Court Reviews the Validity and the Payment of a Hospital Lien

SHELBY COUNTY HEALTH CARE CORPORATION, D/B/A REGIONAL MEDICAL CENTER v. JOHN BAUMGARTNER, ELIZABETH BAUMGARTNER, A/K/A DARAY BAUMGARTNER, NATIONWIDE MUTUAL INSURANCE COMPANY, AND HARTFORD ACCIDENT AND INDEMNITY (Tenn. Ct. App. January 26, 2011)

This appeal involves the impairment of a hospital lien. The individual defendant was treated at the plaintiff hospital for injuries sustained in an automobile accident caused by a third-party tortfeasor. The patient incurred substantial medical expenses. The hospital filed a hospital lien for the amount of the patient's medical expenses.

Subsequently, the patient received insurance proceeds from his own insurance company under his uninsured motorist coverage, and another payment from the tortfeasor's insurance company. Nothing was paid to the plaintiff hospital. The hospital filed this lawsuit against both insurance companies for impairment of its hospital lien. The parties filed motions for summary judgment.

The trial court granted in part the hospital's motion for summary judgment. Against the patient's own insurance company, the hospital was awarded one-third of the monies the patient received. Against the tortfeasor's insurance company, the hospital was awarded an amount equal to the policy coverage limit.

The hospital now appeals, arguing that it was entitled to recover from both insurance companies jointly the reasonable cost of the hospital services rendered to the patient. The insurance companies also appeal, arguing that there was no impairment of the lien and that, if there was impairment, the hospital's recovery should have been limited to one-third of the payments made to the patient. We affirm in part and reverse in part, finding that the hospital's lien was valid and was impaired, but that the hospital can recover only for the damages caused by the impairment of its lien.

Opinion available at:
http://www.tba2.org/tba_files/TCA/2011/baumgartnerj_012611.pdf