Arizona’s Updated Health Care Provider Lien Laws

Introduction

Arizona’s health care provider lien laws were updated in 2022. A.R.S. § 33-931 establishes certain procedures for health care providers to place a lien on third-party judgment, settlement or award for medical services rendered by a hospital or health care institution. It also provides for limitations on a health care providers ability to assert a lien on certain forms of recovery an injured person may receive. A.R.S. § 33-937 is an addition to the statutory lien scheme. It imposes a requirement that all interested parties compromise any lien or assignment granted pursuant to A.R.S. § 33-931.

A.R.S. § 33-931

A.R.S. 33-931 provides that a health care provider is entitled to a lien on personal injury recovery for the value of its services. A health care provider may assert its lien against all claims of liability or indemnity except health insurance, medical payments coverage, underinsured motorist coverage, and uninsured motorist coverage. A lien pursuant to this section extends to all claims of liability or indemnity, except that one-third of any third party judgment, settlement or award is exempt from any assignment authorized by this section. Notably, this section also provides that “one-third of any third-party judgment, settlement or award is exempt from any lien or assignment authorized by this section.” A.R.S. § 33-931(E)(1). This exclusion comes with exceptions. For example, if the injured person and the health care provider have a written and signed document stating that they elect not to use any coverage potentially available under a health insurance or similar medical benefit plan that covers the injured as an insured or dependent, then the one-third exclusion may not apply. See A.R.S. § 33-931(E)(3)(d).

A.R.S. § 33-937

A.R.S. § 33-937 is a new addition to the health care provide lien laws. It provides that any compromise of a lien must be “fair and equitable to all parties,” and gives a list of eleven factors that a health care provider “shall” consider when determining to what extent it should compromise. The list includes several standard items such as the nature of the patient’s illness, the provider’s customary charges, and total amount awarded by way of judgment or settlement agreement; however, it also includes a catch-all for “any other factor relevant to a fair and equitable settlement under the circumstances.” This provision provides welcomed flexibility in terms of what can be considered when compromising liens on health care providers’ services to injured persons.