What are An Attorney’s Obligations to Satisfy Medical Liens in Personal Injury Cases?

In most personal injury cases, a client does not pay for their medical treatment out of pocket. Instead, client’s usually treat on what is called a “lien”. A lien is generally defined as a security interest in items of property, to secure the payment of a debt.  In the instance of a personal injury case, it means, the medical providers who provide medical care with no up front payment, can put a lien on your personal injury case. A the end of your injury case, your attorney must honor all liens. Your attorney will pay your medical liens from the proceeds of the case. Today’s blog discusses your lawyer’s obligations to satisfy medical liens in personal injury cases and explains those liens.

There are two types of medical liens that we typically see in personal injury cases: statutory and contractual. All statutory liens can be found in chapter 108 of our Nevada Revised Statutes. A statutory lien is a lien that arises solely as a result of a statute. In personal injury cases, NRS 108.590 and its counterparts, govern relevant issues as to statutory liens, related to hospital medical care:

     NRS 108.590  Extent of lien; exception; lien in addition to lien on property.
      1.  Whenever any person receives hospitalization on account of any injury, and the injured person, or a personal representative after the person’s death, claims damages from the person responsible for causing the injury, the hospital has a lien upon any sum awarded the injured person or the personal representative by judgment or obtained by a settlement or compromise to the extent of the amount due the hospital for the reasonable value of the hospitalization rendered before the date of judgment, settlement or compromise. ….

      NRS 108.610  Notice of lien required: Recording and service.  In order to perfect the lien, the hospital or the owner or operator thereof shall:
      1.  Before the payment of any money to the injured person or to a legal representative as compensation for injuries received, record a notice of lien, substantially in the form prescribed in NRS 108.620, containing an itemized statement of the amount claimed. The notice of lien must be filed with:
      (a) The county recorder of the county wherein the hospital is located; and
      (b) The county recorder of the county wherein the injury was suffered, if the injury was suffered in a county other than that wherein the hospital is located.
      2.  Before the date of judgment, settlement or compromise, serve a certified copy of the notice of lien by registered or certified mail upon the person alleged to be responsible for causing the injury and liable for damages on account thereof and from which damages are claimed.
      3.  Before the date of judgment, settlement or compromise, serve a certified copy of the notice of lien by registered or certified mail upon the insurance carrier, if known, which has insured against liability of the person alleged to be responsible for causing the injury and liable for damages on account thereof and from which damages are claimed.

   NRS 108.650  Payment to injured person after notice of lien; liability and payment to hospital.
      1.  Any person or insurer who, after the receipt of a certified copy of the notice of lien pursuant to NRS 108.610, makes any payment to the injured person, the person’s heirs, personal representatives or the attorney for any of them, as compensation for the injury suffered, without paying the hospital the reasonable value of hospitalization rendered to the injured person and claimed in its notice of lien or so much thereof as can be satisfied out of the money due under any final judgment, settlement or compromise, after paying the attorney’s fees, costs and expenses incurred in connection therewith and any prior liens, is, for a period of 180 days after the date of that payment, liable to the hospital for the amount or part thereof which the hospital was entitled to receive. The hospital has, within that period, a cause of action or other claim for relief against the person or insurer making the payment, which may be prosecuted and maintained in any county wherein the notice of lien was filed.
      2.  Except as otherwise provided in this subsection, if the hospital is publicly owned or not for profit, the person or insurer shall make the payment to the hospital by issuing to the hospital a separate check or other negotiable instrument. If the provisions of NRS 353.1467 apply, the person or insurer shall make the payment to the hospital by way of any method of electronic transfer of money allowed by the hospital.
      3.  As used in this section, “electronic transfer of money” has the meaning ascribed to it in NRS 353.1467.

In a statutory lien pursuant to NRS 108.509, a hospital can assert a lien on your personal injury case, by providing notice to your personal injury attorney via certified mail and recording the same with the local Recorder’s office. Your attorney must satisfy your hospital lien out of the settlement of your case or if the hospital requests, the insurance company must issue a separate settlement check to the hospital to satisfy the lien.

The other type of lien that arises in personal injury cases, is a contractual lien. This type of lien arises, when you seek medical care, but cannot pay out of pocket. Here, you sign a lien contract, stating that you authorize your injury attorney to pay your medical bills, out of the case proceeds. Your attorney will also countersign this document. By signing this lien contract, your attorney is obligated by law to pay your medical providers out of the case funds.

In both types of liens, your attorney is obligated to ensure that both the hospital and other medical providers get paid for the services that they rendered. This means, that when there is a lien on your case, your attorney and not you, must pay your medical bills.
 
Next time, we will discuss whether physical injury is required to assert a personal injury claim in Nevada.