HB316 By Representative Johnson (R) RFD Judiciary Rd 1 24-FEB-16

SYNOPSIS: This bill would provide a lien for sums recovered as damages for personal injury in any civil action for health care services rendered to the plaintiff.

A BILL TO BE ENTITLED AN ACT

Relating to damages recovered for personal injury in civil actions; to provide a lien under certain conditions for health care services rendered to the plaintiff.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. (a) This act may be cited as the Health Care Services Lien Act.

(b) For purposes of this act, the following words have the following meanings:

(1) HEALTH CARE PROFESSIONAL. Any individual in any of the following license categories: A licensed physician, licensed chiropractor, licensed dentist, licensed optometrist, licensed orthotist, licensed prosthetist, or licensed physical therapist.

(2) HEALTH CARE PROVIDER. Any entity in any of the following license categories: A licensed home health agency, licensed durable medical equipment provider, licensed long-term care facility, or licensed emergency medical service personnel.

Section 2. (a) Subject to subsection (b), after the effective date of this act, a lien is created upon any sums recovered as damages for personal injury in any civil action in this state in favor of any person, corporation, state entity, municipal corporation, or county to whom the person recovering or the person on whose behalf the recovery has been made, may be indebted for any drugs, medical supplies, orthopedic supplies, supplementations, devices, durable medical equipment, ambulance services, services of any physician, chiropractor, dentist, or nurse, including treatment or maintenance, rendered in connection with the injury in compensation for which the damages have been recovered. Where damages are recovered for and on behalf of a minor or a person who is mentally incompetent, the lien shall attach to the sum recovered as fully as if the person was not a minor or a person who is mentally incompetent.

(b) A lien is created under subsection (a) only if the person entitled to the lien gives written notice of the lien to the attorney or other third party representing the person on whose behalf the claim for personal injury is made and furnishes, upon request and without charge, an itemized statement or medical report to the attorney for the use of the attorney in the negotiation, settlement, or trial of the claim. The lien shall include a written notice containing the name and address of the injured person, the date of the injury, the name and address of the health care professional or health care provider, and the name of the party alleged to be liable to make compensation to the injured person for the injuries received. Service shall be made by registered or certified mail or in person.

(c) This act does not provide for a lien based on treatment, care, or services provided under the Workers' Compensation Act.

(d) No action shall lie against any clerk of court or any surety on any clerk's bond to recover any claim based upon a lien created under subsection (a) when recovery has been had by the person injured, no claim against the recovery was filed with the clerk, and the clerk has otherwise disbursed according to law the money recovered in the action for personal injury.

Section 3. (a) A lien as provided in Section 2 shall also attach upon all funds paid to any person in compensation for or settlement of the injuries, whether in litigation or otherwise. If an attorney represents the injured person and the lien is perfected as provided under Section 2 before disbursement of the funds, any person that receives the funds shall retain a sufficient amount to pay the lien. Notwithstanding the foregoing, neither this section nor Section 2 shall be construed to interfere with any amount due to an attorney for his or her services.

(b) A lien created in this act may not exceed 50 percent of the verdict, judgment, award, settlement, or compromise less attorneys' fees. To the extent that more than one health care professional perfects a lien, each lienholder is entitled to a prorated share, not to exceed 50 percent less attorneys' fees, of the verdict, judgment, award, settlement, or compromise.

(c) A client's instruction for the disbursement of settlement or judgment proceeds is not binding on the disbursing attorney to the extent that the instruction conflicts with this act.

(d) A judgment, award, settlement, or compromise secured by or on behalf of an injured person may not be satisfied without the injured person or his or her authorized representative first giving notice of the judgment, award, settlement, or compromise to the health care professional or health care provider that rendered a service in the treatment, care, or maintenance of the injured person and that has served a lien notice. The notice shall be in writing and served upon the lienholder or, in the case of a lienholder operated entirely by a unit of local government, upon the individual or entity authorized to receive service.

(e) The lien of a health care professional or health care provider under this act, from and after the time of the service of the lien notice, shall attach to any verdict, judgment, award, settlement, or compromise secured by or on behalf of the injured person. If the verdict, judgment, award, settlement, or compromise is to be paid over a time by means of an annuity or otherwise, any lien under this act shall be satisfied by the party obligated to compensate the injured person to the fullest extent permitted under this act before the establishment of the annuity or other extended payment mechanism.

Section 4. (a) Notwithstanding any confidentiality agreement entered into between an injured person and the payor of proceeds in settlement of compensation for injuries, upon the written request of a lienholder and the holder's written agreement to be bound by any confidentiality agreement regarding the contents of the accounting, a person distributing funds to the holder in an amount less than the amount claimed by the holder shall provide to the holder a certification with sufficient information to demonstrate that the distribution was pro rata and consistent with this act. If the person distributing settlement or judgment proceeds is an attorney, the accounting required by this section is not a breach of the attorney-client privilege.

(b) A certification under subsection (a) shall include a statement of all of the following:

(1) The total amount of the settlement.

(2) The total distribution to lienholders, the amount of each lien claimed, and the percentage of each lien paid.

(3) The total attorneys' fees.

(c) Nothing in this act shall be construed to require any person to act contrary to the requirements of the Health Insurance Portability and Accountability Act of 1996, P.L. 104-91, and regulations adopted pursuant to that act.

Section 5. Whenever the amount demanded for medical services or hospital fees is in dispute, nothing in this act shall compel payment thereof until the claim is fully established and determined, in the manner provided by law. Whenever the amount of a bill is in dispute, the lien may not exceed the amount in dispute.

Section 6. Nothing in this act shall be construed as limiting the right of a health care professional or health care provider, or attorney, to pursue collection, through all available means, of its reasonable charges for the services it furnishes to an injured person. Notwithstanding any other provision of law, a lienholder may seek payment of the amount of its reasonable charges that remain not paid after the satisfaction of its lien under this act.

Section 7. This act shall not affect any claim of subrogation for the payment of health care services.

Section 8. This act shall become effective the third month following its passage and approval by the Governor, or its otherwise becoming law.

Civil Procedure

Health

Liens

Damages

Attorneys

Chiropractors