Georgia’s Hospital Lien Statute: How Hospitals Rip off Insured Patients

Personal Injury Patient Struggles with Hospital Liens

Georgia’s hospital lien statute, codified as O.C.G.A. § 44-14-470, gives hospitals the opportunity to rip off injured victims. When a hospital provides medical care to an injured person, such as someone injured in a car accident, they have the right under Georgia law, O.C.G.A. 44-14-470, to file a lien against any cause of action related to the injury. The lien is a legal claim that the hospital is entitled to a portion of the funds recovered by the injured person in any lawsuit or settlement.

Georgia law sets forth requirements that hospitals must follow to assert a valid lien, such as providing notice to the patient and filing the lien with the local court within a set period of time. Hospitals are experienced in filing medical liens so with few exceptions, they typically comply.

There are hospitals in Georgia that use Georgia’s hospital lien statute to rip-off injured patients. It’s unfair, unethical, and inconsistent with Georgia’s caring and hospitable nature. We want you to know about this abusive practice so that if you or a family member ever require hospital care after an accident, you can fight back.

How Hospitals Rip off Injured Patients

You may be wondering what’s unfair about hospitals using Georgia’s hospital lien statute. After all, shouldn’t hospitals be paid for the care they provide? Hospitals and other medical care providers should always be paid reasonable amounts for the services they provide. The problem lies in how some hospitals use the lien law.

Hospitals typically have a “chargemaster,” which is a list of the prices for every single service or supply that a hospital provides. Chargemaster rates are typically very high, an average of four times the cost of the service or supply provided. Hospitals do not usually receive these high rates, instead, they offer health insurance companies far lower rates.

When a lawsuit is involved, some hospitals see it as a money-making opportunity. They file a lien for the heavily inflated chargemaster rates — sometimes instead of billing insurance. That’s right. Hospitals routinely refuse to bill the patient’s health insurance because they know they won’t get paid as much. In many cases, the chargemaster rates are unreasonable, which is impermissible under Georgia’s hospital lien statute. The statute only permits hospitals to recover “reasonable charges,” O.C.G.A. 44-14-470.

Reasonable charges are exactly what anyone is entitled to when they provide a service for someone else but many hospitals don’t see it that way. Hospitals often get away with filing liens for these exorbitant fees because injured patients are not aware they can challenge them. The hospital ends up with a windfall at the expense of the injured person who little, or virtually nothing, from the lawsuit that was supposed to compensate them for the injuries they suffered.

Unreasonable Hospital Liens Hurt Patients and Drive up Litigation Costs

During the trial of a personal injury lawsuit in Georgia, Plaintiffs must prove the medical expenses incurred due to the accident were reasonable and necessary. Allen v. Spiker, 301 Ga. App. 893 (2009). If the Plaintiff can’t show that the bills were reasonable and necessary, her or she cannot recover the amount of those bills. So, why should a hospital be allowed to place a lien on the Plaintiff’s case and recover for services that aren’t necessary or for charges that are unreasonable? It makes no sense and only benefits hospitals that try to rip off their patients.

Hospital liens also drive up the costs of litigation. How? Suppose a hospital places a lien on a patient’s injury claim for $100,000.00 for the “chargemaster rates.” Assume further that the patient has health insurance and the health insurer would have paid the hospital $50,000.00 for the reasonable value of the services. What if there is only $100,000.00 of automobile insurance available to compensate the patient? In this situation, the patient is not likely settle his or her claim for the insurance limits because the hospital will have its hand out waiting to be paid its grossly excessive fees.

This forces the patient to file a lawsuit in a case that could otherwise be settled. It also subjects the at-fault party to personal financial exposure from a verdict that exceeds the insurance limits. In our hypothetical situation, litigation could have been avoided if the hospital simply accepted reasonable payment from the injured patient’s health insurance company.

Fighting Back Against Hospitals Unfair Lien Practices

At Williams Elleby, we believe that when someone is injured in an accident, they should be able to obtain the medical care they need without worrying about hospital bills in the future. We believe that hospitals should charge fair prices to all patients and not try to drive prices up when they know a patient may receive money from a lawsuit or insurance company. These are pretty basic ethical standards, but unfortunately, not all hospitals seem to agree.

The good news is that people are becoming aware of some hospitals’ abusive billing practices. Personal injury attorneys across the country are fighting against hospitals that try to rip off patients. As injured patients learn more, they have started hiring attorneys to advocate on their behalf. News organizations are publishing articles that highlight the hospitals’ attempts to rip off personal injury patients and calling out — by name — the most abusive hospitals. There’s still a lot of work to be done, but the progress is positive.

If you or someone you know has suffered personal injuries in Georgia, make sure you hire a law firm that is knowledgeable in the state’s hospital lien laws and not afraid to fight back. If you have questions about lien laws or whether you have a case, call the attorneys at Williams Elleby at 833-LEGALGA to schedule a free consultation with one of our Georgia trial attorneys.