Arizona Court of Appeals Division One holds that medical payments coverage in a car insurance policy is subject to health care provider liens because it is not health insurance.

A driver obtained car insurance that included optional medical payments coverage (“medpay coverage”).  A hospital treated that driver after an accident.  The cost of those medical services exceeded $160,000 and the hospital perfected and recorded a health care providers lien for over $140,000.  Despite the lien, the driver’s insurance company paid the $99,000 in medpay coverage directly to the driver.  The hospital filed a lien enforcement action against the insurance company.  The trial court granted the insurance company’s motion to dismiss after holding that the medpay coverage was not subject to the lien.  The hospital appealed.

The Court of Appeals reversed, holding that medpay coverage is not exempted by statute from health care provider liens.  A health care provider lien under A.R.S. § 33-931 “extends to all claims of liability or indemnity, except health insurance and underinsured and uninsured motorist coverage as defined in § 20-259.01” (emphasis added).  The issue is whether medpay coverage is health insurance for purposes of the statutory exemption.  The insurance company had the burden on motion to dismiss but did not provide the insurance policy as part of the record on appeal.  Lacking any definitions from the policy, the Court relied on statutory interpretation of the terms. 

Medpay coverage is not health insurance for purposes of the health care provider lien statute.  The legislature added the exception for health insurance sixteen years before the other exceptions in A.R.S. § 33-931.  The health insurance exception was not affected by those later exceptions for “underinsured and uninsured motorist coverage.”  The reference to the definitions in A.R.S. § 20-259.01 also relates only to the later exceptions, and § 20-259.01 does not even define health insurance.  In addition, “health insurance” and “medpay” have distinct meanings in other contexts, including as used in other statutes and as interpreted in a previous case.

Judge Thumma authored the opinion; Judges Cattani and Beene concurred.