Must Know Updates to the Healthcare Provider Lien Law

All licensed health care providers in Washington have special legal protections for their treatment bills to enforce payment from an insurer, attorney and/or patient for outstanding services in an underlying personal injury, once that case concludes.

These legal protections are known as “liens” and are governed by the Revised Code of Washington (RCW) at chapters 60.44.010 through 60.44.060.   Recently, these statutes were revised, and important changes were made that may affect how you run your practice:

1. You must file a satisfaction of lien no more than 30 days after payment.  If a patient files suit to compel filing the satisfaction, then the provider will have to pay for the costs of the lawsuit AND reasonable attorney fees AND any damages. This is probably the most significant change to the lien statute.  A satisfaction of lien form must be filed because it gives all interested parties notice that the lien has been satisfied.  Not only is important for your patient, especially if they plan to buy a home or get credit in the future as failing to file this form could impact their financial interests, but it is critical for you as the provider.  If this is not done, you could expose yourself to a potential lawsuit by the patient.  If the patient prevails, then it is you as the provider who must pay for the costs associated with the lawsuit and the patient’s actual attorney’s fees, in addition to any other damages that the patient is able to establish. The satisfaction of lien form must be filed no more than 30 days from payment, so best practices would to file as soon as you receive payment for the bill.  See a sample form at the end of this article.
2. You can hire a collection agency to collect on the lien.The provider may now either pursue collection on his or her own behalf or through the use of a collection agency.  This collection agency must be fully licensed by the State of Washington and run its business in accordance with collection laws found at RCW 19.16.100 through RCW 19.16.960.
3. You must disclose the use of liens as part of your billing and collection practices with the patient.If your business practice includes regularly filing medical liens, then this practice must be disclosed to all new and current patients.  This disclosure should be in your initial intake forms for new patients and notice must be given to all current patients if this practice was not initially disclosed or if this is a new practice at your office.  Otherwise, if you file a lien without giving the patient prior notice of this practice, then your lien may be unenforceable.

Below are some general reminders on filing and enforcing liens in Washington:

1. Filing the Lien. To file a lien, the law only requires that you file the lien with the County Auditor where the health care services were provided.[1]   However, to increase the lien’s effectiveness, better practices include mailing copies of the lien to:
   • Insurance company for the tortfeasor;
   • Patient;
   • Attorney for the patient;
   • Patient’s insurance company.

   The law suggests that liens must be filed within 20 days of the injury or receipt of medical care, but permits providers to file liens after that time frame, so long as settlement and payment have not been made to the patient yet. See RCW 60.44.020.

2. Enforcing the Lien. You must move to enforce the lien within one year of filing, or re-file with the County Auditor to keep it active and enforceable until satisfied. See RCW 60.44.060.
3. Amounts Permitted. The provider’s lien cannot exceed 25% of the total amount of a verdict, award or settlement amount to the patient. To remedy this limitation you may want to consider having your patient sign a “guarantee” of payment of your bill regardless of the lien law limitations.

We encourage all health care providers to establish well-functioning procedures for the filing of statutory medical liens in cases where a patient balance is pending for treatment related to personal injuries.

The assurance of the payment of provider balances in personal injury matters can also rest with the patient’s advocate who has a reputation for ensuring that their client’s healthcare expenses are paid in full at the conclusion of a claim.  We have always committed themselves to the principal of the providing clients with the highest degree of legal representation with integrity, which includes ensuring that their financial obligations to their health care providers are satisfied at the conclusion of their claim.

[1] The fee for filing a lien is set by each county, and we have seen this fee vary between counties and change in recent months.  Prior to filing a lien it is best to check with the local County Auditor.