My personal injury client signed a medical lien agreement but now demands that the insurer's checks for medical expenses be paid straight to the client. What do I do with funds the providers are also claiming?

Plain-English summary

The inquiring attorney represented a client in a personal injury action. The client had executed a medical lien agreement, but demanded that payments for the client's medical expenses made by an insurance company be paid directly to the client. The checks were made payable jointly to the client and to the parties who rendered the medical services.

The panel took the position that the inquiry is governed by the "Interprofessional Code of Cooperation for the Rhode Island Bar Association and the Rhode Island Medical Society." Under Article 4 of that Code, a physician's fee is the sole legal obligation of the patient and independent of any litigation; attorneys should advise clients that such bills are the client's sole responsibility, should incorporate an assurance into their fee agreements that treating physicians will be paid from the proceeds, and should obtain authority from the client to pay medical bills directly to the physician in the event of a settlement or judgment.

The panel concluded that the attorney may not compensate the providers of medical services with funds received on behalf of the client without the consent of the client, because the responsibility to fulfill these obligations rests with the client. If the client persists in refusing to meet these obligations, the creditors may pursue legal avenues to secure payment. If the matter is not readily resolved, the panel stated that the attorney, as the stakeholder, should pay the funds into the court registry in an interpleader proceeding.

Currency note

This opinion was issued in 1991, after the Rhode Island Supreme Court adopted the Model Rules of Professional Conduct effective November 15, 1988. It resolves the inquiry under the Interprofessional Code of Cooperation between the Rhode Island Bar Association and the Rhode Island Medical Society rather than a numbered Rule of Professional Conduct. The Rhode Island Supreme Court later revised the Rules of Professional Conduct in 2007 as part of the nationwide Ethics 2000 process, and the interprofessional arrangement and any later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific guidance mentioned here.

Common questions

Q: Can I pay a client's treating physicians out of settlement funds when the client objects?

A: Under this opinion, no. The panel concluded the attorney may not compensate the medical providers from funds received on the client's behalf without the client's consent, because the obligation to pay rests with the client.

Q: Does a signed medical lien agreement let me pay the providers over the client's objection?

A: The panel did not treat the lien agreement as overriding the client's demand. It located the obligation to pay with the client and directed the analysis through the Interprofessional Code, not toward unilateral payment by the attorney.

Q: What should I do with the funds if the dispute cannot be resolved?

A: Per the opinion, the attorney, as stakeholder, should pay the funds into the court registry in an interpleader proceeding.

Background and rules framework

The opinion does not apply a numbered Rule of Professional Conduct. It resolves the inquiry under Article 4 of the Interprofessional Code of Cooperation for the Rhode Island Bar Association and the Rhode Island Medical Society, which addresses a physician's bill for medical service, the client's responsibility for that bill, and the attorney's cooperation in securing payment. The panel drew from that Code the conclusion that the attorney may not pay providers without client consent and, failing resolution, should interplead the disputed funds.

Citations and references

Rules of Professional Conduct:

• None cited. The opinion applies the Interprofessional Code of Cooperation for the Rhode Island Bar Association and the Rhode Island Medical Society (Article 4).

Statutes:

• None cited.

Cases:

• None cited.

Other opinions cited:

• None cited.

See also

• RI EAP Op. 95-12: Disputed Medical Lien on Settlement Funds
• RI EAP Op. 95-57: No Duty to Pay a Health Insurer Absent a Lien
• RI EAP Op. 95-60: Paying a Health Insurer Lien Versus a Mere Claim

Source

• Landing page: https://www.courts.ri.gov/attorney-resources/Pages/Ethics-Advisory-Panel-default.aspx
• Original PDF: https://www.courts.ri.gov/Opinions/EAP%2091-32.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain; the linked PDF is authoritative.

Supreme Court
Ethics Advisory Panel
Opinion #91-32, Request #153
Issued May 23, 1991

An attorney seeks Panel advice concerning the procedure the attorney should follow under circumstances in which a client in a personal injury action, who has executed a medical lien agreement, demands that payments for the client's medical expenses made by an insurance company be paid directly to the client. The attorney states that the checks are made payable to both the client and the parties who rendered the medical services.

The Panel takes the position that this inquiry is governed by "The Interprofessional Code of Cooperation for The Rhode Island Bar Association And The Rhode Island Medical Society". Article 4 of the "Code" provides:

ARTICLE 4
PHYSICIAN'S BILL FOR MEDICAL SERVICE

4.1 It is recognized that a physician's fee for professional services rendered to a patient is the sole legal obligation of the patient and independent of any litigation.

4.2 Attorneys must recognize that they have an obligation to the physicians who supply them with records, reports and bills to co-operate with such physicians in obtaining payment of bills for services rendered to a patient in cases where claims for medical disability are the subject of litigation.

4.3 Attorneys should advise their clients that bills rendered for such medical services by a physician are the sole responsibility of the client and are independent of pending litigation, and that such bills are due and payable when rendered by the physician. Attorneys should also incorporate into their agreements with clients an assurance that treating physicians will be paid unpaid balances from the proceeds of the case.

4.4 Counsel should obtain authority from the client to pay medical bills directly to the physician in the event of a settlement or judgment in accordance herewith.

The Panel is of the opinion that the attorney may not compensate the providers of medical services with funds received on behalf of the client without the consent of the client. The responsibility to fulfill these obligations rests with the client. Should the client persist in refusing to meet these obligations, the creditors may pursue legal avenues to secure payment of the debts. If the matter is not readily resolved, the attorney, as the stakeholder, should pay the funds into the court registry in an interpleader proceeding.

Ethics Advisory Panel advice is protective in nature. There is no requirement that an attorney abide by a Panel opinion, but if he or she does, he or she is fully protected from any charge of impropriety.