Resolving payment of a client’s medical bills at the end of a personal injury case can often be tricky. Various medical providers and health insurance plans may have outstanding bills. The right to repayment of each may be different based on respective legal status. The merit of each claim and the amounts available to satisfy these obligations must be carefully examined by the attorney prior to finalizing any payments on a case-by-case basis.
Obtaining a reduction of the medical provider lien is often crucial to ensuring that the case settles. This is especially true on smaller soft tissue injury claims where the settlement offered is rarely enough to pay all providers in full. Occasionally, a personal injury lawyer will run into a medical provider that is unwilling to reduce their lien or thinks that they have a right to be paid in full.
Most medical providers assert a lien under RSMO 430.225. This is the Missouri medical provider lien statue, which was passed to “ensure injured patients are quickly treated without first considering if the patients are able to pay and to protect health care providers financially so that they can continue to provide care.” Kelly v. Marvin’s Midtown Chiro., LLC, 351 S.W. 3d 833, 835 (Mo. App. W.D. 2011). In 2003 RSMO 430.225 was amended to allow chiropractors to also protect their financial interest in the settlement along with other medical providers.
Some courts have read the lien statute as giving medical providers an unqualified right to place a lien on patient debts caused by third parties. However even if this is an unqualified right, as with any other statutory right or other legal right, it can be modified or waived by a contract. Coffer vs. Wasson-Hunt, 281 S.W.3d 308, 312 (Mo. Banc 2009).
An interesting case recently shed some light on the possible limitations of a medical provider using a contract to attempt to bolster their right to reimbursement beyond what is provided for in the Missouri lien statute.
In Ford v. Skaggs Chiropractic, LLC, 599 S.W.3d 264 (Mo. App. W.D. 2020), a chiropractor had the patient sign an agreement labeled “Assignment & UCC Lien.” The UCC lien stated that Ford had signed an agreement to Skaggs covering the full amount of its charges, which granted to Skaggs the “primary and non-contingent ownership and security interest” in Ford’s accident settlement. The agreement directed any payer to pay the proceeds of any settlement directly to Skaggs to the full extent of any charges. The agreement further included a purported waiver whereby Ford agreed to give up any statutory rights of reduction he may have had under the Missouri lien statute.
The court in Ford used the decision in Huey v. Meek, 419 S.W. 3d 875, 881 (Mo. App. S.D. 2013), to determine that the 2003 amendments to RSMO 430.225 were to provide the exclusive remedy for health care providers to seek payment out of the proceeds of a personal injury claim.
The court further cited Schoedinger v. Beck, 557 S.W.3d 531,534 (Mo. App. E.D. 2018) where the medical lien statute was determined as controlling to “establish the procedures hospitals and health practitioners must follow to secure a lien to recover amounts due to for medical services rendered to a person injured by a tort feasor. Id. at 534.
The personal injury lawyer would thus be wise to hold off in allowing a medical provider to use a contract signed by the patient as justification for payment above and beyond what is provided for in the Missouri medical provider lien statute.
While the client has the right to control who pays the lien, the lawyer has an ethical obligation to ensure lienholders are paid. The Missouri Rules for Professional Conduct address trust accounts and property of others in Rule 4-1.15(e). Comment [8] under this rule leaves the attorney with no choice but to hold the settlement in trust until the ERISA lien amount is either negotiated or finalized. The comment states “when the third-party claim is not frivolous under applicable law, the lawyer must refuse to surrender the property to the client until the claims are resolved…when there are substantial grounds for dispute as to the person entitled to the funds, the lawyer may file an action to have a court resolve the dispute.”
The safest course of action for resolving a dispute of a valid lien would be to file a motion to adjudicate lien with the court. This would allow a judge to determine who gets paid how much. This should only be filed as a last resort if the client does not want to pay the lien, as otherwise the personal injury lawyer should be the one who performs the vital function of negotiating liens as a service to their client.
