What Is a Hospital Lien?

Posted on March 26, 2025 writen by Jane Paulson in Medical Malpractice

When you’re injured due to medical malpractice, hospitals may seek reimbursement for the medical services by asserting a hospital lien. But what is a hospital lien exactly? This legal claim allows medical providers to secure payment from any compensation you receive through a settlement or judgment related to your injury. 

Navigating the complexities of hospital liens requires specialized knowledge. At Paulson Coletti Trial Attorneys PC, we offer that expertise, ensuring our clients are supported throughout the process.

How Does a Hospital Lien Work?

In Oregon, hospitals can place a lien on the compensation they receive from a personal injury claim to ensure they are paid for their services. To perfect such a lien, the hospital must adhere to specific procedures:

Filing a Notice of Lien

In Oregon, hospitals have the legal right to impose a lien on the compensation awarded in a personal injury claim to secure payment for their services. To properly establish a hospital lien, specific legal steps must be followed, as outlined in Oregon Revised Statutes (ORS) 87.565.

Serving the Notice

Before any judgment, award, settlement, or compromise, the hospital must serve a certified copy of the notice by registered or certified mail to:

• The person alleged to be responsible for causing the injury, or
• Their insurance carrier, if known.

Ensuring Compliance

The lien must be according to Oregon law so that the claim does not exceed the reasonable value of the medical care. Failure to comply may lead to challenges to the lien’s validity.

When Can a Hospital Place a Lien on Your Settlement?

Hospitals can assert a lien when you pursue damages from the party responsible for your injury. The lien attaches to any sum awarded to you by judgment, award, settlement, or compromise, covering the reasonable value of medical treatment provided before the resolution of your claim. This ensures that hospitals receive payment directly from the funds you recover. 

Knowing what is a hospital lien within this specific situation allows you to better predict its potential impact on your financial outcome.

How a Hospital Lien Affects Your Personal Injury Claim

Reduction of Settlement Proceeds

The lien amount is deducted from your compensation, decreasing the available funds, which can considerably affect your financial recovery and capacity to pay other expenses related to your injury.

Negotiation Leverage

Hospitals may use the lien as leverage to ensure payment, potentially affecting the timing and amount of your settlement and putting added pressure on claimants to resolve their cases quickly. This can create financial stress, particularly for those facing ongoing medical expenses and lost income while awaiting compensation.

Priority of Payment

Liens typically take precedence over other debts, meaning they are paid first from any settlement or judgment. This could potentially leave victims with little to cover additional medical costs or lost wages.

Financial Burden on Victims

Many victims of medical malpractice may struggle to cover expenses while waiting for their case to be resolved, making legal guidance essential in protecting their financial recovery.

Can You Negotiate or Remove a Hospital Lien?

Yes, it is possible to negotiate or even remove a hospital lien under certain circumstances:

• Negotiation: Hospitals may agree to reduce the lien amount, especially when the settlement is insufficient to cover all expenses. Sometimes, they may accept a partial payment, ensuring quicker resolution and avoiding further legal disputes.
• Procedural Errors: Failure to follow the proper procedures in filing or serving the lien might result in invalidation. Missing deadlines or filing incorrect documentation can be grounds for entirely disputing the lien.
• Hardship Considerations: Some hospitals may reduce liens if the patient faces significant financial hardship and cannot pay the full amount. Demonstrating an inability to cover living expenses or ongoing medical care may strengthen your case for a lien reduction or waiver.

Failure to file the notice of lien within the required 30-day period after discharge allows the lien to be challenged.

How an Attorney Can Help Protect Your Settlement

Navigating hospital liens requires legal expertise. At Paulson Coletti Trial Attorneys PC, we can:

• Review Lien Validity: Assess whether the hospital adhered to all legal requirements when filing the lien.
• Negotiate Reductions: Engage with the hospital to reduce the lien amount, maximizing your net recovery.
• Advise on Legal Options: Guide contesting invalid liens and protecting your rights throughout the process.

Understanding what is a hospital lien and how it affects your settlement is crucial to protecting your financial recovery. Our experienced team is dedicated to protecting your interests and ensuring you receive the compensation you deserve. Contact us for a free consultation.