Arizona Lien Law Provisions
– By David Morrison, Esq.
I have been asked to discuss Arizona lien law as it pertains to chiropractic providers. Arizona passed a new lien law in 2023 because of heavy lobbying by the plaintiff’s attorney bar and a legislator that felt she had been mistreated by the way personal injuries were being handled. As a result, chiropractors who file liens are forced to negotiate their bills.
I reference you to ARS Sections 33-931 through 33-937. Most of the changes are encompassed in Section 33-937.
First, provider liens do not apply to UM, UIM or Medical Payments coverage. Second, the lien for a chiropractor must exceed $250. Please note no such limitation exists for hospitals. Also note that hospital liens have priority over all other liens.
Third, some of the new language that was added reads as follows: “One third of any third-party judgment, settlement or award is exempt from any lien or assignment authorized by this section (33-931 (E)(1)).”
This was added to “protect” the injured party, but note that most PI attorneys charge one-third of the recovery as their fees. Seems like quite the coincidence.
Fourth, under 33-931 (E)(2), if the injured person has health insurance and the provider is in-network, the provider cannot file a lien. If the in-network contract allows liens, then the provider can file.
Lastly, take note of 33-937, which requires providers to compromise any lien filed pursuant to 33-931. This section also provides a list of 11 items that must be taken into consideration when negotiating the lien. (33-937 (B) (1-11)
There are some exceptions to these requirements: (33-931 (E)(3) (a-d). The easiest exception to apply is having the injured party opt out of their health insurance coverage. The problem with this option is it puts the provider in the position of providing “legal advice” as to whether the injured party wants to take advantage of their coverage. This could create a problem later in the case.
Personally, I believe the forced negotiation provision may be unconstitutional and unenforceable. I don’t believe you can force someone to change their prices after the services have been provided and the injured party has agreed to pay for them. However, I have yet to have a chiropractor want to challenge that aspect of the new law.
David Morrison is a personal-injury attorney and counsel for the Arizona Chiropractic Society.