If you have health insurance, Medicaid or Medicare and you go to a hospital in your insurer’s network for treatment, the hospital is required to submit the treatment bills to your health insurer, Medicaid or Medicare. You may have to pay a deductible, co-pay or co-insurance percentage, but the hospital does not send you a bill for the entire charged amount. This holds true, unless that hospital’s treatment is for personal injuries caused by another person’s negligence, such as a car crash.
It is often surprising and dismaying to injury victims – who have paid premiums to auto insurance for medical payments coverage and for health insurance – that shortly after discharge from the hospital they get notice of a lien for a huge dollar amount. Welcome to the little-known Hospital Lien statute, Wis. Stat. § 779.80:
(1) Every corporation, association or other organization operating as a charitable institution and maintaining a hospital in this state shall have a lien for services rendered, by way of treatment, care or maintenance, to any person who has sustained personal injuries as a result of the negligence, wrongful act or any tort of any other person.
(2) Such lien shall attach to any and all rights of action, suits, claims, demands and upon any judgment, award or determination, and upon the proceeds of any settlement which such injured person, or legal representatives might have against any such other person for damages on account of such injuries, for the amount of the reasonable and necessary charges of such hospital.
Hospital liens create significant complications for an injury victim’s case. First, the lien is for 100% of the total charged amount of the treatment; there are no contracted discounts that you often see with health insurance, Medicaid and Medicare. Second, since the hospital is not an insurance company, the lien is not subject to Wisconsin’s Made Whole or Common Fund doctrines, both of which serve to reduce the amount paid back to health insurers out of an injury settlement or judgment. Third, it does not matter if you have health insurance, Medicaid, or Medicare that would pay for the treatment; the hospital can bypass them and still put a lien on your personal injury settlement or judgment.
Because hospital liens can potentially eat up a significant amount, if not all, of a personal injury settlement, it is crucial that injury victims get an attorney as soon as possible. For a hospital lien to be effective, there are several statutory and notice requirements that the hospital must comply with within certain time limits; an attorney can evaluate whether all these requirements have been properly complied with. Also, an attorney can communicate with the hospital about the possible limitations for settlement or judgment and reach agreement with the hospital for a dollar amount less than the lien amount, or convince them that, based on the limited funds available, the hospital is better off submitting the bills to health insurance, Medicaid or Medicare.
Hospital liens serve as another reminder of why it is so important to obtain a competent attorney after an injury. If you or someone you know has been injured and are facing a hospital lien, feel free to contact one of our personal injury attorneys at Anderson O’Brien, LLP.
