What is a Hospital Lien, Anyway?

A trip to the hospital is never fun, especially if you are there to receive treatment for an injury caused by someone else’s negligence. Adding to the pain of your personal injury could be the threat of lost wages if you are unable to work, and long-term medical problems that could affect the rest of your life. A personal injury lawsuit could help you get compensation for these things, but if the hospital is able to file a medical lien against you, the money you receive from your case could be next to nothing.

What is a Hospital Lien?

A hospital lien is one way a hospital can attempt to get payment for any treatment you may receive after an accident. Instead of seeking payment directly from you or your insurance agency, the hospital will place a claim on any settlements you might receive from a personal injury case and collect their payment that way. Essentially, this means that they will take a portion of the payout you and your lawyers fought for before it ever gets to you.

Liens usually only apply if you go to the hospital to be treated for injuries caused by someone else – it is unlikely that you would file a lawsuit against your own front lawn if you tripped over a rake you left lying in the grass and broke your ankle, so there would be no benefit for a hospital to file a lien to cover those medical bills.

A common problem that many have faced in the past is that hospitals would neglect charging insurance companies for treatment in cases that were obviously going to go to court, and would instead just file a lien right away. Added to this was the problem that hospitals often charged more for care when they filed a lien than when they were paid by insurance companies or individuals.

What Does This Mean for Colorado Residents?

Luckily, the State of Colorado recently passed new legislation that places strict conditions on hospitals that want to file a medical lien. The bill, which was approved in May of 2015, says that the hospital must first try to get payment from you or your health insurance before they can think of filing a lien. This means that even if they suspect you will be getting a big payout from your lawsuit, they have to follow traditional channels first before they try to get a chunk of that injury settlement money.

Essentially, Colorado hospitals now have to follow the same billing procedure every time you go in for treatment. Whether you sustained a serious brain injury as a result of someone else’s negligence, or you broke your ankle tripping over your own rake in your own yard, your insurance company must be billed first. A hospital lien can be created only if you and/or your insurance company cannot or will not pay for your treatment.

With more than 30 years of experience, our Colorado personal injury law firm can help you with any questions you have about hospitals liens or personal injury cases.

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