If I'm settling a car-accident injury claim and the insurer wants me to sign a hold-harmless agreement, can the insurer use that to avoid paying my chiropractor's medical lien?

Subject

Whether a hold-harmless agreement between a patient and an insurer can defeat a valid Arkansas medical lien in a personal-injury settlement.

Plain-English summary

Representative Denise Garner described settlements in which medical providers had filed liens but remained unpaid after an insurer obtained hold-harmless language from a patient or the patient's lawyer. The Attorney General assumed, for his analysis, that the lien was valid and perfected under the Arkansas Medical, Nursing, Hospital, and Ambulance Service Lien Act. He concluded that a patient-insurer hold-harmless provision likely does not comply with the Act and that two statutory provisions likely make such a private contract void on public-policy grounds.

A.C.A. § 18-46-112 bars the tortfeasor or insurer from paying settlement money to the patient within 60 days after lien notice is served, and at any time after the notice is recorded with the county clerk, unless the lien has been paid or the practitioner has released it in writing. A payer that disregards the rule is liable to the provider for the lien's value, up to the amount the patient was entitled to receive from the tortfeasor or insurer. A.C.A. § 18-46-113 also makes a patient's waiver or release of the injury claim void when the patient has notice of an unpaid, unreleased medical lien.

The AG said the provider's statutory claim against the tortfeasor or insurer remains even if a court enforces indemnity language between the insurer and patient. He relied on Buchanan v. Beirne Lumber Co., where the Arkansas Supreme Court said a lien “cannot be evaded by a settlement.” He also noted that lawyers asked to indemnify insurers personally face possible ethical repercussions; his footnotes cite Texas and Los Angeles County ethics opinions on that separate issue.

What this means for you

Patients and their lawyers

Ask whether a medical provider has a valid, perfected lien before settling an injury claim. The AG says a private hold-harmless clause cannot erase the provider's statutory claim. The opinion also notes a separate ethics concern when a lawyer personally promises to satisfy liens; the cited ethics materials are in its footnotes.

Insurers and tortfeasors

Check service and recording of lien notice before paying the patient. The opinion identifies two statutory periods when payment is restricted and says the payer may owe the provider up to the amount the patient was entitled to receive. Paying around a lien and relying on indemnity does not extinguish the provider's claim.

Medical providers

The AG assumed the lien was valid and perfected. He quotes the rule that perfection is complete when notice of the lien claim is served and filed. The opinion says the Act provides a direct claim against the tortfeasor and insurer if the lien is bypassed, subject to the stated limit on the lien amount.

Common questions

Can an insurer and patient agree that the patient will cover unpaid medical liens?

The AG says the Act's payment and waiver provisions likely make a hold-harmless provision between them void on public-policy grounds. Even if an indemnity term is enforced between those parties, it does not eliminate the medical provider's statutory claim against the insurer.

Is the insurer liable for any amount a provider lists?

The opinion says liability for paying around a lien is limited to the lien's value and cannot exceed the amount the patient was entitled to from the tortfeasor or insurer. It also notes that a provider cannot ignore negotiated rates and terms in its provider agreements when determining the underlying debt.

Must a provider bill health insurance before pursuing the lien?

The AG says the Act neither requires nor precludes a health-insurance claim before pursuing a medical lien.

Did the AG cite ethics opinions about lawyers' personal indemnity?

Yes. PDF footnotes 1 and 18 cite Texas Ethics Opinion No. 694, and footnote 1 also cites Los Angeles County Bar Professional Responsibility and Ethics Committee Opinion No. 532. The main analysis warns of possible ethical repercussions without resolving any particular Arkansas lawyer's conduct.

Background and statutory framework

The opinion describes the Act as protecting medical providers who treat injured patients and have complied with lien requirements. It treats the lien as a statutory right in the patient's injury settlement or judgment. The AG reads the restrictions on settlement payments and injury-claim waivers together, then cites Buchanan's statement that a lien cannot be evaded by a settlement. The analysis is expressly premised on a valid, perfected lien.

Currency note

This opinion was issued in 2025. Check the present statute, lien notice, filing, and provider agreement before relying on its analysis for a settlement.

Citations

• A.C.A. §§ 18-46-101 to -117 (Medical, Nursing, Hospital, and Ambulance Service Lien Act)
• A.C.A. § 18-46-105 (perfection)
• A.C.A. § 18-46-112 (settlement-payment restriction and liability)
• A.C.A. § 18-46-113 (void patient waiver or release)
• Buchanan v. Beirne Lumber Co., 197 Ark. 635, 124 S.W.2d 813 (1939)
• Mounce v. CHSPSC, LLC, 2017 WL 4392048 (W.D. Ark. Sept. 29, 2017)
• Tex. Ethics Op. No. 694, 85 Tex. B.J. 648 (July 2022) (lawyer indemnity, cited in footnotes)
• Los Angeles County Bar Prof'l Responsibility and Ethics Comm. Op. No. 532 (2019) (lawyer indemnity, cited in footnote 1)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2025-039

August 27, 2025

The Honorable Denise Garner
State Representative
Post Office Box 646
Fayetteville, Arkansas 72702

Dear Representative Garner:

I am responding to your request for an opinion on A.C.A. §§ 18-46-101 et seq. concerning personal injury lawsuits and hold-harmless agreements between insurers, their insured, and the insured’s legal counsel. You noted that medical providers, such as chiropractors, often (1) treat patients who have experienced motor-vehicle accidents and (2) defer payment until the matter is resolved. Additionally, you mentioned that these providers typically file medical liens under A.C.A. §§ 18- 46-101 et seq. You indicate that an issue has arisen in your district and across the state regarding hold-harmless agreements, resulting in unsatisfied medical liens following settlements. Lastly, you indicated that parties to these hold-harmless agreements sometimes refuse to honor the medical lien, claiming that the agreement extinguishes any obligation to satisfy the lien.

Against this background, you ask the following questions:

1. Does a hold-harmless agreement between a patient (or their legal counsel) and an insurer
  comply with Arkansas law, specifically the mandates of the Arkansas Medical Lien Act?

   Brief response: No, for reasons explained below, such a hold-harmless agreement does
                   not satisfy the Arkansas Medical, Nursing, Hospital, and Ambulance Lien
                   Act.

2. What is the purpose of a medical lien if it can simply be invalidated or ignored by a hold-
  harmless agreement or other agreements between a patient and their insurer?

   Brief response: As explained in response to Question 1, medical liens cannot be
                   invalidated or ignored through a hold harmless agreement. The purpose
                   of medical liens, which is to encourage treatment, remains.




                          BOB R. BROOKS JR. JUSTICE BUILDING
                              101 WEST CAPITOL AVENUE
                            LITTLE ROCK, ARKANSAS 72201

The Honorable Denise Garner
State Representative
Opinion No. 2025-039
Page 2

DISCUSSION

Question 1: Does a hold-harmless agreement between a patient (or their legal counsel) and an insurer comply with Arkansas law, specifically the mandates of the Arkansas Medical Lien Act?

The use of a hold-harmless provision between a patient and an insurer likely does not comply with the Arkansas Medical, Nursing, Hospital, and Ambulance Service Lien Act (the “Act”). 1 The Act, like similar statutes in other states, was enacted to protect medical providers from insolvent patients (injured through the tortious conduct of others) and to encourage those same providers to treat them. 2 Many medical lien statutes originated in the 1930s, following the Great Depression, when economic conditions led to a significant number of patients becoming indigent. 3

The Act grants a medical provider, who has complied with all the statutory requirements, a lien in a patient’s personal-injury settlement or judgment. 4 Said another way, the Act allows a medical provider to “step into the shoes of an injured person for purposes of receiving payment from a tortfeasor or the tortfeasor’s insurance company for economic damages.” 5 The Act does not require or preclude a medical provider from filing a health-insurance claim before pursuing a medical lien. 6 However, a medical provider cannot ignore contractually negotiated rates and terms contained in provider agreements when it “determines the amount of the underlying debt.” 7

For purposes of this opinion, I assume that any lien is perfected and valid in accordance with the statute’s requirements. 8 “Perfection is complete once notice of a claim of lien is served and filed.

1
You may be asking about the patient’s legal counsel because there have been instances where a patient’s lawyer is asked to sign the hold harmless and indemnity agreement, binding the attorney to satisfy any liens against the settlement funds personally. Every jurisdiction that has examined this issue has uniformly concluded that such agreements are prohibited. See Aaron Fredrickson, The Medicare Secondary Payer Act Ethical Considerations in Settling Cases, Bench & B. Minn., May/June 2012, at 22, 23; Opinion No. 694, July 2022, 85 Tex. B.J. 648 (2022); Los Angeles County Bar Prof’l Responsibility and Ethics Comm. Opinion No. 532 (2019) (surveying state and local professional ethics opinions on the topic). 2 Michael K. Beard & Dylan H. March, Arbitrary Healthcare Pricing and the Misuse of Hospital Lien Statutes by Healthcare Providers, 38 Am. J. Trial Advoc. 255, 284 (2014); Buchanan v. Beirne, 197 Ark. 635, 124 S.W.2d 813, 815 (1939). 3 Michael K. Beard & Dylan H. Marsh, Arbitrary Healthcare Pricing and the Misuse of Hospital Lien Statutes by Healthcare Providers, 38 Am. J. Trial Advoc. 255, 257 (2014). 4 A.C.A. §§ 18-46-101 to -117.
5
41 C.J.S. Hospitals § 22.
6
Mounce v. CHSPSC, LLC, No. 5:15-CV-05197, 2017 WL 4392048, at 11 (W.D. Ark. Sept. 29, 2017); Stuttgart Regional Medical Center v. Cox, 343 Ark. 209, 214, 33 S.W.3d 142, 144–45 (2000). 7 Mounce, at 11.
8
A.C.A. § 18-46-105.
The Honorable Denise Garner
State Representative
Opinion No. 2025-039
Page 3

No additional steps need to be taken.” 9 When a lien is perfected, the lienholder has satisfied all the legal requirements for enforcement against the personal-injury settlement and has provided proper notice.

Unsatisfied medical liens represent a significant liability to insurers who issue payments to a patient to resolve a personal injury claim. Insurers often insist on hold-harmless language in their general releases of claims. The patient agrees not to hold the insurance company liable for unpaid medical liens after the patient receives the settlement funds. Typically, an indemnity clause is included alongside a hold-harmless language, by which the patient agrees to cover the insurance company’s losses or damages if the medical provider enforces its lien against the insurer. Two provisions of the Act likely render these private contracts invalid.

First, A.C.A. § 18-46-112 prohibits the tortfeasor, the insurance company, or both, from issuing payment to a patient as part of a settlement (whether partial or total) within 60 days of service of the lien notice and at any time after the notice has been recorded with the local county clerk. 10 A settlement payment to the patient can only be made after (1) the lien is paid or (2) the medical practitioner provides a written release of the lien. 11 If the tortfeasor, the insurance company, or both issue payment anyway, they are liable to the medical provider for the value of the lien, as long as that amount does not exceed the amount the patient was entitled to from the tortfeasor or the insurer. 12

Second, A.C.A. § 18-46-113 prevents patients with notice of a medical lien from waiving or releasing their personal injury claim against the tortfeasor and their insurance company until (1) the medical lien is paid or (2) the medical lien is released. 13 If those two conditions are not met, the patient's waiver or release of their personal injury claim is void. 14

Together, those two provisions likely render a hold-harmless agreement between a patient and the insurance company void on public policy grounds. 15

9
In re Miller, 444 B.R. 178, 181 (Bankr. E.D. Ark. 2011) (amended Feb. 17, 2011).
10
A.C.A § 18-46-112(a).
11
Id. § 18-46-112(a)(1)–(2).
12
Id. § 18-46-112(b).
13
Id. § 18-46-113(a)(1)–(2).
14
Id.. § 18-46-113(b).
15
Town of Newton v. Rumery, 480 U.S. 386, 392 (1987) (noting that “a promise is unenforceable if the interest in its enforcement is outweighed in the circumstances by a public policy harmed by enforcement of the agreement”). The Honorable Denise Garner State Representative Opinion No. 2025-039 Page 4

Question 2: What is the purpose of a medical lien if it can simply be invalidated or ignored by a hold harmless agreement or other agreements between a patient and their insurer?

As discussed above, a medical lien under the Act, which (for purposes of the analysis in this opinion) I assume is valid and enforceable, cannot simply be invalidated by including a hold- harmless clause in a release of claims without jeopardizing the patient, tortfeasor, and insurer’s private settlement. That was the outcome in Buchanan v. Beirne Lumber Co., decided by the Arkansas Supreme Court in 1939, just a few years after the Act was passed. 16 Dr. A. S. Buchanan, a physician and surgeon, provided services to J. N. Henley, a patient who was injured in a trucking accident. Henley sued the trucking company, and Dr. Buchanan filed a lien, in accordance with the statutes’ requirements. Without notifying Dr. Buchanan, the trucking company settled with Henley for $4,000 in exchange for a release of claims, without paying the lien, and secured a dismissal of the lawsuit. Dr. Buchanan intervened and requested that the Court set aside the dismissal. In doing so, the Arkansas Supreme Court noted that, “[t]he remedial object of the statute was to prevent the very thing that … occurred” and that a “lien … cannot be evaded by a settlement.” 17

The Act allows a direct cause of action against a tortfeasor and an insurer to ensure payment to a patient only after a valid and enforceable lien has been resolved. It is a statutory right that obligates all involved parties. A subset of these parties cannot use a private contract to circumvent liability under the statute. Even if a court upholds an insurer’s attempt to enforce hold-harmless or indemnity provisions against a patient, it will not invalidate a medical provider’s cause of action against the insurer to satisfy the lien. In such cases, the insurance company would be required to pay the lien it previously ignored (including any costs and attorney’s fees incurred in enforcing it) and then seek indemnity from the patient, and potentially the patient’s lawyer. Such a situation exposes the parties to additional liability and puts attorneys at risk of ethical repercussions. 18

Assistant Attorney General Justin Hughes prepared this opinion, which I hereby approve.

Sincerely,

TIM GRIFFIN
Attorney General

16
197 Ark. 635, 124 S.W.2d 813 (1939).
17
Buchanan, 197 Ark. 635, 124 S.W.2d at 815-16.
18
Pollo Operations, Inc. v. Tripp, 906 So. 2d 1101, 1105-06 (Fla. Dist. Ct. App. 2005); Tex. Ethics Op. No. 694, 85 Tex. B.J. 648 (July 2022).