Hospital lien doesn’t reach uninsured motorist insurance

The Missouri Court of Appeals Western District ruled Feb. 25 that a hospital can’t claim a portion of a settlement that an injured patient received from his own insurer.

In 2017, Ozell Lincoln’s truck was struck head-on by another vehicle in Kansas City. The driver and passenger in the vehicle fled and were never identified.

Lincoln was treated at Truman Medical Center in Kansas City, incurring $176,550 in medical bills. The hospital sought to recover that money by asserting a lien against Lincoln’s insurer, Progressive Casualty Insurance Co. Lincoln received a $300,000 settlement under his uninsured motorist policy. None of it was paid to the hospital.

Truman sued Progressive in Jackson County Circuit Court, alleging that the insurance company was liable for Lincoln’s unpaid medical bills. Judge John Torrence, however, granted summary judgment to the insurer, finding that a so-called “hospital lien” didn’t extend to Lincoln’s uninsured motorist benefits.

The Western District agreed. Under Section 430.235 of the Revised Statutes of Missouri, hospitals can seek to recover the cost of care from the claims that the injured person has “against the person or persons causing such injury for damages on account of such injury.”

Judge Alok Ahuja, writing for the court, said the statute clearly was aimed at insurance coverage for the person who caused the injury, not insurance for the injured person himself.  Uninsured motorist coverage insures the injured party, not the tortfeasor, he added.

“We see no indication in the hospital lien statutes that the lien extends to rights an injured person may have under first-party insurance coverage which they, their family, or their employers may have procured for the injured person’s benefit,” Ahuja wrote. Judges Lisa White Hardwick and Mark D. Pfeiffer concurred.

The hospital lien statute dates to 1981 and exists to encourage medical providers to render care without considering the patient’s ability to pay. Ahuja noted Truman’s argument that extending the lien to uninsured motorist coverage would advance that policy.

“But whatever the statutes’ purposes, we are bound to apply their plain language,” he wrote.

Bill Colby, the general counsel for Truman Medical Center, said asserting a lien under these circumstances is unusual. He noted that the hospital provided about $150 million worth of uncompensated care last year.

“We just thought this case was a decent test case,” he said. “We have to be good stewards of public money.”

The hospital was represented on appeal by Brian J. Gordon of the Centurion Law Office in Gower.

Brette S. Hart and Matthew W. Greenberg, of Harris & Hart in Overland Park, Kansas, which represented the insurer, couldn’t be reached for comment.

The case is Truman Medical Center Inc. v. Progressive Casualty Insurance Co., WD82762.