The California Supreme Court ruled that hospitals that agree to accept an injured patient's insurance as payment in full cannot seek to recoup additional costs by putting a lien on any award or settlement the patient receives because of the injury. The case was filed against San Joaquin Community Hospital, Bakersfield, Calif., by Joel Parnell, who was treated at the hospital after a car accident. Although Parnell amassed a $20,000 bill during his weeklong stay, the hospital accepted $5,000 as payment under a pre-negotiated contract with Parnell's insurer. After Parnell won $15,000 in a personal-injury lawsuit against the man who caused the accident, the hospital put a lien on the award.
Parnell sued the hospital, arguing that it was abusing a 44-year-old state law that generally allows hospitals to sue or take other measures against uninsured patients who don't pay their bills. In a unanimous decision, the justices ruled that the $5,000 collected by the hospital amounted to payment in full. "Because Parnell no longer owes a debt to the hospital for its services, we conclude that the hospital may not assert a lien ... against Parnell's recovery," Justice Janice Rogers Brown wrote for the court. -- by Laura B. Benko