Colorado State Law Protects Injured Persons from Premature Liens from Hospitals

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The Supreme Court of Colorado examined the interplay between Colorado’s hospital lien statute, § 38-27-101, C.R.S. (2020) (the “Lien Statute”), and the federal Medicare Secondary Payer statute, 42 U.S.C. § 1395y (2021) (the “MSP Statute”). Specifically, it needed to decide whether, under the Lien Statute, a hospital must bill Medicare before it can file a lien against a patient who has been injured in an accident and whose primary health insurance is provided by Medicare. In Peggy Harvey v. Catholic Health Initiatives d/b/a Centura Health-St. Anthony Hospital and Centura Health Corporation, Eileen Manzanares v. Centura Health Corporation a/k/a Catholic Health Initiatives Colorado, d/b/a St Mary-Corwin Hospital of Pueblo, Colorado, d/b/a Centura Health-St Mary Corwin Medical Center, Nos. 20SC261, 2021 CO 65, 20SC784, Supreme Court of Colorado, En Banc (September 13, 2021) the Supreme Court resolved the dispute.

ZALMA OPINION

The Lien Statute in Colorado was enacted to protect accident victims from abuse by hospitals that asserted liens against patients immediately upon discharge even though they were insured by Medicare, Medicaid or casualty insurance. The Supreme Court confirmed the intent of the statute to protect patients from abuse and required that the hospital bill Medicare and any available casualty insurance before asserting a lien. The hospital, therefore, has no right to abuse a patient who is insured, even if insured by federal Medicare or Medicaid.