Introduction: New Legislative Changes in Georgia

Summer is an exciting time for those of us who monitor the changes coming down from Atlanta. July 1st is when newly passed legislation becomes law in Georgia. Some of those new laws are highly publicized and debated, while others fly under the radar. One of the more inconspicuous laws to change Georgia Medical Liens. While it might seem like a dry subject, it is an important one for people who have been injured due to the negligence of others, most frequently car accident victims.

What is a Hospital Lien?

According to O.C.G.A. § 44-14-470, et seq., hospitals or physicians who treat patients seeking treatment as a result of an injury caused by another party may assert a lien for reasonable charges against the settlement funds accruing to the patient, provided they fulfill the statutory requirements. These requirements include sending notice to the tortfeasor (the at-fault party), the tortfeasor’s liability insurance carrier, and the patient, and subsequently filing a lien in the county where the healthcare provider is located and the patient’s home county. This must all be done within the prescribed time period.

Understanding the Hospital Lien Process

In essence, if you are in a car wreck and you go to a hospital for treatment, the hospital (or physician) can collect payment for the treatment from your settlement. On its face, this doesn’t sound unreasonable. It’s a mechanism by which a doctor or hospital can get paid if you receive treatment from them and there is money with which to pay them. However, it’s not that simple. There have been a number of appellate court decisions interpreting these statutes over the last couple of decades.

Case Study: Bowden v. The Medical Center

One such case is Bowden v. The Medical Center, which had multiple trips through the appellate ranks in Georgia. It all started with the definition of “reasonable charges.” Everyone is aware that medical charges have skyrocketed over the last decade and there have been numerous reports on the vastly different rates for the same treatment at similar hospitals. The lien is not for any imaginable amount, but for the reasonable charges. The Georgia Supreme Court ultimately held that what various health insurance carriers (e.g., Anthem, UHC, Aetna, Cigna, Medicare, Medicaid) pay is admissible to prove reasonableness.

For example, if a CT scan has a base charge of $3,000 (referred to as the “chargemaster rate”), it would not be unusual to see wildly different reimbursement rates from various “payers” depending on the managed care contract with the hospital. Medicaid may pay $300, Aetna might pay $900, while UHC could pay $1,111. Determining which, if any, of those amounts are reasonable and what amount the hospital can assert its lien for was a key issue litigated in Bowden without a real definitive answer.

Georgia Senate Bill 168: Key Changes to Georgia Medical Liens

Georgia Senate Bill 168 has introduced significant amendments to O.C.G.A. § 44-14-471, which governs hospital liens. These amendments have two important implications:

1. Inclusion of Chiropractors:
   • The new law adds chiropractors to the list of medical providers who can file a lien against a personal injury cause of action. While chiropractors frequently have patients and their lawyers sign letters of protection before providing treatment, this amendment gives chiropractors another method for perfecting their right to recover against a personal injury case.
2. Requirement to Bill Health Insurers First:
   • The lien statute now expressly requires that medical providers first submit a claim to an injured person’s health insurer before filing a lien. If an injured person has health insurance, a provider can only file a lien if the health insurer rejected the claim.

This requirement to bill health insurance first is a welcome change. Providers often prefer to file liens because they can potentially recover more from a liability or uninsured motorist policy than they would from a negotiated reimbursement rate with a health insurer.

Practical Implications and Strategic Considerations

Limitation on Recovery Analysis

Subsection (d) of GA Code § 34-9-11.1 specifies that the recovery to be analyzed for determining whether the claimant has been made whole is limited to bodily injury (BI) settlements. This is much narrower than the general recovery under a retainer, which might include uninsured motorist (UM) coverage and other amounts. Consequently, WC lien claimants cannot include UM or other non-tortfeasor funds in the made whole analysis, significantly restricting their ability to claim a lien.

Lump Sum Settlements and No Allocations

The statutory language places the burden of proof on the employer to demonstrate that the settlement fully compensates the plaintiff. When settlements are lump sums without specific allocations for various categories of damages, it becomes exceedingly difficult for the employer to meet this burden. Without clear evidence of how the settlement addresses each category of damages, the employer cannot prove entitlement to a Georgia medical lien, making the lump sum settlement/no allocations argument a consistent winner.

Anticipated Legal and Practical Challenges

1. Duty to Investigate Health Insurance:
   • What if the patient does not provide their health insurance information? Does the hospital have a duty to request this information or can they claim ignorance? If they discover the health insurance later, do they have to release the lien? What if the discovery occurs after the filing deadline has passed?
2. Interpretation of “Rejected”:
   • The term “rejected” can have multiple meanings. For instance, health insurance claims can be rejected for incorrect coding. Does the hospital have a duty to correct the coding and resubmit? What if it is rejected again? The hospital could miss the tight deadlines to file the lien. Denials can occur for non-covered services or coordination of benefits issues. It will be interesting to see if “rejected” and “denied” are treated as interchangeable terms.
3. Governmental Payers:
   • How will Medicare and Medicaid be treated under this new scheme? Medicare is considered “health insurance coverage,” but Federal law requires hospitals to first seek other responsible payers before filing charges to Medicare. Will the changes to the law conflict with this federal mandate, potentially resulting in federal preemption issues? Medicaid is considered a “payer of last resort,” but the lien statute seems to suggest that a lien cannot be filed until a Medicaid claim is rejected.

Workers’ Compensation Subrogation Liens

In addition to medical provider liens, understanding Workers’ Compensation (WC) subrogation liens is crucial for personal injury practitioners in Georgia. GA Code § 34-9-11.1 governs WC subrogation liens, allowing employers or insurers to recover amounts paid under WC only if the injured employee has been fully and completely compensated for all economic and non-economic losses. This statutory requirement places a heavy burden of proof on the employer or insurer.

Georgia’s Made Whole Doctrine

The “made whole” doctrine is a critical defense in dealing with healthcare liens. Under this doctrine, a healthcare provider is not entitled to reimbursement unless the injured plaintiff is fully compensated by the tort recovery for all their economic and non-economic damages.

Statutory Protection under O.C.G.A. § 33-24-56.1

In Georgia, the made whole doctrine is codified under O.C.G.A. § 33-24-56.1. This statute applies to any health insurer, HMO, PPO, disability plan, lost wage provider, or other healthcare providers providing insurance to individuals or groups. Essentially, the statute states that healthcare providers are not entitled to reimbursement from the plaintiff’s proceeds unless the injured party was fully compensated by the recovery. This is calculated by subtracting the amount of the reimbursement sought from the total recovery, as well as the attorney’s fees and case expenses. If the remaining amount is less than the value of the plaintiff’s damages, then the client was not fully compensated and there is no right to reimbursement.

Impact of ERISA

While O.C.G.A. § 33-24-56.1 provides strong protection for plaintiffs, it does not apply to all health insurance plans. The majority of health insurance in the United States is provided by private employers and regulated by the Employee Retirement Income and Security Act (ERISA). Federal regulations preempt state laws like O.C.G.A. § 33-24-56.1. However, the 11th Circuit recognizes an equitable made whole doctrine unless the ERISA plan explicitly rejects this rule. Cagle v. Bruner, 112 F.3d 1510, 1522 (11th Cir. 1997). See also Adelstein v. Unicare, 31 Fed. Appx. 935 (11th Cir. 2002) and Summerlin v. Georgia-Pacific, 366 F.Supp.2d 1203 (M.D. Ga. 2005). Practitioners must review the plan documents to determine whether the made whole doctrine applies.

Conclusion: Implications for Practitioners

The new changes to the Georgia medical liens statute answer some questions but open the door to many more challenges. For attorneys handling personal injury cases, it is crucial to stay informed about these changes and be prepared to navigate the complexities of medical provider liens and Workers’ Compensation subrogation liens.

Practical Strategies for Attorneys

Early Communication and Documentation

Attorneys should send coverage letters to all providers as soon as they have coverage information. This proactive approach ensures that providers are aware of available insurance and can file claims within the required timeframes, potentially preventing the enforcement of liens.

Negotiating with Medical Provider and WC Lien Claimants

When negotiating with lien claimants, it is essential to understand and leverage the nuances of the lien statutes and recent legal changes. Emphasizing the exclusion of non-economic damages and ensuring that health insurance claims are filed and rejected can strengthen the argument against enforcing the lien.

Handling VA and TriWest Claims

For clients receiving care from the Department of Veterans Affairs (VA) or through TriWest, it is essential to follow specific procedures for requesting and paying medical bills. According to the “Guide to Requesting VA Bills” and TriWest FAQs:

• VA expects payment in full by check to the Department of Veterans Affairs and sent to the VA’s Office of General Counsel Collections National Practice Group.
• For TriWest claims, providers should submit medical documentation to the VAMC and then submit claims to TriWest’s claims processor, PGBA.

Final Thoughts

Navigating Georgia medical liens in personal injury settlements requires a comprehensive understanding of the relevant statutes, recent legal changes, and practical strategies for effective negotiation. By leveraging the made whole doctrine and recent statutory amendments, attorneys can better protect their clients from unjust liens and ensure fair compensation for their injuries. Staying informed about these legal nuances and proactively managing claims and documentation are key to successful settlement outcomes. If you have questions about the hospital lien laws, please contact Battle Law, PLLC.