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Health Law
Update
February 2010 hawleytroxell.com
MEDICAL LIENS UNDER IDAHO LAW 

By Kim C. Stanger
Hawley Troxell Ennis & Hawley LLP
(208) 388-4843
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In these challenging economic times, Idaho's medical lien statutes provide important means for health care providers to collect charges for certain types of care; however, the lien statute is limited in scope and must be strictly followed to receive its benefits.
 
Scope of Medical Lien.  Idaho's lien statutes allow hospitals (Idaho Code §§ 45-701 et seq,), nursing care providers (id. at § 45-704A), and other entities licensed to practice medicine (id. at § 45-704B), to file a lien "for the reasonable charges for ... care, treatment and maintenance of an injured person, ... or to the legal representative of such person, on account of injuries" caused by another person.  (Id. at § 45-701).  Importantly, the lien statutes do not apply to charges for care rendered to all patients; instead, they only apply to charges for care rendered to patients who were injured through the actions of another person.  Also, the statutes do not allow the health care provider to file or enforce a lien against the patient's personal or real property; instead, the lien gives the health care provider a right to recover against the entity causing the patient's injuries and/or to be paid from any personal injury settlement due the patient.  In essence, the statutes allow health care providers to assert their claims for payment against the person responsible for causing the patient's injuries.  Finally, the lien does not apply to accidents or injuries that are covered by workers compensation.  (Id. at § 45-705).
 
Perfecting the Lien.  To perfect the lien (i.e., to make it enforceable), the health care provider must do the following:
 
1. File the Claim of Lien.  Within ninety (90) days of discharge or the last date services were rendered for the injury, the health care provider must file a verified statement (e.g., a "Claim of Lien") in the county recorder's office for the county where the hospital or nursing facility is located or the health care provider rendered their services.  The Claim of Lien must contain the following information:
 
q The name and address of the patient as it appears on the health care provider's records.
q The name and address of the health care provider.  
q The name and address of the representative of the health care provider who is filing the statement.
q The dates of admission and discharge or services rendered to the patient.
q The amount claimed to be due for the patient's care.
q To the best of the health care provider's knowledge, the names and addresses of all entities claimed by the patient to be liable for damages arising from the patient's injuries.  In addition to the liable party's information, it is fairly common to include the name of the liable party's insurance carrier, if known.
 
(Id. at § 45-702; see also §§ 45-704A and 45-704B).
 
2. Give Notice of the Claim of Lien.
  Within one (1) day after filing the Claim of Lien, the health care provider must mail copies of the Claim of Lien, postage prepaid, to the persons who are claimed to be liable for the injuries.  The Claim of Lien must be mailed to the address contained in the Claim of Lien.  (Id. at § 45-702; see also §§ 45-704A and 45-704B).  Although not required, the health care provider should also mail a copy of the Claim of Lien to the liable party's insurer and lawyer, if known, to ensure they have notice of the lien and will allow for it in any settlement or payment.
 
Once filed, the Claim of Lien is deemed to provide notice of the lien to all persons who are liable for the patient's injuries whether the liable party is named in the Claim of Lien or not.  The county recorder is charged with recording the Claim of Lien in the county records.  (Id. at § 45-703).
 
Enforcing the Lien.  Once the Claim of Lien is properly filed, the health care provider has a claim against the liable party (not the patient) for the amount of the lien against any money that the liable party may owe the patient for the injuries.  If the patient sues or otherwise asserts claims against the liable party, the liable party and/or his insurer must ensure that the health care provider is paid from any settlement or judgment proceeds and/or obtain the health care provider's release as part of the settlement with the patient.  If they do not, or if the patient declines to pursue his claims against the liable party, the health care provider may sue the liable party to recover the amount of its lien plus costs and attorneys' fees in pursuing the lien.  See St. Alphonsus Reg. Med. Ctr. v. Bannon, 128 Idaho 45, 44 (1995).  No release, waiver, or judgment by the injured patient is effective against the health care provider unless the health care provider joins in or executes a release of its lien; accordingly, the health care provider may collect against the liable party even if the liable party has already paid the patient.  The health care provider has two years from the time the Claim of Lien was filed to bring a suit to enforce the lien.  (Id. at § 45-704).
 
Patient's Efforts to Reduce Lien Amount.  Sometimes, the patient or their lawyer will try to convince the health care provider to pay the lawyer or reduce its lien amount by one-third or more to compensate the patient or lawyer for his or her time and effort in recovering the settlement or payment from the liable party, which recovery benefits the health care provider by creating a "common fund" from which the lien may be collected.  However, the Idaho Supreme Court has expressly held that this "common fund doctrine" does not apply to medical liens, and therefore, the health care provider is not required to agree to such demands.  White v. St. Alphonsus Reg. Med. Ctr., 136 Idaho 238, 242-44 (2001).  Similarly, if the patient is a participant in a third party payor program that limits the amount of fees a provider may charge to participants in the program, a patient's lawyer will sometimes argue that the health care provider's lien cannot exceed the contractual amount under the payor program.  However, the health care provider's lien and resulting claim is against the liable party, not against the patient or the patient's payor program.  Absent an express agreement or an Idaho court decision to the contrary, the health care provider is not required to reduce its lien amount to match contractual adjustments.
 
Patient Remains Liable.  Although the medical lien does not apply to the patient's property, the lien statute does not absolve the patient of ultimate responsibility for the cost of the care rendered.  The health care provider retains its right to collect for the services from the patient or their insurer; however, by doing so, the health care provider may be bound by contractual adjustments that might not otherwise apply if the provider pursues its lien against the liable party.
 
Other Liens.  In those cases where the medical lien statutes do not apply (e.g., if there is no personal injury claim involved), health care providers may still obtain a judgment or consensual lien.  
 
1. Judgment Lien.  If the patient fails to pay amounts due, the health care provider may sue the patient for breach of contract and unjust enrichment.  If the claim is worth less than $5000, the provider may file a small claims court action.  If the provider prevails, the provider may obtain a judgment lien which can be used to execute against the patient's property or garnish the patient's financial accounts or paychecks.  The provider may also be able to recover its reasonable costs and attorneys fees in some cases.
 
2. Stipulated Judgment and Covenant Not to Execute.  As an alternative to a full-blown lawsuit against the patient, the health care provider and patient may agree that the patient will stipulate to a judgment for the amount due, but the provider will sign a covenant not to execute on the judgment so long as the patient makes payments according to terms agreed by the parties.  The benefit to this process is that it allows the provider to obtain an expedited, stipulated judgment against the patient upon which the provider may execute if the patient fails to comply with payment terms without having to go through the process of a full-blown lawsuit.  
 
3. Consensual Lien.  In lieu of judicial liens, the health care provider may require that the patient execute a promissory note secured by a deed of trust or other form of security that allows the provider to foreclose the security interest if the patient fails to pay the debt.  This gives the provider a source for payment without having to pursue formal litigation to obtain a judgment.
 
If you have questions about these or other health law issues or would like a sample Claim of Lien under Idaho's medical lien statute, please contact me or another member of our firm.
This Health Law Update is provided by Hawley Troxell Ennis & Hawley LLP for educational and information purposes only. It is intended to notify our clients and friends of certain events or issues in healthcare law. It is not intended to be, nor should it be, used as a substitute for specific legal advice regarding specific factual circumstances. ©HawleyTroxell all rights reserved. To view past client updates, please visit our website, hawleytroxell.com.

 

Health Law Group: 

Kim C. Stanger, Chair
Thomas B. Bassler
Steven W. Berenter
Howard D. Burnett
Thomas B. Chandler
Ramona Johns
Joseph D. McCollum, Jr.
Thomas J. Mortell

 

Additional Firm Practice Areas: 

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Construction
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Taxation
Litigation

 

Upcoming Workshops & Events: 

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February 16, 2010
Kim C. Stanger
"New HIPAA Regulations and Other Legal Updates"
Idaho Medical Group Manager's Association
 
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February 23, 2010
Kim C. Stanger
"New HITECH-HIPAA Regulations"
Idaho Hospital Association
 
_________________

February 24, 2010
Kim C. Stanger
"New HITECH-HIPAA Regulations"
Idaho Medical Association
 
_________________

March 31, 2010
Kim C. Stanger
"Updating Medical Staff Bylaws"
Idaho Hospital Association
 
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April 28, 2010
Kim C. Stanger
"Mental Holds"
Idaho Hospital Association
 
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May 26, 2010
Kim C. Stanger
"Medical Consents"
Idaho Hospital Association