Arizona hospitals can't impose financial liens on patients, court rules

The Arizona Court of Appeals has voided sections of a law that allowed hospitals paid by the state Medicaid program to file financial liens on patients, according to the Arizona Capitol Times.

Seven things to know:

1. Previously, Arizona statutes allowed hospitals paid by the Arizona Health Care Cost Containment System to file financial liens to try to collect more cash by going after money that was owed to the patient.

2. The three-judge panel voided these state statutes in a March 12 ruling. On behalf of the panel, Appellate Judge Diane Johnsen wrote that the statutes and the practice itself violates federal law, according to the Times report.

3. The ruling came after more than 50 patients filed a lawsuit, challenging hospitals that were trying to collect the money that was owed to them.

4. Hospitals said Arizona law allowed them to file a lien on money owed to the patient from a person who was responsible for causing the person's injury, such as in a car accident, according to the report.

5. However, Ms. Johnsen pointed to federal laws and regulations, arguing that regardless of state law, federal law prohibits hospitals from filing a financial lien on patients to collect money the patient may be owed.

6. The judge wrote: "Just as the hospital may not seize a patient's car or impose a lien against the patient's home, the hospital may not use state lien laws to seize the patient's tort recovery."

7. The March 12 ruling also reportedly upholds a trial court decision that prevents hospitals from imposing financial liens on patients in the future.

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