§ 10.4.2 STATUTORY HEALTHCARE PROVIDER LIENS

• Jurisdiction: Arizona

§ 10.4.2 Statutory Healthcare Provider Liens

Arizona has a Healthcare Provider Lien statute, A.R.S. §§ 33-931 to 33-936, providing a mechanism for certain healthcare providers to unilaterally impose a lien against an injured person's third-party personal injury claim. A.R.S. § 33-931(A). The underlying purpose of this statute is to "'lessen the burden on hospitals and other medical providers imposed by non-paying accident cases.'"² Blankenbaker v. Jonovich, 205 Ariz. 383, 388 ¶ 19, 71 P.3d 910, 915 (2003) (quoting LaBombard v. Samaritan Health Sys., 195 Ariz. 543, 548 ¶ 18, 991 P.2d 246, 251 (App. 1998)) (emphasis added).

a. The Scope of Statutory Healthcare Provider Liens

The Healthcare Provider Lien statute creates a limited remedy, not available at common law, for healthcare providers who properly perfect a lien to recover unpaid bills for services rendered to an injured person in connection with a related third-party personal injury claim. See A.R.S. § 33-931(A); Blankenbaker, 205 Ariz. at 387-88 ¶ 19, 71 P.3d at 914-15. The scope of a healthcare provider lien is defined by (i) the existence of an obligation to a healthcare provider for medical services related to an injury caused by a tortfeasor; (ii) the provider's "customary charges" for those services; and (iii) the resolution of a third-party personal injury claim.

i. Existence of an Obligation to a Healthcare Provider

To enforce a healthcare provider lien, the lienholder "must establish the . . . underlying obligation." Blankenbaker, 205 Ariz. at 387, 71 P.3d at 914 n.5 (emphasis added). "In the absence of an obligation to be secured there can be no lien." Matlow v. Matlow, 89 Ariz. 293, 297-98, 361 P.2d 648, 651 (1961) (emphasis added).

ii. Customary Charges

Notwithstanding the amount of unpaid bills owed to a healthcare provider, healthcare provider liens only secure a healthcare provider's "customary charges" for lien-related services. See A.R.S. § 33-931(A). The term "customary charges" acts as a cap; "it prevents the lien from being an amount greater than what the provider typically charges other patients for the services that it provided to the injured party." Midwest Neurosurgery, P.C. v. State Farm Ins. Cos., 686 N.W.2d 572, 579 (Neb. 2004).

Customary charges are not necessarily the same as billed charges. "Customary charges" are the amounts "commonly" or "habitually" accepted by a healthcare provider that "may indeed be lower than its 'billed charges.'" LaBombard v. Samaritan Health Sys., 195 Ariz. 543, 552 ¶ 34, 991 P.2d 246, 255 (App. 1998) (emphasis added).

iii. Third-Party Personal Injury Claims

A healthcare provider lien extends to "claims of liability or indemnity . . . on account of the injuries that gave rise to the claims and that required the [medical] services." A.R.S. § 33-931(A) (emphasis added). By the express...