Hospital Liens vs. Health Insurer Claims in Arizona

By the FigureMyTax Editorial Team · How we calculate

An Arizona hospital or provider lien is created by statute, cannot reach one-third of your recovery, must be recorded and compromised fairly, and does not reach health insurance, medical payments or UM/UIM money. A health insurer's claim comes from your policy.

Who can claim a lien, and on what

A.R.S. 33-931 gives a licensed health care institution or provider, and certain ambulance operators, a lien for its customary charges for treating an injured person. The lien extends to claims of liability or indemnity but not to health insurance, medical payments, or UM and UIM coverage. For providers other than hospitals and ambulances, it applies only to customary charges over $250. A hospital lien has priority over other provider liens, and the statute does not apply to workers' compensation.

One-third is exempt

Subsection (E)(1) says one-third of any third-party judgment, settlement or award is exempt from any such lien or assignment. On a $90,000 settlement, no more than $60,000 can be claimed by provider liens combined, before any compromise.

Recording deadlines

Under A.R.S. 33-932, a hospital records a verified statement with the county recorder within 30 days after the patient is discharged, and other providers record within 30 days after services. The claimant mails a copy to the patient within 5 days. If a provider other than a hospital or ambulance does not record on time, its lien is invalid.

In-network providers

If you are covered by a health plan and the provider is in the plan's network, the provider's contract must expressly allow the lien, or the lien is invalid, with exceptions such as services the plan does not cover, no network contract, no health coverage, or a signed election not to use your coverage. A provider can still pursue what you owe in copays, coinsurance and deductibles.

A fair compromise is required

Section 33-937 requires the provider, the patient and the patient's attorney to compromise the lien to reach a fair and equitable settlement, considering the injury, the insurance available, payments already received, the services, the total settlement, other liens, your attorney fees and costs, and reductions agreed by others. A court can decide the compromise if the parties cannot agree. The release must be issued within 30 days after the lien is satisfied (A.R.S. 33-936), and a provider must sue within two years after the judgment or settlement (A.R.S. 33-934).

How an insurer's claim differs

A health insurer's claim is not created by these statutes. It rests on your policy and on other rules that are less settled, as our made-whole post explains. AHCCCS ranks above provider liens; see the Medicare and AHCCCS post. Enter each claim in the Arizona medical lien calculator.

This is general information, not legal advice, and the state comparisons above are illustrative, not an exhaustive survey. Confirm how Arizona's rules apply to your specific case with a licensed Arizona attorney.