Georgia Supreme Court Sides with Hospitals in Lien Battle

Drawing to a close a protracted battle over Georgia’s hospital lien statute, the Georgia Supreme Court issued an opinion on June 29, 2020, siding with Georgia’s hospital community.  The class action case involved allegations by patients who claimed that hospitals charged them unreasonable rates for their medical care, which rates the hospitals then used as a basis for filing hospital liens against any potential tort recoveries by the patients.  The Court of Appeals would have allowed the class plaintiffs to pursue claims for fraud against the hospitals based on the difference between the discounted amount patients usually pay for similar services and the amount of the liens recorded by the hospitals.  With a number of copycat cases pending in trial courts around the state, the potential liability for Georgia’s fragile hospital community could have been devastating.

Arnall Golden Gregory submitted a friend-of-the-court brief on behalf of the Georgia Hospital Association (GHA) and the Georgia Alliance of Community Hospitals (GACH), urging the Supreme Court to reject the Court of Appeals’ analysis.  In a unanimous opinion, the Supreme Court accepted the argument we developed on behalf of GHA and GACH.  The Court held that Georgia hospitals’ long held practice of perfecting liens in an amount “claimed to be due” based upon the hospitals’ published chargemaster rates is consistent with the Hospital Lien Statute at O.C.G.A. § 44-14-470.  The Hospital Lien Statute benefits patients and hospitals alike, allowing patients who have been injured in car and other accidents by negligent third parties to receive treatment at a hospital without concern that the hospital will try to collect against the patient directly.  Instead, the Statute allows hospitals to file a lien against the patients’ potential recovery from negligent third parties or, more commonly, the third parties’ insurers.  By filing a verified statement setting forth “the amount claimed to be due” within 75 days of a patient receiving treatment, a hospital perfects a lien for its “reasonable charges” as may be determined later.  As the Supreme Court recognized, the amount that the hospital claims to be due for its services need not be exact on the date the lien is filed.  Thus, the Supreme Court concluded that “there is nothing ‘fraudulent’ about [a hospital] using its standard chargemaster rates as ‘the amount claimed to be due for the hospital’ to perfect its lien for its ‘reasonable charges’ against [the patient’s] potential tort recovery.”

The full text of the Supreme Court’s opinion is available here.  

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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