How Medical Liens Work in Arizona Personal Injury Cases

After a slip and fall, car crash, or another type of accident, you will likely need medical treatment for any injuries you sustained. Unfortunately, you may not be able to return to work to earn a living to pay for the treatment you need. A healthcare provider may file a medical lien, while health insurance companies typically assert reimbursement or subrogation rights. The lien allows these entities to claim a portion of the damages you receive from your personal injury case to pay the money you owe.

Medical liens can greatly reduce the compensation you obtain in an Arizona personal injury claim. In order to be valid, medical liens filed by healthcare providers must comply with specific statutory requirements. Our Arizona personal injury lawyers can answer your questions and make sure that your rights are respected.

Understanding medical liens

Legally, a lien is a claim someone else files against your estate to ensure you repay a debt you owe. Most people have heard of banks placing liens on customers’ homes when they have not paid their mortgage. Medical liens follow the same principle.

Medical liens in Arizona personal injury cases are statutory claims filed by licensed healthcare providers or hospitals. Health insurance companies generally assert reimbursement or subrogation rights. Until the lien is resolved, it attaches to your personal injury claim or any resulting settlement or judgment. The only way to resolve the lien is by paying the debt or negotiating an agreement with the person or entity that filed the lien.

If you are injured in a car accident and are successful with your settlement or trial award, the entity that filed the lien against your estate may have the right to a portion of the damages awarded before you receive the remaining compensation.

The law on medical liens in Arizona

Under state law in Arizona, licensed healthcare providers can place a lien on a patient’s personal injury award or settlement. There are certain laws healthcare providers must follow in order for medical liens to be effective. These include:

• Recording requirement: Medical liens must be recorded within 30 days of the patient receiving services from an individual provider or within 30 days of a patient being discharged from a hospital. If a lien is not recorded within these timeframes, a provider may still perfect the lien before settlement or judgment, subject to statutory notice requirements.
• Exemptions: In 2022, legislators passed Arizona Senate Bill 1021, which was enacted as Chapter 340. The law focuses on the limitations of healthcare liens and establishes that liens cannot be filed against MedPay, UIM, or UM coverage. The law generally exempts the first $20,000 of a third-party recovery from medical liens, subject to specific statutory exceptions.
• Customary charges: Medical liens are restricted to ‘customary charges.’ This means healthcare providers must not record a lien with an amount that is higher than they would accept from other payers, including health insurance companies.
• Network requirements: If a healthcare provider has a contract with a patient’s healthcare insurance provider, the contract must explicitly allow for medical liens. If a contract does not clearly state this, the lien is invalid.

Federal law vs. state law

Hospitals in Arizona have contracts with the Arizona Health Care Cost Containment System (AHCCCS), the Medicaid agency in the state. These contracts stipulate that hospitals will accept payments from AHCCCS on behalf of patients who have received treatment. Under federal law, hospitals must view payments from AHCCCS as full, even if the facility otherwise charges a higher rate.

Sometimes, hospitals place medical liens on patients’ personal injury awards when AHCCCS has already provided payment for the services provided. Hospitals do this to recover the balance between AHCCCS’s payment and the typical charge for the hospital. This is a practice known as balance billing, and it is illegal when dealing with Medicaid.

The Arizona Court of Appeals published its decision regarding the case Ansley v. Banner Health, and it confirmed that balance billing is against the law. In this case, a number of patients sued Banner Health for placing liens on their personal injury recoveries because AHCCCS had already provided payment. The Arizona Court of Appeals found in favor of the patients, and in 2020, the Arizona Supreme Court confirmed the decision.

How to negotiate a medical lien on a personal injury award

Many people do not consider negotiating a medical lien on a personal injury settlement or verdict award. However, negotiating a medical lien is possible and can allow you to keep more of the damages you receive. It is always advised to contact an Arizona personal injury lawyer who can negotiate on your behalf, as medical liens are complex.

Before entering into negotiations, carefully review your medical bills to identify any errors. Healthcare providers sometimes double charge for services, unintentionally or otherwise. Reviewing any bill you have received can help you identify these accounting errors and potentially any others.

It is also important to question whether the services you received were necessary. Insurance companies and healthcare providers may charge for unnecessary treatments in order to increase your medical expenses. If you can show that certain treatments were unnecessary, such as obtaining testimony from a medical expert, this can also reduce a medical lien.

Time limits on medical liens

Healthcare facilities and individual healthcare providers must file medical liens within a certain amount of time. Individual providers have just 30 days from the date a patient received treatment to file a medical lien. Hospitals, on the other hand, must file a medical lien within 30 days of a patient’s discharge date. If a medical lien is not filed within the specific timeframe, the lien may be dismissed, and you can keep more of your personal injury damages.

There are specific statutory requirements for the content of the medical lien that the hospital files. Those requirements are found in A.R.S. 33-932(B). Recently, the Arizona Court of Appeals discharged a lien for more than a million dollars for failing to satisfy those requirements. That case is likely to be appealed to the Supreme Court and we will publish an update if and when the Supreme Court makes its ruling.

How can an Arizona personal injury lawyer help with medical liens?

There are a number of ways in which an Arizona personal injury lawyer can help with medical liens. These include:

• Reviewing, disputing, and challenging medical liens that do not comply with the law and are therefore invalid.
• Negotiating with healthcare providers to reduce the total amount of a lien.
• Manage a medical lien before paying out your settlement or verdict award, so you avoid future legal issues.

Our personal injury lawyer in Arizona can help with your lien

Personal injury settlements and verdict awards are meant to ease your financial burden after an accident. Medical liens, unfortunately, can cause even more financial stress. Our Arizona personal injury lawyers at Verderame Law Group Arizona Injury Lawyers can answer your questions, reduce the total lien amount, or advise on whether you can avoid one altogether. Call us now or contact us online to schedule a consultation and to get the legal help you need.