Alabama's Hospital Lien Law - Three Things to Do

What do I do if a hospital files a lien against me?

Victims of car crashes are often shocked to receive a notice in the mail that a hospital lien has been filed against them for the medical treatment they received after the wreck.

Alabama law allows hospitals to file a lien when an injured person receives emergency medical treatment within 1 week of sustaining their injuries. This lien only applies to “actions, claims, counterclaims, demands, judgments, settlements, or settlement agreements” that the injured person has against the person or company responsible for causing the injury.

If you receive a notice that you have had a hospital lien filed against you, here are 3 important steps to take:

1. Provide your Health Insurance Information

If you have health insurance, make sure that the hospital has your health insurance information and submits its bill through your health insurance company. In emergency situations, hospitals often fail to obtain a patient’s full health insurance information and proceed to file a hospital lien in order to preserve their claim for payment.

If the hospital is made aware that you have a health insurance policy, then the hospital is required to submit its bill to your health insurance company. Your health insurance company will often pay the hospital a reduced rate for the services it provided, whereas a hospital lien reflects the hospital’s full, undiscounted rate that it charges for treatment.

If you are insured through Medicare or Medicaid only, then the hospital may not be required to bill or accept payment through Medicare or Medicaid and can instead choose to perfect its hospital lien. See Joiner v. Medical Center East, Inc. , 709 So.2d 1209 (Ala. 1988); Alabama Medicaid Agency Administrative Code 560-X-1-.07(03).

2. Hire an Attorney

If you are injured in an accident and required medical treatment that resulted in a lien, it is a good idea to hire an experienced personal injury attorney to represent you in pursuing any claims you may have against the at-fault person or company. Experienced attorneys should be able to persuade the hospital or a judge that the hospital lien should be substantially reduced. If you or your attorney win or settle your injury case without first satisfying the hospital lien, then the hospital may file a lawsuit against you for the full lien amount, plus court costs and attorney’s fees.

3. Look at your Car Insurance for Med-Pay Coverage

Even if you do not have health insurance to help you pay your medical bills, you may still have a form of coverage under your car insurance known as Medical Payments coverage or Med-Pay. Med-Pay coverage covers injured drivers and their passengers for any medical expenses they incur due to a car accident. Most Med-Pay policies will pay up to a limit of $1,000 to $5,000, although you can purchase policies with higher limits. Your attorney can recommend how this Med-Pay coverage should be used, including in negotiating and paying off a hospital lien.

Other Resources:

The Alabama Hospital Lien law can be found at Code of Alabama § 35-11-370 et seq. (1975).