Lately, we have had several clients who were treated at Palomar Medical Center after being injured in car accidents (or other accidents), and were asked by hospital staff how the accident occurred, and whether the patient/client intended to hire a lawyer (remember, the accident just happened). The Palomar employee then informs the patient that it will not likely be billing the patient’s health insurance, but will wait and submit medical bills to the patient’s lawyer, and wait to get paid out of the case.
This situation causes a fair amount of confusion to the patient, and a high dose of concern. Some of these patients call to see if the hospital can do this, and worry that they will personally be on the hook for medical bills.
Can Palomar Hospital do this? The short answer is Yes. Under California’s Hospital Lien Act, a hospital that provides medical services to a person injured by an accident or some other wrongful act may place a lien on the damages recovered from the negligent party “to the extent of the amount of the reasonable and necessary charges of the hospital.” Civ. Code § 3045.1. But what the hospital can recover is not absolute. For example, it cannot take more than half of any amount recovered by the injured party. Also, its lien is secondary to other liens. So, for example, if you hired a lawyer before the hospital perfected its lien, the hospital’s lien would be secondary to your attorney’s lien for fees. Since most personal injury fee arrangements are one-third of the recovery, Palomar could only make a claim for up to half of the rest, which is roughly 33%.