Georgia Hospitals Can File Lien to Recover Co-Pays and Deductibles

MCG Health filed a $36,177.68 lien against the plaintiff’s cause of action in MCG Health v. Kight, 2015 Ga. LEXIS (3/2/15) pursuant to the Georgia Hospital Lien law, OCGA § 44-14-470 et seq for the “reasonable charges” of hospital care furnished to the plaintiff. However, at that time, the Hospital had been compensated by insurance payments from Blue Cross Blue Shield for the bulk of its discounted charges. However, the hospital was still owed $261.10 in unpaid discounted payments due from Blue Cross, and another $186.48 in unpaid deductibles or co-pays due from the plaintiff. After lien was filed, the plaintiff continued to receive care, and, eventually owed the Hospitala total of $863.10 in deductibles or co-pays. The Hospital has modified its lien to reflect that amount. The plaintiff attacked the validity of the lien arguing that there was no debt owing at the time it was filed, and sought an award of attorney’s fees. The Court of Appeals reversed the trial court and the Supreme Court affirmed:

“Contrary to the ruling of the trial court and Kight's arguments to this Court, the Hospital was owed money on the date that the lien was filed. As a result, Kight's principal argument that there was no debt on which to base any lien must fail. Likewise, Kight's corollary argument that the Hospital waived its right to impose a lien also fails based on the facts of this case. The Hospital's contract with Blue Cross explicitly reserves the Hospital's right to collect deductibles and co-pays directly from Kight, irrespective of the agreement to hold Kight responsible only for a discounted price of treatment. Contrary to Kight's argument, this is not a situation in which the Hospital has agreed to no recourse whatsoever except against the patient's insurer. For that reason, Kight's reliance on cases such as MCGHealth, Inc. v. Owners Ins. Co., 288 Ga. 782 (707 SE2d 349) (2011) is misplaced. Finally, Kight's tertiary argument that the Hospital's lien was required to be exact on the date it was filed or be considered void ab initio also fails. There is nothing in OCGA § 44-14-470 et seq. imposing such a requirement, and we will not judicially legislate one.”

This decision appears to permit hospitals to file a lien for the full amount billed and then reduce it later to adjust for payments by a medical insurer. However, it appears that a hospital cannot use the hospital lien statute to “balance bill” the plaintiff for the difference between the full amount and the discounted payment it has accepted. The Court seems to be limiting the recovery to deductible and co-pays.