Medical liens on an Arizona injury settlement

What a medical lien is

A medical lien is a provider's claim on the money you recover for an injury. Under A.R.S. § 33-931, Arizona hospitals and other health care providers, ambulance services included, can claim their customary charges for your care out of what the at-fault party or its insurer pays.

The lien attaches to the injury claim. It isn't a lien on your house or your bank account.

What a lien can't reach

The statute leaves some coverage out. A provider's lien doesn't reach your health insurance or your medical payments coverage, and it doesn't reach your own uninsured or underinsured motorist coverage.

Medicare and AHCCCS work differently, since each recovers what it paid under its own rules. For AHCCCS that's A.R.S. § 36-2915, which also requires you to notify AHCCCS in writing within 20 days of starting a lawsuit.

How a provider files a lien

The provider records the lien with the county recorder where it is located. A hospital has 30 days after you're discharged, and other providers have 30 days after they treat you, under A.R.S. § 33-932.

Within five days of recording, the provider must mail you a copy. Providers other than hospitals and ambulance services must also mail it to the people claimed to be at fault and to their insurers.

When Sam taught surgery centers about liens in 2016, the first defenses on his list were whether a lien was valid at all and whether the provider had followed these steps.

Why a lien can hold up a settlement

Signing a release with the at-fault driver's insurer doesn't cancel a lien. Under A.R.S. § 33-934, the provider has to join the release or release the lien itself, and otherwise it can sue the insurer that paid within two years of the settlement.

Insurers know this, so they want liens resolved before they pay. Most settlements pay the liens out of the recovery before the rest is distributed.

Where the room to negotiate is

What if the bill is too high? The same statute lets the amount be challenged when the charges are wrong or above the provider's customary charges, or when the care wasn't medically necessary or related to the injury.

Many providers accept a reduction, because a negotiated payment arrives sooner than a lawsuit would. In one trucking-crash case, Sam got a client's liens reduced by 99%. Results depend on the facts, and no past result predicts another case.

After the lien is paid

Once a lien is paid, the provider has 30 days to give you a written release under A.R.S. § 33-936. Keep that release with your case papers.

If a hospital or ambulance company has sent you a lien notice, call for a free case review before you sign anything with an insurer. We negotiate those liens as part of the case, and we don't get paid unless you get paid.