Indiana Hospital Lien Statute & How it Affects Personal Injury Claims

Hospitals throughout Indiana save countless lives every day. But saving those lives costs money, and hospitals want to ensure that they are paid for the services they provide.

In many cases, hospitals rely on patients’ health insurance policies to pay for part or all of the bills issued for the treatment provided. When patients are hurt through no fault of their own and are eligible to file personal injury claims, their health insurance providers may file subrogation claims, which means they’re entitled to some of the money their patients receive if they win their claims after paying their hospital bills through their insurance.

Hospitals may do the same thing when they know patients were harmed or hurt because of someone else’s negligence through a process called a medical lien. These liens allow hospitals to continue providing care to patients, especially patients who don’t have health insurance, under the assumption that they will eventually be paid once those patients receive settlements either from the insurance company of the at-fault party directly or in court.

Hospital Lien Laws Changed in 2013

In 2013, the Indiana legislature amended the Indiana Hospital Lien Statute, some of which favor personal injury and car accident victims.

  • Liens may not be filed against a person who is also receiving Medicare or Medicaid benefits.
  • The lien must be reduced by the amounts the amount of benefits the patient is entitled to under a health insurance plan (e.g. contractual reductions, write-offs). This provision is especially important as many hospitals have recently chosen to forego payment via health insurance on patients injured in car crashes and other incidents caused by the negligence of others. This was an attempt by the hospitals to avoid the contractual reductions and write-off they agreed to with the injured person’s health insurance. This new provision requires the lien to be reduced per those benefits – even if the hospital did not pursue payment through the health insurance.
  • The lien does not apply to injury claims against a disability policy or insurance policies with medical payments coverage.
  • The hospital may not pursue collection of the amounts owed under the lien until the injury claim has been fully resolved.
  • If the hospital agrees to accept less than its full lien amount, it may not collect the compromised amount from the patient or his representative. They waive the balance owed.
  • The time period to file and perfect a lien is shortened from 180 days to 90 days after the date a patient is discharged.
  • When a hospital lien has been paid and it fails to release its lien within 15 days, the daily fine was increased from $10 to $25.

The changes to the Hospital Lien Statute took effect on July 1, 2013.

What Happens if You Don’t Pay Your Hospital Lien?

First, it’s important to find out if you’ve had a lien placed on you by the hospital that treated you. Typically, you’ll receive notification in the mail shortly after your discharge. If you received a lien, it’s important to tell your lawyer, especially in the early stages of your claim.

If you don’t pay your lien, the hospital will make every effort to collect it from you, just as it would a normal bill. However, as noted above in the law change effective July 1, 2013, the hospital won’t be able to pursue any payments from you until after your injury claim settles. That means that you won’t have to worry about any collection attempts while your settlement is in process. In addition, that delay can give you time to re-negotiate your bills.

Medical bills aren’t always fair or accurate, and that means you may end up having a lien placed on you that’s far too expensive for the treatments you received or the settlement you may win. Our lawyers can review your medical lien and your medical bills to determine if they’re accurate and fair, and we can negotiate them alongside your settlement from the insurance company.

Our Lawyers Can Help You Navigate This Complicated Process

Hospital liens are a common part of the personal injury process, but many victims are unaware of them or are caught by surprise when they receive notification of one.

At Wagner Reese, our lawyers have successfully helped many personal injury victims throughout Indiana who have been subject to hospital liens, and we’re up to date on all the laws concerning them. Between the insurance company and the hospital both wanting outcomes that may not be in your best interest financially, it’s extremely important that you contact a lawyer right away after your injury. We’ll begin protecting your rights and building a strong claim for you the day you call. Get in touch with us today for a free consultation.