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HOSPITAL CAN’T FILE LIEN ON FUTURE RECOVERIES The California Supreme Court ruled Monday that hospitals contracting for specified payments for services cannot file a lien on patients’ subsequent recoveries from third-party lawsuits. The unanimous decision held that a lien under the state’s Hospital Lien Act must be based on an underlying debt, which cannot exist if a hospital has contracted for a set amount as “payment in full.” “A lien under the HLA is simply a legal claim upon the property of another in satisfaction of a debt owed by a patient for medical services provided by the lien claimant,” Justice Janice Rogers Brown wrote. “Thus, absent an underlying debt, the hospital may not recover on the lien even assuming that the recovery comes from the tortfeasor.” The case revolved around Joel Parnell, who was treated at Fresno’s San Joaquin Community Hospital after being injured in an automobile accident while riding in a taxi. The hospital was paid the $5,000 provided by contract with Parnell’s health plan, but then Adventist Health System/West, which owns the hospital, placed a lien on the more than $14,000 that Parnell recovered from a suit against the cabdriver. Justice Brown said the court recognized that California hospitals face rough financial times and didn’t want to “exacerbate” the problem. “Our job is to construe our statutes in accordance with the Legislature’s intent and the controlling case law,” she wrote. “As such, hospitals may look to the Legislature for relief from these financial pressures, but not to this court.” Brown also said that the solution “lies in the hands of the hospitals.” “If hospitals wish to preserve their right to recover the difference between usual and customary charges and the negotiated rate through a lien under the HLA,” she wrote, “they are free to contract for this right.” The ruling is Parnell v. Adventist Health System/ West, 05 C.D.O.S. 2866. — Mike McKee

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