Health Care Providers Such As Multicare Are Allowed Under State Laws to Use Medical Liens

Health care providers such as MultiCare are allowed under state laws to use medical liens to ensure that patients who receive the benefit of trauma care pay their health care providers when they receive a settlement from the party that caused them harm. The lien statute allows health care providers to be paid out of settlements between plaintiff/patients and third parties and their insurers, thereby placing the cost of care on the parties responsible for the underlying injury. A number of Washington hospitals also use this statute to collect their bills.

The way the process typically works is that personal injury plaintiffs and their attorneys will demand that the third party pay the hospital’s billed charges as part of the settlement. Then, when a settlement is reached, the plaintiff and the third party will agree that the plaintiff will pay the hospital bills out of the settlement. The plaintiffs’ attorneys then will either pay the hospital’s bill or try to negotiate a reduced payment.

Beginning in 2008, MultiCare contracted with Hunter Donaldson to assist it with the process of recovering medical expenses it is owed. Hunter Donaldson did not actually file on MultiCare’s behalf until 2010, after MultiCare experienced a number of instances where plaintiffs’ attorneys refused to pay. Filing of a lien insured that the hospital’s bills were not ignored.

The current lawsuit alleges that the plaintiffs don’t have to pay the hospital out of their settlements because the liens submitted by Hunter Douglas were defective. The court will determine whether the liens were defective. What the lawsuit does not dispute is that MultiCare was entitled to be paid out of the settlement funds the plaintiffs received.

MultiCare is currently engaged in a review of Hunter Donaldson’s lien-filing practices in order to determine that best practices are followed going forward. MultiCare’s policy is that liens are not filed in cases where the patient has private insurance because our contracts require that the insurers be billed. Medicare and Medicaid are different; they are regarded as payers of last resort and the hospital must exhaust other avenues before charging the government.

MultiCare Consulting Services is a Washington limited liability company that provides consulting services to health care clients nationally. MultiCare owns nearly all of the ownership interests in MCS.

MultiCare’s policy is not to comment on personnel matters.