Florida Supreme Court says LMHS Lien Law violates state Constitution

By Tomas Kassahun | Jan 2, 2019

In the case of Lee Memorial Health System against Progressive Select Insurance Co., the Supreme Court of Florida upheld the district court’s ruling and said the LMHS Lien Law violates the Florida Constitution.   pexels.com

TALLAHASSEE — The Supreme Court of Florida upheld a district court ruling that the LMHS Lien Law violates the Florida Constitution.

Lee Memorial Health System is a a “public health care system in Lee County” created by chapter 2000-439, Laws of Florida, and is the beneficiary of certain rights against private citizens and companies under the LMHS Lien Law, according to the court ruling, dated Dec. 20.

The LMHS Lien Law entitles Lee Memorial to liens for its charges for health care services, defines what actions constitute impairment of those liens, and creates a cause of action to recover damages for impairment of those liens by others—including persons, firms, or corporations who are neither the providers nor the beneficiaries of the healthcare services at issue, the court said.

“The constitutional challenge to this law arose out of a lawsuit filed by Lee Memorial against Progressive Select Insurance Company for the impairment of two liens Lee Memorial had filed based on the provision of medical treatment to an injured person,” it said.

According to the court, Lee Memorial alleged that Progressive impaired these liens by settling a claim with the injured person on behalf of Progressive’s insured without the knowledge or consent of Lee Memorial and without the satisfaction or release of Lee Memorial’s liens.

Article III, section 11 (a)(9), cited by the Supreme Court, says “there shall be no special law or general law of local application pertaining to…creation, enforcement, extension or impairment of liens based on private contracts.”

“Lee Memorial contends that the contract must be public because Lee Memorial is a public entity,” the opinion stated. “However, the term ‘private’ in this constitutional provision modifies the contract, not the parties who have entered the contract.”

The Supreme Court added that the subject matter of the contract is the provision of and payment for medical services, not the administrative operation of Lee Memorial. 

“The available definitions of ‘private’ and ‘public’ that are most reasonably applied to a contract, along with common sense, show that the contract at issue is private,” the opinion stated.

According to the opinion, the provision of medical services to the patient in this case and his agreement to pay for those services upon entry to the hospital are matters that are generally “intended for or restricted to the use of a particular person” and “not freely available to the public.” 

“Our conclusion that the contract at issue is private due to the subject matter, rather than the nature of one of the parties, as Lee Memorial would have us decide, is also consistent with the way in which the term ‘private contract’ has been used in case law,” the opinion stated.

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