News & Press

Washington Adopts Changes to the Medical Lien Statute

FOR IMMEDIATE RELEASE

May, 2015

House Bill 1503 was proposed by a bipartisan group of State Legislators, and introduced on January 21, 2015. This bill modifies Washington’s Medical Lien Statute. Specifically, 1503 modified RCW 60.44.020 (defining who can file a lien for medical services), 60.44.060 (the enforcement section), and RCW 19.16.100 (concerning collection agencies). The changes proposed stemmed from large medical providers, notably some hospitals, contracting with out-of-state companies to collect in third-party claims by using the medical lien statute, and not billing to health insurers, Medicare, or Medicaid where available. The intent of the authors was to protect consumers from these practices and abuse of the lien statute.

As many of our healthcare provider friends know, GLP opposed the bill as originally written.  We knew that the chiropractors, physical therapists, massage therapists, naturopaths, acupuncturists and other health care providers we work with on personal injury cases rely on the lien statute to treat patients without insurance that have been injured as a result of a third party.  We knew that the lien statute was of benefit to the small business owners we work with, and is certainly not abused by them.  We knew the proposed changes might prevent some personal injury victims from getting medical care.

As originally written, HB 1503 would change the law so that any provider that wished to file a medical lien would be required to first register as a collection agency. It would have also set in place penalties for not filing a Satisfaction of Lien once payment was received.  In addition to encouraging the healthcare community to reach out to our legislators, GLP took more direct action. GLP’s team reviewed the proposed bill and, through one of our Seattle paralegals (and Seattle City Council candidate) Michael Maddux, connected with a co-sponsor of the bill to discuss concerns on the impact this would have on injured patients and small business healthcare providers we work with.

On the advice of the co-sponsor, Mr. Maddux continued this conversation with a member of the judiciary committee, and was invited to submit proposed changes to the bill that would protect small business healthcare providers, and ensure that the intent – protecting patients from companies that are ultimately collection agencies – remained intact. The legal team at GLP collaborated on some amendments that ensured injured persons and small businesses healthcare providers were protected, and submitted these proposed amendments. We are excited to report that amendments made to the bill accomplished our objectives.

As amended, HB 1503 continues to allow medical liens filed by medical providers directly, and only requires a company be licensed as a collection agency if they are filing the lien on behalf of the provider. This is further codified in the collection agency section, with language specifically excluding “the person or entity originally entitled to the lien” from having to be a licensed collection agency.  Also as amended, a healthcare provider now must provide the patient with a Satisfaction of Lien once payment has been received (which the patient can then file with the auditor), versus making it mandatory for the health care provider to directly file the Satisfaction of Lien with the auditor.

GLP was proud to lobby on behalf of consumers, and with clear information on the potential adverse impact on small business healthcare providers of the original bill, support a final bill that met the needs of all involved.

What this means for you:

The applicable changes take place 90 days after the end of session, or July 23, 2015. By that date, healthcare providers that use medical liens will need to:

  • Disclose the use of medical liens as part of your billing and collection practices.
  • Within thirty days after payment or settlement of the balance held against the lien, prepare, sign, and deliver a Satisfaction of Lien to your patient.

If your practice prepares and files liens in-house, then there are no other changes. Review your billing practices statements, and make sure that they clearly state that your office may file a medical lien, and what that means for your patient. It is good practice to prepare both a Notice of Lien and a Satisfaction of Lien at the same time, and upon receipt of payment for outstanding balances, date and sign the Satisfaction of Lien and mail to your patient with instructions on filing with the County Auditor.

A copy of the final HB 1503 that was submitted to Governor Inslee and signed into law is available here: House Bill 1503

An updated copy of GLP’s Medical Lien packet can be found here: Medical Lien Packet

GLP is available to answer questions on the changes to the medical lien statutes.  Should you have any questions, please contact one of our attorneys by phone or e-mail. For more information on the GLP Attorneys North Sound offices, contact Melissa Clements, Communications Director at 800.422.4610; for more information on the GLP Attorneys South Sound offices, contact Scott Nelson, Communications Director at 800.273.5005.

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