When people are injured in accidents in California and pursue auto accident claims against the other drivers who caused their accidents, their medical providers might place liens against any settlements or awards they might receive in their lawsuits. However, there are limits to the ability of medical providers to place liens against certain types of recoveries. In Dameron Hospital Assn. v. AAA Northern California, Utah, and Nevada Insurance Exchange
, Cal. Ct. App. Case No. C086518, the California Court of Appeal held that a hospital cannot place a lien against an insured’s uninsured or underinsured motorist’s coverage or their medical payments coverage through their auto insurance policies when they have health insurance.
Factual and Procedural Background
Five different people were insured by AAA for automobile insurance. Each of these five individuals was injured in accidents caused by others and sought treatment at Dameron Hospital. The patients were required to sign an agreement with the hospital upon their discharge assigning any UM/UIM or MedPay benefits to the hospital. Each of the five people had UM/UIM and/or MedPay coverage on their auto insurance policies. Dameron requested direct payments from the patients’ auto insurance carriers at the hospital’s full rates. However, AAA evaluated the bills sent by the hospital and paid significantly lower rates than what the hospital had billed. The auto insurer paid the balances to the insureds, and the hospital filed a lawsuit against the insurance company to recover the difference.