HB279 Alabama 2021 Session

Summary

Primary Sponsor

David FaulknerRepresentative

Republican

Session

Regular Session 2021

Title

Hospitals, require hospitals to bill an injured person's health insurance and only seek compensation from health insurance unless certain circumstances apply, clarifying hospital lien provisions, Sec. 27-12-25 added; Sec. 35-11-371 am'd.

Summary

HB279 tightens hospital liens and shields insured injured people by prioritizing health insurance billing and restricting insurer actions when third-party liability could apply.

What This Bill Does

It reforms hospital lien rules to limit when liens can be placed and to require proper claim submission, removing a contract-based override and establishing clear timelines for lien perfection and release, with these changes applying only to contracts entered after the act's effective date. It also creates a new prohibition on health insurers from denying or delaying payment for health care services simply because third-party liability might exist, while allowing limited recoupment and subrogation rights; the Department of Insurance will set the implementing rules. The act becomes effective on the first day of the third month after passage, and applies prospectively to new or renewed contracts after that date.

Who It Affects

• Hospitals and hospital lien processes: must follow specified steps to perfect liens, submit proper claims, and adhere to timeline requirements; the ability to use liens is limited by health insurance claims and timelines.
• Health insurers/payors and injured individuals: insurers cannot deny or delay covered payments solely due to potential third-party liability; they may recoup payments from third parties or via subrogation, within a defined limit, and rules will be set by the Department of Insurance.

Key Provisions

• Amends Section 35-11-371 to limit hospital liens on insured patients, require proper coded claims, and establish timelines for lien perfection and release; removes a contractual override that allowed hospital-payor agreements to supersede this law; applies to contracts entered after the act's effective date.
• Adds Section 27-12-25 to prohibit denial/delay of otherwise valid health care claims because of third-party liability considerations, allows limited recoupment and subrogation by payors, caps recoupment to amounts paid for services, and requires DOI rules; applies to contracts entered into, amended, or renewed after the act's effective date.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Hospitals