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Does a California Hospital Have the Right to Attach the Proceeds of My Settlement Instead of Billing My Health Insurance or Medicare?

Yes, but only limited rights. Hospitals have recently been aggressively pursuing collection of their entire medical bills from auto insurance liability policies rather than billing Medicare or health insurance. This poses a problem for someone who has been involved in an accident and injured because of the accident. You may have other medical needs that are not covered by health insurance, such as pharmacy, co-pay, deductibles, chiropractic and medical procedures that are only covered partially by health insurance. Also if the hospital or emergency physicians take all of the settlement money available, the injured victim receives no pain and suffering, or wage loss. This is patently unfair and improper.

Hospitals are asserting their right to recover under recently changed California law, by delivering a "Notice of Lien." California Code of Regulations, 42 CFR Section 411.50 through 411.54 provide for a lien during a "reasonable period" after notice. The "reasonable period" is interpreted as 120 days pursuant to statute.

California law was changed to allow hospitals to recoup emergency room service fees where there was no health insurance but there was a negligent third party. Claimants would typically settle their case and not pay the emergency room any money. Of course this statutory scheme has now been a subject of great abuse by local hospitals in California. Rather than billing Medicare or health insurance, now the hospitals are asserting and demanding payment of their entire bill and are looking to these sources as a revenue-generating opportunity.

A competent California auto accident attorney is going to intercede quickly to avoid a hospital seizing all the money available to you. First, the hospital must justify that their bill is customary for the services that they rendered. It should be no surprise to you that hospitals pad their bills with great expense. Therefore a careful review of the days in the hospital, the supplies used, and the charged amount is necessary.

Additionally your OC auto accident lawyer can rely upon documents from other local hospitals to prove reasonable charges and services. By comparison of the bills asserted by the emergency room and hospital to other local hospitals, we can quickly ascertain what bills are out of line and why.

If you've gone to an Orange County Hospital, there are local regulations on the amount that can be charged by a hospital for services. Additionally an Orange County auto accident lawyer will and should immediately notify the third-party defendant insurance carrier that they are not to make any payments to the hospital without permission. The attorney can then write letters to the hospital encouraging them to bill health insurance and Medicare rather than taking all the settlement.

If the hospital steadfastly refuses to cooperate, and the attorney will be instrumental in negotiating a satisfactory settlement at the end of the case. That's a settlement made me in the hospital has to completely waive its bill because it did not either comply with the billing requirements, local regulations, Medicare statutes or lien statutes.

If you've been involved in an accident and now have a hospital asserting recovery against the third-party insurance do not hesitate. You need an attorney to act on your behalf and make sure that the hospital does not rob you of potential recovery for your much-needed medical, wage loss and pain and suffering expenses.

by James E. Ballidis

James Ballidis is the managing attorney for Allen, Flatt, Ballidis & Leslie and has been practicing personal injury law for 25 years.

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