Court won't review lien policy, delivering victory to hospitals. (Health Care).

THE hospital industry has scored a legal victory in defense of its practice of placing liens on monetary damages won by injured patients even after being paid by insurers for treatment.

The state Supreme Court declined to review a Court of Appeal ruling that upheld the practice in Swanson v. St. John's Regional Medical Center, meaning that the lower court ruling is the law of the state -- at least temporarily.

Hospitals say the practice, which usually involves placing liens on damages won by injured auto accident victims, helps compensate them for the true cost of giving care to patients insured through managed care.

"We are pleased with the court's ruling," said Mark Klein, a spokesman for Catholic Healthcare West, owner of St. John's. "This is good public policy and will help emergency rooms stay open in California."

Of course, patients who have seen portions of their damage awards seized by hospitals don't see it this way. To them and their attorneys the hospitals are doing no less than double dipping. And despite the Supreme Court's action June 26 they still have hope their view may prevail.

That's because another state appellate court has yet to issue a final ruling on a separate challenge of the practice in a case involving Scripps Health in San Diego. A preliminary ruling actually favored patients, but the hospital successfully convinced the appeals court to reconsider the matter.

Since the high court did not take up the case and issue a ruling, the appellate court, is not obliged to follow the Swanson precedent.

Should the appellate court stay with its initial ruling, there would be two contrary appellate court rulings, a situation likely to force a full hearing before the Supreme Court.

"This is not the last word," maintained William John Weilbacher, the plaintiff's attorney in Swanson.

Staff reporter Laurence Darmiento can be reached at [phone] ext. 237, or at [e-mail].