Hospital Liens vs. Health Plan Claims in Tennessee

By the FigureMyTax Editorial Team · How we calculate

A Tennessee hospital has a lien for its reasonable and necessary charges, but it cannot exceed one-third of the damages you recover, it is subordinate to your attorney's lien, and it must be perfected by a filing with the circuit court clerk within 120 days after discharge.

The lien and the cap

T.C.A. 29-22-101 gives a hospital, including a governmental one, a lien for all reasonable and necessary charges on your causes of action. It does not apply to any amount over one-third of the damages obtained by judgment, settlement or compromise, it is subordinate to any attorney's lien, and it does not apply to workers' compensation. A lien from a motor vehicle accident does not take priority over a mechanic's lien or prior recorded lien on a vehicle.

Perfecting it

Section 29-22-102 requires the hospital to file a verified statement with the circuit court clerk of its county, and of your county if you live in Tennessee, before or within 120 days after discharge, and within 10 days send a copy by registered mail to each person claimed liable and to your attorney. The clerk keeps a hospital lien book (29-22-103) and releases it on payment (29-22-105).

Settling without paying it

A settlement is not valid against the lien unless the hospital joins or releases it, and settling without a release prima facie impairs it, letting the hospital sue the settling party for the reasonable cost of care (29-22-104). Payers may not name a lien claimant as a payee on the check (29-22-106), and the hospital's approval of a settlement is not required (29-22-107).

A worked example

On a $100,000 settlement with a one-third fee and $3,000 in costs, a $40,000 hospital bill is capped at $33,333, and you keep about $30,333 before any other claim. Use the Tennessee medical lien calculator.

How an insurer's claim differs

A health plan's claim is not a hospital lien; see our post on health plan reimbursement. TennCare and Medicare follow their own rules; see the Medicare and TennCare post.

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