HEALTHCARE LIEN MEMO & FORMS
Peick Law Group, P.S.
425-462-0660
Page 1
John Peick
NOTICE OF CLAIM OF HEALTHCARE PROVIDER LIEN
FREQUENTLY ASKED QUESTIONS
WHY DO I NEED TO FILE A LIEN?
To give you a better chance of recovering payment for your services. RCW 60.44 provides a
mechanism to help insure health care providers obtain payment for their goods and services
rendered to a person suffering from traumatically induced injuries. A lien creates a priority right to
payment out of a specific property or fund, notably a monetary claim, right of action or money. The
fund in the case of health care providers is generally either a direct insurance claim or personal
injury settlement.
WHO IS AFFECTED BY THE LIEN?
The lien is upon any claim, right of action or money to which your patient is entitled against the at
fault party (tortfeasor). Accordingly, anyone with control over payment of such claim or monies,
(adjusters or attorneys)who is given notice of the existence of a valid lien, would be affected by the
lien filing.
WHAT ARE THE CONSEQUENCES OF IGNORING THE LIEN?
If a person having control over the payment of funds to your patient arising from a claim or right of
action against the tortfeasor, knowing of the valid lien, ignores the lien and pays out the monies to
other parties, including the patient, they will remain liable to the provider for those misdirected
funds, plus owe the provider reimbursement for the reasonable attorneys fees incurred in collection
activities. If you have been denied payment of your valid lien, call us and we can refer you to a
collection attorney.
WHEN DO I HAVE TO FILE?
The provider must file the lien within 20 days of the date of injury or receipt of care, unless the case
has not settled. If settlement has not occurred, then you can file the lien at any time up to the date of
settlement. You can also re-file the lien to gain an extension of one year, so long as that extended
re-file occurs prior to the settlement of the case.
WHERE DO I FILE?
Peick Law Group
P.S.
A Pacific Northwest Law Firm
1813 - 115th Ave. NE
Bellevue, Washington 98004
Tel. #425-462-0660 Fax. #800-422-1676
HEALTHCARE LIEN MEMO & FORMS
Peick Law Group, P.S.
425-462-0660
Page 2
In order to be valid, your lien must be filed with the county auditor of the county in which the
services were rendered within the time limits noted herein. There are certain formatting
requirements that must be met for your lien document. (See example) These formats may vary from
county to county, so check with your auditor. At the time of this memo, the cost of filing your lien
is $8.00 for the first page, and $1.00 for each successive page. Be sure to call and double-check
these filing fees since they are subject to change. Be sure to send along a copy of the lien with a
SASE envelope and request the Auditor’s office to return the copy marked “Received” for your
records.
While it does not seem required by the statute, it is important that in addition to filing that you send
a copy of the notarized lien to your patient’s attorney, your patient’s insurer, tortfeasor’s attorney
and tortfeasor’s insurance adjuster by return receipt, postage prepaid correspondence. Call to verify
receipt by the adverse carrier and document the name of the person acknowledging receipt.
ARE THERE ANY LIMITATIONS ON FILING THIS LIEN?
Yes. First, the patient must have suffered traumatically induced injuries for which he or she has a
claim or right of action, either PIP, Homeowners, third party liability , UM/UIM, etc. Second, this
lien is inapplicable to Workmen Compensation cases. Third, the accumulated debt for ALL health
care providers for the case cannot exceed twenty-five per cent (25%) of the recovery. This latter
point requires some explanation. Your lien is “security” for your debt. It is not the “debt” itself.
Accordingly, even if your lien rights are limited to 25% of the total recovery, your right to recover
100% of your debt directly from the patient by other means (i.e. debt collection agencies, small
claims court, etc) is preserved unless you sign a release of such debt. However, the persons against
whom the lien is effective, attorneys, insurers, and tortfeasors are immune from further recovery
once they satisfy that 25% of the aggregate recovery. You must also recognize that the statute
purports to limit recovery for ALL healthcare liens to 25%, so if there are multiple providers with
liens, you may find yourselves sharing that 25% share of the recovery. Nevertheless, many
attorneys request providers to sign 100% releases of the patient debt in consideration of paying the
25% of recovery. You are not required to sign that release if you choose not to do so. Stand up for
your rights.
HOW DO I CREATE THIS HEALTHCARE LIEN?
You will need to obtain the following information for the lien itself:
Patient’s Name and address
Tortfeasor’s name and address
Tortfeasor’s Insurance Company
Date of Accident
Place of Accident (address, city, state)
Nature of Injuries Sustained in Accident By Patient
Information you will need to insure proper handling of the lien process:
1. Name and address of patient’s attorney
L-2
HEALTHCARE LIEN MEMO & FORMS
Peick Law Group, P.S.
425-462-0660
Page 3
2. Name and address of tortfeasor’s attorney and/or adjustor
3. Claim numbers for tortfeasor insurance
4. Claim numbers for patient’s insurance
The “claimant” is the healthcare provider. The “tortfeasor” is the person that injured your patient,
also referred to as the defendant.
Formatting of the lien form is important since the Auditor will not accept it for filing without
compliance. The first page must have a 3” margin on the top, and 1” on all sides. Subsequent
pages must have 1” margins on all sides. No information or seals can intrude into this margin
space, EXCEPT the return address can be in the upper left corner of the document inside the 3”
margin. All information must be legible (read typed) and capable of being imaged. There can be
nothing affixed to the pages by tape, staple, etc. Font size must be a minimum of 8 point. The
page must be 8 1/2 x 14 or less. The attached form should be self-explanatory. If there are any
questions, feel free to give us a call.
INSTRUCTIONS FOR UTILIZATION OF LIEN:
1. Fill in all blocks of information.
2. Have physician or corporate officer sign in front of notary public. Remember the notary must see
the document be actually signed or the Notary seal is defective.
3. Call the county auditor and verify the proper formatting for the lien in terms of inches of space
from the top, bottom, right and left. Some counties are very strict about such page formatting and
will reject the filing if not compatible with the requirements.
3. Send to the proper county (county in which patient resides) auditor for recording. Send along
extra copy with return envelope for the auditor to stamp received and mail back. Check with
auditor re filing fees.
4. Send copy of recorded lien to patient, all attorneys of record, and all insurance companies,
including PIP/UIM and adverse carrier involved with claim.
5. Docket in your calendar system 11 months from date of filing a note to renew the lien. They are
only valid for 12 months from date of filing and then lapse automatically. You can always file
another lien so long as the claim has not been settled.
L-3
HEALTHCARE LIEN MEMO & FORMS
Peick Law Group, P.S.
425-462-0660
Page 4
MEMO
FROM: JOHN C. PEICK
TO: Healthcare Providers/Practitioners
RE: Liens and Assignment of Proceeds
There is considerable confusion regarding the difference between properly filing a statutory
healthcare lien, and obtaining an assignment of proceeds from the patient and their attorneys. An
assignment of proceeds has none of the statutory protection of a lien, but conversely is not
limited by the statute limiting providers' recovery to 25.0% of the settlement or judgment
proceeds.
In a perfect world, you would obtain both a healthcare lien, properly filed with the County and
mailed to all participants in the claim, and obtain an assignment of proceeds before embarking
upon an extension of credit for your patients.
Some attorneys have objected to assignments on a variety of grounds. These grounds can be
summarized as follows:
Creates a conflict of interest with the client. There is some merit to this concern, since the
attorney owes a duty to the client, not to the provider. However, this conflict can be eliminated
by clarifying the attorney's role is simply following the client's instructions, and the attorney has
no independent obligation to pay the provider from funds other than the client's share of
proceeds. (See our suggested form) The ABA Model Rules for Professional Conduct do have a
provision requiring attorneys to heed the obligations of their clients to third parties, but
Washington State has not adopted that particular rule. However, the Washington state bar
association has issued a formal opinion (see below) that allows attorneys to guarantee payment
from client’s funds upon client consent.
Creates an obligation to pay client obligations. This is a bona fide concern, and unfortunately,
many of the assignment forms that we see in our practice do not distinguish between the client's
share of proceeds, and the attorney's share of the proceeds payable as fees or reimbursed costs.
The Washington State Bar Association, and the Washington State Supreme Court Rules of
Professional Conduct prohibit attorneys from guaranteeing the obligations of their clients. This
problem can be resolved by clearly delineating the source of the funds for payment to the
provider (See our suggested form
Third Party Determination that Billings Are not Related or Reasonable. This argument
ignores the reality of the marketplace and judicial system by somehow suggesting a jury of
untrained laypersons can be called upon to accurately or scientifically determine the
reasonableness or necessity of healthcare, or the usual and customary charges for such care. The
jury system may be the hallmark of the American system of justice, but there are few plaintiff
attorneys that truly believe the decisions, good or bad from our perspective, are always grounded
in superlative logic and an extraordinary grasp of the factual reality. It is a little disingenuous for
a plaintiff lawyer to take a case to court arguing that all services and billings are appropriate, and
then when the jury fails to buy his or her arguments on that score, expect the provider to take the
L-4
HEALTHCARE LIEN MEMO & FORMS
Peick Law Group, P.S.
425-462-0660
Page 5
short end of the stick. The argument becomes even more strained if it is suggested that IME
results should be used to determine if your bills are appropriate. No plaintiff attorney pays much
attention to the defense experts telling him or her that their client's providers are in error or
charged too much. To do so gives more credibility to such defense experts than they assuredly
deserve. Nevertheless, we provide a dispute mechanism for these attorneys by providing
instructions to interplead the monies in the event of a disagreement. While this may not be
preferable to getting a check immediately, it is preferable to having the attorney send the
disputed funds to his or her client.
Non-Revocable Instructions Cause Conflict. This argument is stretching the ethical argument
somewhat because it is common for clients to give instructions to attorneys that cannot be
revoked once acted upon. Settlement is one good example. If an attorney is authorized to enter
into a settlement, and does so with client permission, and then the client decides to rescind that
approval, settlement rarely is extinguished. Opposing counsel can move to enforce the
agreement if stipulated to in writing or in open court. The client's attorney should be ethically
bound to withdraw from representing the person reneging on the settlement, or at least, I would
do so. Nevertheless, the dispute mechanism in #3 resolves this problem, because it allows a
client to change their mind but to have the funds interplead.
An Assignment Changes the Contingent Fee Contract. This is a variation on #2. Unless there
is a clear delineation of the source of funds for payment to the provider, this concern has some
validity. By delineating client funds, less attorney fees and costs, as the source of funds, this
argument should be moot.
As a last resort, do not extend credit. While you may lose a patient that way, is it preferable to
provide services for which you will not be paid?
L-5
HEALTHCARE LIEN MEMO & FORMS
Peick Law Group, P.S.
425-462-0660
Page 6
REVISED CODE OF WASHINGTON RE HEALTH CARE LIENS
CITATION TITLE
60.44.010 Liens authorized
60.44.020 Notice of lien--Contents--Filing
60.44.030 Record of claims
60.44.040 Taking note--Effect on lien
60.44.050 Settlement of damages--Effect on lien
60.44.060 Enforcement of lien--Payment as evidence
60.44.010 Liens authorized
Every operator, whether private, or public, of an ambulance service or of a hospital, and every
duly licensed nurse, practitioner, physician, and surgeon rendering service, or transportation and
care, for any person who has received a traumatic injury and which is rendered by reason thereof
shall have a lien upon any claim, right of action, and/or money to which such person is entitled
against any tort-feasor and/or insurer of such tort-feasor for the value of such service, together
with costs and such reasonable attorney's fees as the court may allow, incurred in enforcing such
lien: PROVIDED, HOWEVER, That nothing in this chapter shall apply to any claim, right of
action, or money accruing under the workers' compensation act of the state of Washington, and:
PROVIDED, FURTHER, That all the said liens for service rendered to any one person as a result
of any one accident or event shall not exceed twenty-five percent of the
amount of an award, verdict, report, decision, decree, judgment, or settlement.
60.44.020 Notice of lien--Contents--Filing
No person shall be entitled to the lien given by RCW 60.44.010 unless such person shall, within
twenty days after the date of such injury or receipt of transportation or care, or if settlement has
not been accomplished and payment made to such injured person, then at any time before such
settlement and payment, file for record with the county auditor of the county in which said
service was performed, a notice of claim stating the name and address of the person claiming the
lien and whether such person claims as a practitioner, physician, nurse, ambulance service, or
hospital, the name and address of the patient and place of domicile or residence, the time when
and place where the alleged fault or negligence of the tort-feasor occurred, and the nature of the
injury if any, the name and address of the tort-feasor, if same or any thereof are known, which
claim shall be subscribed by the claimant and verified before a person authorized to administer
oaths.
60.44.030 Record of claims
The county auditor shall record the claims mentioned in this chapter in a book to be kept by him
for that purpose, which record must be indexed as deeds and other conveyances are required by
law to be indexed.
60.44.040 Taking note--Effect on lien
The taking of a promissory note or other evidence of indebtedness for any services performed, as
provided in this chapter, shall not discharge the lien therefor unless expressly received as a
payment for such services and so specified therein.
L-6
HEALTHCARE LIEN MEMO & FORMS
Peick Law Group, P.S.
425-462-0660
Page 7
60.44.050. Settlement of damages--Effect on lien
No settlement made by and between the patient and tort feasor and/or insurer shall discharge the
lien against any money due or owing by such tort feasor or insurer to the patient or relieve the
tort feasor and/or insurer from liability by reason of such lien unless such settlement also
provides for the payment and discharge of such lien or unless a written release or waiver of any
such claim of lien, signed by the claimant, be filed in the court where any action has been
commenced on such claim, or in case no action has been commenced against the tort feasor
and/or insurer, then such written release or waiver shall be delivered to the tort feasor and/or
insurer.
60.44.060 Enforcement of lien--Payment as evidence
Such lien may be enforced by a suit at law brought by the claimant or his assignee within one year
after the filing of such lien against the said tort feasor and/or insurer. In the event that such tort feasor
and/or insurer shall have made, payment or settlement on account of such injury, the fact of such
payment shall only for the purpose of such suit be prima facie evidence of the negligence of the tort
feasor and of the liability of the payer to compensate for such negligence.
L-7
HEALTHCARE LIEN MEMO & FORMS
Peick Law Group, P.S.
425-462-0660
Page 8
Formal Opinion: 185
Year Issued: 1990
Question:
What are the ethical duties of a lawyer who guarantees payment, either orally or in writing, on
behalf of a client to a creditor such as healthcare provider, from proceeds of settlement or
judgment?
Discussion:
Frequently, a lawyer representing an injured person in a contingent fee case is requested by a
healthcare provider or other creditor to guarantee payment of the creditor’s claim (not related to
the expenses of the litigation) from the proceeds of any settlement or judgment recovered on
behalf of the client in return for an agreement by the creditor to forego any attempt to collect the
debt in the meantime. At times a creditor such as a healthcare provider may ask the lawyer
and/or the client to sign a lien form or other written "guarantee"; at other times, the creditor may
merely accept the assurances of the lawyer that the debt will be paid from any settlement or
judgment. Assuming that the client consents to such a "guarantee," a lawyer may properly enter
into such an arrangement with the client’s creditor.
The ethical dilemma arises when, after settlement or judgment, the client requests that the
lawyer disburse all proceeds of the settlement or judgment directly to the client, without paying
the creditor.
RPC 1.14(b)(4) requires that a lawyer pay at a client’s request all funds in the lawyer’s
possession which the client is entitled to receive. The question is whether the client is entitled
to receive those funds which the lawyer, with the client’s consent, has guaranteed would be paid
to the creditor.
Before the lawyer may guarantee payment of such funds, or advise a client to sign a lien or
guarantee, the lawyer must explain the matter to the client "to the extent reasonably necessary
to permit the client to make informed decisions regarding" the lien or guarantee. (RPC 1.4(b).
This explanation may be included in the written contingent fee agreement. RPC 1.5(c). The
explanation should include the advice to the client that once the client has authorized payment
of such debts, that authorization is irrevocable by the client. If the client subsequently has a
good-faith dispute as to the amount to be paid, the lawyer should advise the client and the
creditor that the lawyer will continue to hold the funds in trust until the dispute is resolved.
L-8
HEALTHCARE LIEN MEMO & FORMS
Peick Law Group, P.S.
425-462-0660
Page 9
Assuming that the client has been properly advised of the effect of making or signing a guarantee
or lien, and has consented thereto, the Committee is of the opinion that, absent a good-faith
dispute as to the amount of debt claimed by the creditor to be due, the client has authorized
payment of those funds by the lawyer and is no longer "entitled" to disbursal of those funds by
the lawyer. Further, the Committee is of the opinion that failure by the lawyer to honor a
guarantee or lien the lawyer has signed or agreed to in connection with representation of a client
would violate RPC 4.3 where the lawyer has failed to correct a misunderstanding by an
unrepresented person as to the obligation by the lawyer to pay the creditor; and would violate
RPC 4.4, which prohibits a lawyer from using means that have no substantial purpose other
than to burden a third party, in this case by misleading the creditor into believing that the debt
of the client would be paid.
If the lawyer had entered into such a "guarantee" without the client’s consent, then the lawyer
may not withhold the funds from the client if the client requests them. Whether by making such
a "guarantee" the lawyer has obligated himself or herself to the creditor is a legal question on
which the Committee can render no opinion. However, representing to a creditor of a client that
the lawyer had authorization to enter into such an arrangement when the client had not
consented to it might constitute a violation of RPC 8.4(c) and might subject the lawyer to
discipline.
Financial obligations owed by a client, such as medical bills owed to a healthcare provider, must
be distinguished from expenses related to litigation, such as expert witness and court reporter
fees. See, In re Witteman, 108 Wn.2d 281, 737 P.2d 1268 (1987); Copp v. Breskin, et al., 56 Wn.
App. 229, 782 P 2d 1104 (1989).
L-9
Filed for Record by:
____________ COUNTY AUDITOR'S OFFICE
OF THE STATE OF WASHINGTON
In Re
Patient,
and
Tortfeasor.
NOTICE OF
HEALTHCARE/MEDICAL
LIEN
PURSUANT TO
RCW 60.44.010
COMES NOW the following Claimant, licensed as a ________________; whose address is
__________________________________________. The undersigned healthcare provider claims a
lien for services and devices in accordance with RCW 64.44.010, et seq. as a
______________________.
NAME AND ADDRESS OF PATIENT:
NAME AND ADDRESS OF TORTFEASOR:
PLACE OF ACCIDENT:
TIME AND DATE OF ACCIDENT:
NATURE OF INJURIES :
L-10
CURRENT AMOUNT OF LIEN
(Amount will increase as additional services are provided):
Dated this ____________day of ___________________________, 20___.
________________________________
Physician/Practitioner
STATE OF WASHINGTON )
)ss.
COUNTY OF _______________ )
On this day personally appeared before me______________________________ to me
known to be the individual(s) described in and who executed the within and foregoing instrument,
and acknowledged that (he/she/they) signed the same as (his/her/their) free and voluntary act and
deed, for the uses and purposes therein mentioned.
GIVEN under my hand and official seal this _____ day of _________________, 20___.
________________________________
NOTARY PUBLIC in and for the State
of Washington, residing at__________________________
My appointment expires: __________
Print Name:_______________________
L-11
_________________________ COUNTY AUDITOR'S OFFICE
OF THE STATE OF WASHINGTON
In Re
and
FULL RELEASE AND
SATISFACTION OF HEALTH
CARE/MEDICAL LIEN PURSUANT
TO RCW 60.44.010
COMES NOW the undersigned lien holder/health care provider, whose business address is:
________________________________________________________________, and states as
follows:
(1) The undersigned healthcare provider filed a claim of lien for services and devices in
accordance with RCW 60.44.010, et seq. as a health care provider under Auditor's File No.
__________________ on or about the _____ day of _________________, _____, .involving a
patient identified as __________________________; and a tortfeasor identified as
________________________________________ relating to an auto accident/other incident which
occurred on or about __________________, ______, 20_______;
(2) The undersigned claimant now wishes to irrevocably RELEASE and formally note the
FULL SATISFACTION of the foregoing healthcare lien; and,
(3) Requests the Auditor to mark such lien as FULLY PAID/SATISFIED and therefore
L-12
RELEASED.
Dated this ____________day of ________________________, 20_______.
____________________________________
Printed Name: ________________________
Business Name: _______________________
STATE OF WASHINGTON )
)ss.
COUNTY OF _______________ )
On this day personally appeared before me______________________________ , the health
care provider claiming said lien, and to me known to be the individual(s) described in and who
executed the within and foregoing instrument, and acknowledged that (he/she/they) signed the same
as (his/her/their) free and voluntary act and deed, for the uses and purposes therein mentioned.
GIVEN under my hand and official seal this _____ day of _________________, 20___.
___________________________________________
NOTARY PUBLIC in and for the State
of Washington, residing at______________________
My appointment expires: _______________________
Print Name:__________________________________
L-13
