Parnell v. Adventist Health Sys./West,
No. F038004 (Cal. Ct. App. Feb. 25, 2003)

A California appeals court allowed a patient's unfair business practices complaint to proceed against a hospital when the hospital asserted a lien on the patient's tort recovery. The patient was involved in an automobile accident and received care at the hospital. The hospital subsequently was reimbursed its contracted rate from the patient's insurance company. When the patient later brought suit against the person that caused the accident, the hospital filed notice of a lien to recover the amount above its contracted rate already received. The patient then commenced this action against the hospital, contending that the patient's obligation to the hospital had already been satisfied by the patient's insurance provider. In overturning previous state case law recognizing that the state's hospital lien act permits a hospital to assert a lien for the unpaid balance after payment by an insurer, the court held the hospital lien attaches only to the patient's underlying debt and not to any of the unpaid balance.