The Utah Supreme Court recently issued Bryner v. Cardon Outreach, LLC, 2018 UT 52 (September 24, 2018). Without arguing the merits of the decision, or whether the Utah Supreme Court got it right, I focus here on the practical impact this case may have moving forward. Further, I suggest a legislative solution is necessary to remedy the ruling and its effect on personal injury litigation in Utah.
Hospital liens have always been a source of difficulty when settling personal injury cases. From the defense perspective, the liens are often so large (even if only proportionally) they make meaningful settlement discussions difficult (and sometimes impossible). From the Plaintiff's perspective, they present issues of fairness, equity and reality.
Whether you're on the defense or the Plaintiff's side of the case, this is a growing concern.
Does the Health Insurance Company/Collection Agent know (or even care) that of the amount asserted in the lien only a portion of the lien amount is reasonably related to the accident to which the lien is attached? Has the hospital's collection department factored in the difficult liability issues inherent in the case? Does the collection department for the hospital have a vested interest - a stake in the litigation process? What happens if that case goes to trial and the defense prevails and the hospital's patient gets nothing?
Settlement opportunities present themselves often in personal injury cases; however, for the attorneys, the claim handler and the injured party, these opportunities are sometimes missed because the Hospital Lien holder takes an untenable position. Thus, when the opportunity to settle presents itself and you're dealing with an obstinate health insurance lien holder who insists on collecting 100% of the lien amount, what do you do?
Whether it be causation or liability, Bryner v. Cardon Outreach will make dealing with these collection entities more difficult than it was before. That's saying something.
The Utah Supreme Court rejected the oft cited, and oft relied upon logic that the health insurance company cannot sit back, do nothing (risk nothing), assert a large lien on the settlement proceeds, and then refuse to reduce its lien to reflect the actual cost of the attorneys's fees/costs incurred to obtain the settlement fund. In short, the hospital's patient (and attorney) does all of the work to create the settlement fund only to have the health insurance company, through its collection agency, refuse to contribute to the fees and costs to obtain that fund.
Bryner v. Cardon Outreach makes clear the hospital has no obligation to pay any of the associated costs of obtaining the settlement fund. According to the Court, the Hospital Lien Statute does nothing more than create a priority system to distribute those settlement funds. The hospital lien is to be paid in full after the attorney's fees and costs are paid from the fund.
This article is not intended to attack the Utah Supreme Court's logic or reasoning; however, if the Hospital Lien statutes is nothing more than a priority setting scheme and the health insurance company is allowed to sit back, do nothing, and then refuse to reduce its interest to reflect the work done on the case or the difficult legal issues raised in the case, then this decision makes it more difficult for the patient, the patient's lawyer, and the insurance company to effectively deal with these issues.
My suggestion is that it's time to re-vamp the Hospital Lien statute and to force the health insurance company/collection agency to take a stake in the litigation process. Perhaps that is the message to take from Bryner, not all appellate decisions make the process more clear; rather, they highlight problems with how the statute was drafted. Thus, calling upon the interested parties to seek legislative remedies.
Whatever side you're on, this case is surely going to have an impact on how you deal with Hospital LIens, at least until the legislature can address and force the health insurer to take a stake in the litigation.
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