GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

H	1 

HOUSE BILL 199

Short Title:  Amend Medical Providers' Liens.	(Public)

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Sponsors: Representative Culpepper.

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Referred to:  Insurance, if favorable, Judiciary II.

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February 17, 1997

A BILL TO BE ENTITLED
AN ACT TO AMEND THE LAW RELATING TO LIENS DUE MEDICAL PROVIDERS FOR MEDICAL SERVICES PROVIDED, AS RECOMMENDED BY THE GENERAL STATUTES COMMISSION.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 44-49, 44-50, and 44-51 are repealed.
Section 2.  Article 9 of Chapter 44 of the General Statutes is amended by adding the following new sections to read:
"§ 44-51.01.  Definitions.
As used in this Article:
(1)	‘Claimant' means an injured person or the injured person's personal representative, collector, guardian, or parent responsible for payment for medical services.
(2)	‘Injured person' means any individual who has sustained personal injuries.
(3)	‘Medical provider' means all of the following:
a.	Any physician, nurse, chiropractor, dentist, optometrist, podiatrist, physical therapist, psychologist, pharmacist, or other individual licensed, registered, or certified by this State or any other state to provide medical services.
b.	Any employer of any individual listed in sub-subdivision a. of this subdivision, or any entity through which such an individual renders medical services, that has the right to receive the payment due for the individual's medical services to an injured person.
c.	Any hospital, health care facility, provider of ambulance services, or similar provider of medical services that is licensed or regulated under Chapter 58, 122C, 131D, or 131E of the General Statutes, former Chapter 131 of the General Statutes, or the equivalent law of any other state.
(4)	‘Medical records' means all records, regardless of the form in which these records are maintained, concerning patient-provided information, observations, findings, treatment rendered, opinions, physician notes and summaries, nursing notes, laboratory and radiological reports, and any other health care records prepared by any health care professional or other person.
(5)	‘Medical services' means any services or supplies furnished to an injured person for the purpose of treating the injuries.
(6)	‘Person' means an individual, trust, partnership, professional association, limited liability company, corporation, federal, state, or local government, any political subdivision, agency, or institution of those governments, or any other entity.
(7)	‘Recovery' means any sums recovered, or to be recovered, as compensatory damages for personal injuries in any civil action or other proceeding in this State or by settlement.  Recovery includes sums recovered under uninsured and underinsured motorist coverage, but does not include proceeds from any other insurance policy when the injured person is also the insured.
(8)	‘Responsible party' means an insurance company or any other person responsible for paying a recovery.
"§ 44-51.02.  Creation and perfection of lien.
(a)	Creation of Lien. – Any medical provider not otherwise prohibited by law, rule, or regulation from obtaining a lien shall, upon perfection in accordance with this Article, have a lien upon any recovery for personal injuries for which the medical provider rendered medical services to the extent the amount owed for these services has not been paid.  The lien attaches regardless of whether the party entitled to the recovery is the injured person or another claimant.
(b)	Perfection of Lien. – To perfect the lien, the medical provider shall comply with all of the following:
(1)	Before the recovery is paid pursuant to G.S. 44-51.04(a), send a written notice of lien to:
a.	The claimant's attorney.
b.	If, and only if, the claimant's attorney is not known, to the responsible party and the claimant.
(2)	If requested by the claimant or the claimant's attorney, furnish without charge one copy of an itemized statement and the medical records of the medical provider with respect to the medical services rendered to the injured person by reason of the personal injury.  This subdivision does not apply to charges for preparing a medical report that the medical provider does not ordinarily create if the claimant or the claimant's attorney specifically requests the medical provider to create that particular report.
(c)	Contents of Notice. – The notice of lien shall include all of the following:
(1)	The name, address, and telephone number of the medical provider.
(2)	The name and last known address of the injured person.
(3)	The date of the injury.
(4)	The date or dates during which the medical provider provided medical services.
(5)	The amount for which the lien is being asserted.
(6)	If sent to an insurance company, the name of its insured or other person allegedly responsible for the injury.
(7)	A statement that the medical provider is claiming the lien provided for by this Article.
The information required by this subsection may be contained in the written notice of lien or any statement attached to and sent with the notice of lien.
(d)	Methods of Sending Notice. – A notice of lien and any copies of a notice of lien required by this Article to be sent to a claimant, a claimant's attorney, or a responsible party shall be sent in any one of the following ways:
(1)	Personal delivery to the recipient or the recipient's business address if the recipient or other person at that address provides a receipt for the copy.
(2)	Certified mail, return receipt requested.
(3)	Overnight delivery service that provides proof of delivery.
(4)	Transmission by facsimile machine or other form of electronic communication, if the recipient affirmatively transmits a written confirmation of receipt.  A statement of receipt automatically generated by a machine shall not qualify as a confirmation under this subdivision.
(e)	Additional Requirements for Notices to Insurance Companies. – A notice of lien sent to an insurance company under subdivision (b)(1) of this section shall be sent to any office designated by the insurance company as an office authorized to receive claims, the principal office of the insurance company in this State, or the insurance company's regional office or its home office.
"§ 44-51.03.  Amended liens.
A medical provider may send an amended notice of lien at any time.  An amended notice of lien shall be sent by any of the methods set forth in G.S. 44-51.02(d)	for a notice of lien.
"§ 44-51.04.  Payment of recovery; limitations on liability for improper payment.
(a)	Payment of Recovery. – The responsible party, or the claimant's attorney acting pursuant to subsection (c) of this section, shall pay the recovery in the following order:  any attorneys' fees due the claimant's attorney and the reasonable expenses incurred by the attorney and the claimant in collecting the recovery; and any perfected liens under this Article, subject to the limitations in subsection (b) of this section; and the remainder of the recovery to the claimant.
(b)	Limitations on Payment of Liens. – The total of all payments made to medical providers under this section shall not exceed 50 percent (50%) of the recovery remaining after payment of the amounts provided in subdivision (1) of subsection (a) of this section.  G.S. 28A-18-2 shall further limit payments to medical providers under this section.  Multiple liens shall be paid pro rata.
(c)	Payments to Claimant's Attorney. – Notwithstanding any other provision of this Article, the responsible party shall pay the recovery to the claimant's attorney, if known, and the attorney shall pay the recovery as provided in subsections (a) and (b) of this section.  The responsible party is discharged of further liability under this Article to medical providers if the responsible party sends the attorney a copy of any notice of lien previously received by the responsible party, and the attorney actually receives the copy or copies before or at the same time the attorney receives the payment.  The responsible party is not liable under this Article to any medical provider whose notice of lien is received after the recovery is mailed or delivered to the claimant's attorney.
"§ 44-51.05.  Disputed liens.
If the amount owed for medical services is in dispute, nothing in this Article shall compel a responsible party or a claimant's attorney to pay the disputed amount until it is fully established in the manner provided by law.
"§ 44-51.06.  Penalty for asserting false lien.
Any person who asserts a lien under this Article when no amount is owed the person, or in an amount greater than the person is owed, and who refuses without justification to correct or update the lien after becoming aware of the error, is liable to the claimant for all of the following:
(1)	Liquidated damages in the amount of five thousand dollars ($5,000) or all damages proximately resulting from the assertion of the improper lien, whichever is greater.
(2)	Any reasonable attorneys' fees, court costs, and any other litigation and investigatory expenses incurred as a result of the error before the error is corrected.
"§ 44-57.07.  Exemptions and exclusions.
(a)	No person who pays a recovery pursuant to subsections (a) and (b) of G.S. 44-51.04 is liable under this Article to any medical provider whose notice of lien is received by that person after the recovery is paid, or whose lien is not perfected before the recovery is paid, pursuant to these subsections.
(b)	This Article does not apply to injuries resulting from an accident covered by Chapter 97 of the General Statutes, the North Carolina Workers' Compensation Act.
(c)	G.S. 44-48 does not apply to liens under this Article."
Section 3.  A lien that was existing and valid under former G.S. 44-49 and G.S. 44-50 on the effective date of this act is a perfected lien under G.S. 44-51.01 through G.S. 44-51.07, as enacted by this act, and shall be governed by this act.  A medical provider as defined in G.S. 44-51.01, as enacted by this act, that had not received, or had received but not yet responded to, a request for medical records under former G.S. 44-49 and G.S. 44-50 before the effective date of this act, but had otherwise taken all necessary steps to obtain a valid lien under those former sections before the effective date of this act, shall provide medical records as required by G.S. 44-51.02, as enacted by this act, to have a perfected lien under this act.
Section 4.  This act becomes effective January 1, 1998.