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The Impact of a Hospital Lien on Your Personal Injury Recovery

Personal injury litigation can be a complicated process, even when the case ultimately concludes with a settlement. First, an injury victim is dealing with car repairs, medical treatment, and other economic losses such as lost wages. Then comes the legal process, with issues like filing suit, the statute of limitations, insurance adjusters and insurance policy issues, discovery, settlement negotiations, the drafting of settlement contracts, and possibly even trial. That’s why most injury victims hire a personal injury attorney to help them through the process.

But personal injury litigation can include many other complications that most people have never thought about. A perfect example is a hospital lien. Keep reading to learn more about what a hospital lien is and how it can impact your personal injury recovery.

What Is a Hospital Lien?

Let’s start by understanding liens in general. Liens are legal rights, generally granted by statute, that allow a creditor, or someone who has provided a service, to essentially lay claim to the property of the debtor (or person receiving services). In other words, an entity places a lien on a good or service which they’ve provided, but for which they haven’t yet been paid.

An example with which many Oregonians are familiar is a construction lien (PDF). If someone makes construction improvements or supplies labor or materials for another person’s property, they have a right to place a lien on the property if they are not paid.

Similarly, Oregon Revised Statute 87.555 allows a hospital to file a lien under certain circumstances when an injured person who receives hospitalization or medical care does not pay their bill, often because they’ve claimed damages from a third person causing the injury – a common occurrence in personal injury cases. The lien right is granted to the hospital, physician, physician’s assistant, or nurse practitioner who treated the patient or provides medical services.

How Does a Hospital Lien Affect My Personal Injury Case?

Hospital liens can attach to any sum awarded to the injured person (or the injured person’s representative if the patient died). This includes personal injury judgments and settlements.

In other words, a valid hospital lien must be paid from the judgment or settlement proceeds received in the personal injury case. Obviously, this can greatly reduce the sum ultimately received by the injured plaintiff.

Why Are Hospital Liens Allowed?

The most important reason for permitting hospital liens is to ensure that injured people receive the medical treatment they need. When the accident occurs, the injured party may not have insurance or sufficient funds to pay for treatment. The medical care providers’ ability to file a hospital lien provides them with security that they will be reimbursed at a later time for the services provided now.

Are All Hospital Liens Effective?

Not necessarily. For example, certain procedural steps must be followed to properly file a hospital lien. Oregon law provides that a hospital must provide notice that meets statutory requirements. Time limitations also apply. If these steps are not followed, the hospital lien is not valid.

Additionally, Oregon law has substantive limitations on hospital liens. For example, liens are not valid against a person falling under the Workers’ Compensation Act. Another restriction is that a hospital lien cannot be filed after a settlement has already been reached. Similarly, a hospital lien is not effective against a sum necessary for attorney’s fees, costs, and expenses incurred to obtain a judgment, settlement, or compromise.

Call with Questions

The examples above are just a few of many limitations imposed on hospital liens in Oregon. One of the experienced personal injury lawyers at Nelson Macneil Rayfield will be happy to discuss these additional limitations with you. Moreover, keep in mind that even when hospital liens are effective, we have successfully negotiated lower amounts on many occasions. Give us a call today to learn more in a free consultation.