Pennsylvania outpatient providers who treat injured patients work mainly through signed lien agreements and letters of protection, auto insurance medical benefits and health insurance. For car-crash injuries, the state's auto insurance law caps what a provider may accept at 110% of the Medicare amount, and Pennsylvania courts have applied that cap to payments from liability settlements, not just auto medical benefits. In court, past medical damages track what was actually paid, not full charges.
At a glance
| Question | Answer |
|---|---|
| Statutory lien for outpatient providers | Not confirmed in a primary source |
| Main law | For car-crash cases: Motor Vehicle Financial Responsibility Law, 75 Pa.C.S. § 1701 et seq., especially § 1797 (cost containment) |
| What outpatient providers usually rely on | Signed lien agreement and letter of protection, plus auto first-party medical benefits (at least $5,000) and health insurance |
| Notice or filing | No statutory lien procedure. For auto injuries, providers must bill the auto insurer, not the patient (§ 1797(a)). |
| Limits on the amount | Auto injuries: no more than 110% of the applicable Medicare amount, or the provider's usual charge if lower. This also applies when liability coverage pays (Danner). |
| Health insurance and billing the patient | Auto: auto medical benefits pay first and health coverage is excess (§ 1719). The provider may not bill the patient for the difference between its charge and what the auto insurer paid, and may bill the patient for unpaid services only after auto coverages are exhausted. |
| Billed vs. paid in the case | The patient recovers the amount paid and accepted as payment in full, not the billed amount (Moorhead, Pa. 2001). Auto plaintiffs also cannot recover first-party benefits paid or payable (§ 1722). |
| Recent changes (2023–2026) | None confirmed in a primary source |
Is there a lien law for outpatient providers?
We could not find a Pennsylvania statute that gives physicians, chiropractors, physical therapists, imaging centers or surgery centers a lien on a patient's personal injury claim or recovery. Outpatient providers in Pennsylvania depend on the patient's auto first-party medical benefits, health insurance, and a signed lien agreement or letter of protection.
Notice and filing
Without a lien statute, there is no required notice form or filing. For auto injuries, a provider covered by 75 Pa.C.S. § 1797 "may not bill the insured directly but must bill the insurer for a determination of the amount payable." Every auto policy must include at least $5,000 in first-party medical benefits (75 Pa.C.S. § 1711(a)).
Limits on what the provider is paid
For car-crash injuries, Pennsylvania's cost containment rules (often called Act 6) set the ceiling:
- 110% of Medicare. A provider treating an injury covered by liability, uninsured or underinsured motorist, or first-party medical benefits may not "require, request or accept payment" above 110% of the applicable Medicare amount, or its usual and customary charge, whichever is less. If Medicare has no amount for the service, the cap is 80% of the provider's usual and customary charge. Level I and II trauma centers and qualifying burn facilities follow a different rule for acute care (§ 1797(a)).
- It reaches liability settlements. In Pittsburgh Neurosurgery Associates, Inc. v. Danner, 733 A.2d 1279 (Pa. Super. 1999), a provider treated a car-crash patient under a letter of protection after the $5,000 in first-party benefits ran out, then sued the patient and his law firm for a $16,579 balance after a liability settlement. The Superior Court affirmed judgment for only $5,523.25, holding that cost containment is not limited to care covered by first-party benefits and applies where liability coverage pays. The court noted that a provider may collect fair market value if the alleged at-fault party is found not liable, since no liability coverage is then involved.
- Insurers must apply it. Insurers must apply the Medicare payment limits to bodily injury liability, uninsured and underinsured motorist, and first-party medical coverages. The limits stop applying when auto coverage pays nothing toward the bill (31 Pa. Code § 69.22(a), (h)).
- Peer review. An insurer may challenge whether care was reasonable and necessary through a peer review organization within 90 days of receiving the bill. The patient may not be billed during peer review. If care is found unnecessary, the provider may not collect for it and the patient is not responsible (§ 1797(b)).
Lien agreements and letters of protection
Letters of protection are used in Pennsylvania; Danner involved one. In auto cases, a contract does not override § 1797. Danner shows the cost containment cap limits what the provider can collect, even under a letter of protection, when liability coverage pays.
The attorney's duty to pay the provider
Pennsylvania's duty comes from the ethics rules, not a lien statute. Under Pa. Rule of Professional Conduct 1.15, a lawyer who receives funds in which a third person has an interest must promptly notify that person and promptly deliver what that person is entitled to. If the client and a third person dispute the funds, the disputed portion must be kept separate until the dispute is resolved, and undisputed amounts paid promptly. Comment 8 says that where a third party has a non-frivolous lawful claim against specific funds, the lawyer must refuse to surrender them to the client until the claim is resolved, and should not decide the dispute alone.
Health insurance, no-fault and billing the patient
For car-crash injuries:
- Auto coverage pays first. First-party auto benefits are primary, and health plans are excess (75 Pa.C.S. § 1719(a)).
- Bill the insurer, not the patient. Providers may not bill or try to collect from the patient the difference between their full charge and the amount the insurer paid (§ 1797(a)).
- After auto benefits run out. When benefit limits are exhausted and only part of the services were paid, the provider may bill the patient for the remaining services not paid under the auto policy (31 Pa. Code § 69.22(e)). If auto coverage paid nothing, the Medicare limits no longer apply and the provider may bill the patient or another carrier (§ 69.22(h)). Danner reads these rules together with liability coverage: while a liability recovery is in play, the cap applies.
- No subrogation from the tort recovery. There is no subrogation against the patient's tort recovery for first-party auto benefits or for health-plan benefits paid under § 1719 (75 Pa.C.S. § 1720).
Billed vs. paid medical damages
In Moorhead v. Crozer Chester Medical Center, 765 A.2d 786 (Pa. 2001), the parties agreed the reasonable value of care was $108,668.31, but the hospital accepted $12,167.40 under its Medicare and Blue Cross agreements. The Pennsylvania Supreme Court held the patient could recover only the amount paid and accepted as payment in full, and that the written-off amount was not a collateral source payment.
In auto cases, a patient eligible for first-party benefits or health-plan benefits under § 1719 cannot recover "the amount of benefits paid or payable" in the tort case (75 Pa.C.S. § 1722). Danner describes adjusting a verdict to reflect cost containment so there is no double recovery.
The result: Pennsylvania tort recoveries for past medical bills tend to track amounts actually paid or payable under fee caps, so a lien for full charges may be larger than what the case can recover for those bills.
Recent changes
We could not confirm in a primary source whether any law enacted between 2023 and 2026 changed these rules.
What this means for your practice
- With no lien statute to rely on, the provider's protection is the signed patient lien agreement, the attorney's written letter of protection and the attorney's duties under Rule 1.15.
- For car-crash patients, the auto insurer is billed first, and payment is capped at 110% of the Medicare amount or the provider's usual charge, whichever is lower.
- Under Danner, that same cap applies when the provider is paid from a liability settlement under a letter of protection.
- A car-crash patient may not be balance billed for the gap between the provider's charge and the auto insurer's payment. Billing the patient for unpaid services is allowed only after auto coverages are exhausted.
- Past medical damages are recovered at amounts paid or payable, not full charges (Moorhead, § 1722), which limits the pool available for a full-charge balance.
Sources
- 75 Pa.C.S. § 1797, customary charges and peer review
- 75 Pa.C.S. § 1711, required medical benefits
- 75 Pa.C.S. § 1719, coordination of benefits
- 75 Pa.C.S. § 1720, subrogation
- 75 Pa.C.S. § 1722, preclusion of recovering required benefits
- 31 Pa. Code § 69.22
- Pa. Rule of Professional Conduct 1.15 and Comment 8, 204 Pa. Code § 81.4
- Pittsburgh Neurosurgery Associates, Inc. v. Danner, 733 A.2d 1279 (Pa. Super. 1999)
- Moorhead v. Crozer Chester Medical Center, 765 A.2d 786 (Pa. 2001)
How we verified: 75 Pa.C.S. §§ 1711, 1719, 1720, 1722 and 1797 were read on the official palegis.us site, 31 Pa. Code § 69.22 and Rule 1.15 on the official Pennsylvania Code site, and the Danner and Moorhead opinions in full-text reproductions. Research current as of November 12, 2026.