Hospital Liens

Issue: Should hospitals be allowed to recoup 100 percent of the proceeds from a judgment or settlement that a patient receives in a lawsuit against a third-party?

Position: NO. It is important to their fiscal health that Florida’s hospitals be entitled to liens on payments in lawsuits involving treatment at their hospitals. However, many hospitals have the benefit of special acts that allow them to recoup 100 percent of the proceeds of the patients’ judgment or settlement, leaving nothing to provide for themselves or their families for funeral expenses, lost wages and other medical expenses, including doctors’ bills from other health care providers.

When 100 percent hospital liens are in effect and the patient’s proceeds are limited, attorneys have no choice but to turn down these cases. This impacts injured patients and their families in need of representation as well as Florida’s hospitals when these cases are not pursued as result of these oppressive lien laws.

When a case is not pursued, only the person who caused the injury benefits.

History: Recently the Florida First District Court of Appeals ruled in Mercury Insurance Company of Florida vs. Shands Teaching Hospital and Clinics Inc. that the Alachua County Hospital Lien Law violates the Florida Constitution. This decision has brought the validity of Florida’s hospital lien laws into question.

Legislative Efforts: The Florida Justice Association supports a statewide, uniform hospital lien law that would:

  • Grant all hospitals in the state a lien on any judgment or settlement with a third party who caused injuries treated in the hospital. Hospitals in counties where there is currently no lien law would now have one.
  • A uniform lien law that is consistent throughout the state instead of patchwork laws that change from county to county. There are currently 18 local hospital lien laws on the books in Florida.
  • Provide equitable distribution of the proceeds of a lawsuit.
  • Repeal all conflicting laws, rules and ordinances.

Conclusion: A law such as the one outlined above will balance the right of a hospital to be paid with the need of injured patients to retain a portion of the proceeds of a lawsuit to meet their needs and that of their families. It’s time for state law to conform to what the Florida Supreme Court has already said is an equitable way to distribute payments.