Health-care Provider Liens For Injured Persons

The act establishes requirements for the creation and assignment of a health-care provider lien for a person injured in an accident. A health-care provider lien is a lien related to charges for health care provided to a person injured by the negligence or wrongful act of another person, which is asserted against money the injured person may receive from a personal injury claim or uninsured motorist claim.

A health-care provider or the health-care provider's assignee creating a lien must advise the injured person of their options for payment, including the use of benefits from an insurance plan. In addition, the provider or assignee must provide additional disclosures about the lien, including how the health-care provider's assignee is compensated and of any common ownership interests among the lien holder and the injured person's health-care providers or legal counsel. The injured person must also be advised that, except in the case of fraud or misrepresentation:

• If the injured person does not receive a judgment, settlement, or payment on the injured person's claim, the injured person is not liable for any amount of the lien;
• If the injured person receives a net judgment, settlement, or payment that is less than the amount of the lien, the injured person is not liable for any amount over the amount of the net judgment, settlement, or payment; and
• The lien holder cannot assign the lien to a collection agency.

The act requires that a health-care provider lien cannot include additional finance charges or interest and must be limited to the total of the usual and customary charges billed by health-care providers. In the absence of fraud or misrepresentation:

• If the injured person does not receive a judgment, settlement, or payment on the injured person's claim, the injured person is not liable for any amount of the lien;
• If the injured person receives a net judgment, settlement, or payment that is less than the amount of the lien, the injured person is not liable for any amount over the amount of the net judgment, settlement, or payment; and
• The lien holder cannot assign the lien to a collection agency.

A health-care provider or its assignee must comply with the provisions of the act to have a valid health-care provider lien. If a court determines that a health-care provider or its assignee knowingly failed to comply, the injured person may seek a ruling from the court concerning which portions of the lien, if any, the health-care provider or assignee cannot recover.

Except in an action under the "Uniform Consumer Credit Code", when a lien is assigned, the amount paid for the assignment, the fact of the assignment, and the terms of the assignment are not admissible as evidence in the underlying personal injury action.

The holder of a health-care provider lien may file a record of the lien in accordance with the "Colorado Statutory Lien Registration Act". If more than one health-care provider lien has been asserted against an injured person's net judgment, settlement, or payment for the same accident or incident, a lien for which a record has been filed has priority for payment out of the injured person's net judgment, settlement, or payment over a lien for which no record is filed. If records are filed for more than one health-care provider lien for the same accident or incident, priority is determined by the date on which the record was filed, with the lien with the earliest date of filing having first priority. Filing a record is optional and does not waive any other provisions of the act.

(Note: This summary applies to this bill as enacted.)