Quick Definition: A hospital lien is a legal term which refers to the right of the creditor (The hospital) to recover from the debtor (the injured person) money for unpaid medical treatment. For personal injury cases, the lien only applies to settlement or verdict award.
Missouri's hospital lien law was originally enacted in 1941.The purpose of the statute was no doubt to ease the burden of caring for indigent accident victims and provide Missouri hospitals with a financial incentive to provide care.
Under the statute, a hospital is entitled to be paid the amount of its lien or as much of the lien as can be paid out of 50 percent of the amount due the “patient under any final judgment or compromise or settlement agreement after first paying the amount of the attorneys' liens, federal and Missouri workers' compensation liens, and any other prior liens” having priority”.
Attorneys representing claimants are generally aware that a settlement or judgment from a personal injury suit is usually subject to various liens or claims. Hospitals, medical clinics, chiropractors and physicians often provide health care services on behalf of the injured party. These institutions most likely will seek satisfaction of those debts by asserting claims against the settlement or judgment proceeds.
Letters of Protection
Quick Definition: A letter of protection (LOP) is a letter sent to a doctor or a hospital by a claimant’s attorney which guarantees payment for medical services to be paid from a future settlement or verdict.
A letter of protection is essentially a contract, drafted by a lawyer on behalf of their client that promises to pay doctor at the time of settlement of the personal injury case rather than upfront or at the time of treatment. In this sense, a LOP allows the patient to receive the medical treatment they need.
However, usually a letter of protection does not promise to pay a doctor, it is only a promise to pay a doctor if a settlement occurs. If there is no settlement, the injured party is still responsible for the medical bills and the hospital or doctor may pursue the injured party to recover.
Additionally, because there is a potential risk of non-payment, a doctor is free to reject a letter of protection. Often doctors have their own letters of protection that they may offer patients to sign. If an injured person is offered such an agreement by their doctor, it is advised to consult an attorney before signing.