§44-49 Liens: Because Your Doctor's Student Loans Aren't Gonna Pay Themselves

§44-49 liens? What are those, and what's that crazy-looking symbol?

In legal parlance, the symbol means "Section," and it precedes a typical citation to a statute! Learn something every day, right?

With that out of the way, let's imagine that you got hurt in a car accident and went to see the chiropractor. The chiropractor, understanding that you might have a personal injury claim coming down the pipe, has a couple of options for getting paid for your treatment. First, she can require you to pay out of pocket at the time of treatment; great for getting paid fast and in full, but not incredibly endearing to the patients. Second, she can bill the insurance company and get back whatever the contractual discount is. Finally, she can decline to bill the insurance company (like we talked about the other day), assert a lien against your personal injury recovery, and hope to get back more than what your health insurance would have paid.

But I thought that was illegal!

What you'll recall from Wednesday's article is that G.S. § 131E-91 applies only to hospitals and ambulatory surgical facilities. Other providers are at their leisure to elect whether to bill your insurance, and they can even choose to define the terms of their reimbursement before agreeing to treat you in the first place.

Specifically, North Carolina General Statute §44-49 permits medical providers to assert a lien against "any sums recovered as damages for personal injury in any civil action" in North Carolina. §44-49 applies to any medical provider to whom the patient owes payment for any drugs, medical supplies, hospital stays, or other medical provision of services. Interestingly, chiropractors aren't explicitly mentioned in the statute, so it's debatable whether they're entitled to a §44-49 lien. However, what you'll find is that most chiropractors are going to require their patients to sign an "Assignment of Benefits" that has the same effect. We'll cover Assignments of Benefits next week.

Does the lien apply to any form of coverage?

Case law dictates that §44-49 liens expressly apply to third-party liability coverage. The only question then becomes whether the lien also applies to first-party coverage, like uninsured and underinsured, as well as other types of coverage like Medpay

Case law, as well as statutory law, appears to allow §44-49 liens to attach to UM and UIM coverage. North Carolina General Statute § 29-279.21 applies to first-party coverage, and the general consensus is that the statute folds UM and UIM into the coverages that §44-49 allows a lien to attach to.

With regard to Medpay, the answer is less clear. If you look at §44-49, you'll notice that it permits a medical provider's lien to attach to "any sums recovered as damages for personal injury in any civil action ..." When you collect your Medpay, it operates more as health insurance than auto insurance, right? And you aren't recovering those funds as damages for your personal injuries, right? So it stands to reason that funds recovered as medical payments should not be subject to a medical provider lien under §44-49. What you'll see, again, is that the Assignment of Benefits you'll be required to sign before treatment is going to allow your medical provider to assert a recovery interest against all coverages; including Medpay.

Is the §44-49 lien automatic?

Nope! There are requirements that your medical provider has to satisfy, and if even one of them is messed up, then the medical provider loses access to the lien. There are basically three requirements:

1. The provider must provide written notice of the lien. This notice doesn't have to be filed in court, it doesn't have to be served via certified mail, and it doesn't otherwise have to comply with any general notice formalities otherwise required by the Rules of Civil Procedure. If the reasonable person would be able to ascertain that the provider was asserting a lien, then the written notice is most likely sufficient.

2. The provider must provide all related medical bills, free of charge. This means a bill sufficient to establish in court that the charge applies to the patient. The bills must pertain to treatment having a causal relation to the accident, being "rendered in connection with the injury in compensation for which the damages have been recovered."

3. The provider must provide all related medical records, free of charge. Because the statute refers to bills "or" records, you may run into a medical provider asserting that he or she may charge for either your bills or records, but not both. Keep in mind that HIPAA allows you to get your own medical records from any provider regardless of the circumstances, but that normally the provider can charge you for those records. Allowing the provider in a personal injury situation to charge for bills or records would cut against the intent behind §44-49. This statute is designed to facilitate the expedient and thorough resolution of claims without having to involve the court system; allowing a medical provider to charge exorbitant copying fees, then make a claim against the injured party's recovery, would be intrinsically unfair and encourage litigiousness. Remember, though! If the provider is not asserting a lien against your recovery, then he or she is allowed to charge you for your bills and records! But hey, that's what HITECH is for.

Great! Anything else?

Absolutely! But in the interest of not overwhelming anyone with too much information, the rest of the §44-49 material is coming on Tuesday. Then on Friday, we'll cover Assignments of Benefits and their interaction with other liens. Stay tuned, folks!