Utah Hospitals Now Get Paid 100% of Their Liens in Personal Injury Cases

Who gets how much from a personal injury settlement or judgment has always been shared pro rata among those benefitting: the plaintiff and those who paid for the personal injury. No longer. The Utah Supreme Court ruled in Bryner v. Cardon Outreach, LLC, et al., 2018 UT 52, that the Utah Hospital Lien Statute, Utah Code § 38-7-1, et seq. allows hospitals 100% of their lien regardless of the cost involved in obtaining the recovery. The statute is relatively straight-forward but its effect is a bit murky. Let’s look at the effects.

Who Shares in the Costs of Recovery? Plaintiffs typically want hospitals, insurance companies, and others who have liens against a case to contribute to the efforts it takes to obtain a judgment or settlement– i.e., the attorney fees and costs. As the theory goes, this is only fair since there would be no payment to resolve the liens without the efforts of the plaintiff and their attorneys. The statute, however, is clear that hospitals stand first in line once the attorneys have been paid and their lien is paid at 100%. And there’s the rub.

Unfair Place in Line? Every other lienholder does not have the hospital-lien-friendly statute supporting them. For instance, a health insurer who has paid the hospital for the plaintiff’s care cannot step into the hospital’s shoes and assert a hospital lien. This means that plaintiffs will continue to negotiate insurance liens as they always have– putting pressure on lienholders to contribute to the costs of obtaining the result– but perhaps with a bit more vigor since the hospital liens are now being paid out at 100% and plaintiffs will not obtain any savings there. It seems the Utah Legislature is robbing Peter to pay Paul and placing lienholders on different footings. Apparently the hospital lobby has been working overtime.

What Else? Let’s take a broader look at some of the effects of the ruling:

  • Plaintiffs will know going into settlement discussions that the hospital lien will be paid at 100% without discount. The wiggle-room that was once available to a plaintiff for post-settlement lien negotiation is now tightened considerably as to hospital liens.
    • This should tend to push settlement numbers higher since plaintiffs will have less room to work out lien numbers. For example, a case with a $100k hospital lien could be counted on to contribute some amount back to the plaintiff from a hospital’s contribution towards costs. This would factor into a plaintiff’s ‘bottom-line’ settlement number– a number that will certainly now be higher. This essentially pushes lien amounts back to insurers. But, maybe that’s where it should have been anyway.
  • Speaking of liens, we can expect a push back by other lien holders, insurance companies, in particular, to demand similar lien rights from the Utah Legislature. The push back could result in further lien litigation to determine whether a lien claimant is or should be required to contribute to the cost of obtaining a judgment or settlement. Right now, Utah’s case law is thin on this issue.
  • Other lien holders will likely have reason to petition the Utah Legislature to modify the Hospital Lien Statute to either include them in its terms, allow them to subrogate to the hospital’s position under the statute, or require hospitals to contribute to the costs of pursuing claims.

Call Me. The above discussion probably raises as many questions as it answers. You likely have more questions than this post or the other information on this website can provide. I regularly represent parties, insurers and insureds, in a variety of insurance-related contexts including personal injury, wrongful death, bad faith, business torts, employment disputes, workers’ compensation, D&O, and specialty. You cannot make a good decision if you do not get competent advice from a qualified, experienced attorney. You need to protect yourself and your interests. You do this by pursuing what you are entitled to. Call me or contact me directly. Using my many years of experience and backed by a firm of legal specialists in many legal fields, I can help you evaluate your case and help you make smart decisions.

Ken

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