Arizona Supreme Court Clarifies Deadline By Which Non-Hospital Health Care Providers Must Record Liens
Health Law Alert 09/15/16 Scott Klundt, Christopher Dang, Brenda Maloney Shafer
New Arizona Supreme Court ruling requires non-hospital health care providers to record liens within 30 days after the first time services have been provided to the patient.
Under Arizona law, physicians and other health care providers are entitled to record medical liens for their "customary charges" in treating an injured person. Such liens apply to claims that the injured person may have for damages against the person who caused the injury. For example, if a person is injured in a car accident, a physician who provides medical services to the injured person can enforce the lien against the other driver and his insurance company. The medical lien essentially places the insurer(s) and other parties on notice that any settlements are subject to the physician's claims for payment. If the other driver/insurance company settles with the injured person without ensuring that the physician's charges are paid, the physician can pursue a claim directly against the other driver and insurance company, even though they have already paid the injured person.
In order to enforce a medical lien, the health care provider must strictly comply with the applicable statutes. Under A.R.S. § 33-932(A), a non-hospital health care provider must record the lien with the county recorder's office "before or within thirty days after the patient has received any services relating to the injuries."
In Premiere Physicians Group v. Navarro, a question arose as to whether A.R.S. § 33-932(A) requires the health care provider to record the lien within 30 days after services were first provided to the patient or whether the health care provider only had to record a lien within 30 days after any services were provided. Last year, the Arizona Court of Appeals held that a health care provider could record the lien within 30 days after any services were provided, but held that recovery would be limited to recovery for the services provided within 30 days prior to the lien being recorded and any services provided thereafter.
The Arizona Supreme Court disagreed with the lower court's interpretation and held that a lien must be recorded within 30 days after the services have first been provided; otherwise, the lien is invalid and the non-hospital health care provider may not pursue a claim against the party at fault or the insurance company. In such cases, the non-hospital health care provider will then be limited to pursuing recovery against the patient. As a result of this decision, non-hospital healthcare providers must now take steps to ensure that a proper lien is recorded within 30 days after the first time services have been provided to the patient.
Note that this decision does not apply to hospitals, which are treated differently under the medical lien statutes. Hospitals are required to record a medical lien within 30 days after the patient has been discharged, regardless when medical services first were provided.
If you have any questions regarding this decision or its impact on your medical practice, please contact Scott Klundt (602-229-5212), Brenda Shafer Maloney (602-229-5774), Christopher Dang (602-230-5530), or your local Quarles & Brady attorney.