Prior to 2015, hospitals had a pattern of ignoring the existence of available health insurance, at the expense of the credit history and financial status of their patients who were injured by wrongdoers, because doing so would get them more money. Hospitals would do this by filing liens with the Secretary of State of Colorado. An injured person would be forced to then pay the hospital for the full-priced services out of their personal injury settlement or trial judgment, instead of having their bills paid through health insurance. If hospitals billed the insurers, the hospitals would be forced to be compensated for services rendered at reduced rates pre-negotiated by the insurers. Instead, the patient would be forced to pay the lien amount in full at the time of settlement of his or her liability claim because the existence of the hospital lien itself would damage credit, even though the patient may have had insurance which would have paid and reimbursed the hospital at a lower amount. Regular people would have hospital liens show up on their credit, preventing them from buying cars, from buying houses, or doing business.
To rid hospitals of this money grab that affected injured people’s credit despite available health insurance that could pay, in 2015, the Colorado legislature amended the statute that allowed hospitals to file liens. Very simply, the new law prevented a lien from being created against an injured person’s settlement where that person identified to the hospital a car insurance carrier and a primary medical payer of benefits (health insurance generally), unless the bills for treatment were at least sent to those insurers first.
This particular situation arises where a person is injured by someone, say in a car wreck, and the injured person goes to the hospital to treat. The injured person tells the hospital that Medicare or some other private health insurance company will pay the bill. Instead of sending the bill to the available insurance, the hospital files a lien with the Colorado Secretary of State, using the injured person’s name. This lien filing violates the law.
The current law provides that a lien may be created by a hospital for care a patient receives if (1) the patient was injured by someone else; (2) all reasonable and necessary charges are submitted to the property and casualty insurer; (3) all reasonable and necessary charges are submitted to the primary medical payer of benefits, available to and identified by or on behalf of the injured person
And (4) such charges are submitted in the same manner the hospital handles patients receiving treatment but whose injuries were not caused by someone else.
If these steps are not followed, the hospital must pay to the injured person two times the amount the hospital wrongfully asserted.
In 2020, the Colorado Court of Appeals agreed that the hospital lien law was violated in a suit brought by The Wilhite Law Firm and co-counsel against a large hospital corporation that failed to bill Medicare before asserting hospital liens. In 2021, in a separate case with the same issue, the Colorado Supreme Court agreed with the Colorado Court of Appeals that ruled in favor of The Wilhite Law Firm and co-counsel. The Wilhite Law Firm and co-counsel’s case was filed as a class action case, and right now that case is awaiting further litigation, such as being certified by the court as a class and proceeding forward on determining damages.
The money The Wilhite Law Firm and co-counsel hope to obtain for the class will bring much-needed income to Medicare beneficiaries and bring accountability to hospitals.
If you believe a hospital is wrongfully billing you or wrongfully trying to get money from your settlement, please contact Robert Caldwell for your important meeting.
