Lien against future settlements one collection remedy

Contract Language. By Steven M. Harris, AMNews contributor. April 2, 2007.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

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Understandably, physicians often don't want to seem too aggressive about collecting outstanding bills from patients. Sometimes a patient has a legitimate reason for falling behind on bills, or the physician doesn't want to risk word-of-mouth from that patient calling the doctor a cheapskate or somehow uncaring.

But if a patient isn't paying because he tells you he is suing someone for causing him the injury or illness that brought him in for his latest visit, a physician doesn't have to be so demure when it comes to collections.

In many states, a physician is allowed to put a lien against any future settlement that comes out of that lawsuit. Or, a physician might be able to enter into a contract with a patient allowing the doctor to put a lien on whoever is responsible for his payment after the case is settled or decided.

The lien, which can be sent to the defendant, the defendant's attorney and the plaintiff's attorney, would include the amount of reasonable charges for services rendered. The lien ensures that your name is on the settlement check, or that a check is cut once a settlement is made. A physician's lien increases the chances that you will get payment at some point for your work.

It is imperative to first check with a lawyer to determine whether your state recognizes physicians' liens, through a statute, common law or by contract. Once you have determined that your state has such a statute, you must strictly follow the statute's requirements. Or if your state allows physicians to enter into contracts with patients, you must ensure to include all appropriate contractual provisions so that you have a valid, enforceable lien in the proceeds of the personal injury action.