insurance company, and if the patient was a passenger in a motor vehicle, with the driver’s insurance company as well. You can also file two liens if each insurance company will only accept a percentage of liability.
4. Once the claim settles, it can be a challenge to get the settlement from the attorney or patient—even in situations where the hospital’s name is on the check. Persevere and continue to work with these entities until payment is received. In some cases, hospital counsel (or vendor counsel if liens are outsourced) should contact them for payment of the lien that was filed.
5. When the patient’s bills exceed the limits of liability, the hospital must be present at an Interpleader or risk the possibility of coming away empty handed. Remember, it is likely that many parties will have an interest in all or part of the final award. Legal representation at the Interpleader is necessary to ensure that the hospital’s interests are protected.
6. If the patient changes legal representation, the lien should be amended with the name of the new attorney of record. Therefore, it is imperative that you maintain contact with the patient and/or the patient’s attorney.

The moral of this story is that every hospital needs a Carmen—a knowledgeable, persistent and resourceful lien professional. Because like it or not, every hospital has a Bunny, or two. And because of people like Carmen, hospitals get paid, and sick stomachs are a thing of the past.