The trial court held that LHMS’s Lien Law improperly permitted the creation of a lien based on a private contract in violation of the Florida Constitution. In other words, the law was unconstitutional. LHMS appealed to the District Court of Appeal of Florida, Second District, where it again lost. It then took its final shot, with the Florida Supreme Court. The Supreme Court affirmed the lower courts, agreeing that the Lien Law ran afoul of constitutional provision article III, section 11(a)(9), which provides in pertinent part as follows:

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 . . . .

Because of the potential magnitude of this decision, I am not yet prepared to declare definitively that it means what it appears to mean. I will need time to ruminate and discuss the decision with my brethren before I get there. That said, the holding does appear to be straight forward and clear cut. Time will tell.

If it does mean what I think, for all practical purposes it is beyond reversal. The only option is to amend the Florida Constitution. This is a difficult two-step process, concluding with the proposed amendment needing the approval of 60% or more of Florida voters. IMHO, it is exceedingly unlikely that educated Florida voters will agree to give hospitals such a powerful lien.

While hospital bills will remain due, without lien protection facilities must resort to breach of contract actions to collect. Not only are there defenses to such actions, the facilities cannot freeze the third party funds pending the outcome of the lawsuit. Because of their weakened positions, facilities will be more agreeable to cutting friendly deals. Given the tendency of hospitals to price gouge, this is due justice.

CAVEAT: This blog has been superseded by this blog: Jeffrey P. Gale, P.A. // Constitutionality of Florida Hospital Lien Depends on Mechanism of Creation

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