Does a hospital have a legitimate lien if their claim was rejected by my health insurance because they waited too long?

Question

I was treated in an emergency room for injuries from an accident that was the fault of the other driver. I provided my health insurance card at the time of my treatment. 3 months after treatment, the hospital made a claim against my auto insurance medpay, but after ~$2K of payment to the hospital (which maxed out my medpay at that point), the hospital still had a claim of $16+K, which, 3 months after that, they filed with my health insurance. My health insurance rejected it since it was so late after the date of treatment (over 6 months). 7 months after that I received a lien letter from a company representing the hospital. I never received a bill from the hospital at any time. I am looking to write my own demand letter. Does the hospital still have a legitimate claim to any proceeds I obtain in my settlement?

Doug Allen · Answer

Most likely the hospital will have a Lien on your settlement monies. It really depends on the specific laws of your state. Hospital lien laws are very powerful here in my state of Colorado. You would have to look at the hospital lien statute and laws governing that statute in your state.

Brian Michael Bradford · Answer

This is a common problem we see with hospitals in Colorado.  Hospitals prefer billing Med Pay because they receive more than if only health insurance was used.  A problem arises, as in your case, where there is a remaining balance after Med Pay has been received.  Fortunately, Colorado recently has passed a law requiring a hospital to bill health insurance before it can assert a valid lien.  We are typically able to resolve these disputes by communicating directly with the health insurance carrier and the hospital's billing department.  In our experience, the health insurance carrier often becomes the patient's best ally in resolving the outstanding balance.  Although each case is different, when a hospital fails to follow billing practices for a health insurance carrier (and a patient covered under that carrier's health plan), it can lead to the hospital writing off the remaining portion.  Please feel free to reach out to us with any specific questions.

Q: Does a hospital have a legitimate lien if their claim was rejected by my health insurance because they waited too long?