‘They wanted to take $184,000’: Boise man sues neurosurgeon over medical lien

Guy DeKlotz underwent emergency surgery at Saint Alphonsus Regional Medical Center in Boise after his spine was fractured in a car crash in 2021.

Months later, the Boise man found himself taking up an unexpected legal battle — not with his insurance company, but with the very doctor who repaired him — over a six-figure medical lien that the doctor filed against DeKlotz instead of billing his insurance company.

That practice, so unusual that the former CEO of Idaho’s largest hospital system said he’s never heard of it before, reached the Idaho Supreme Court.

The case raised an important question: Could such a lien be slapped on anyone who shows up at an Idaho emergency room seeking medical care?

A lower court sided with the physician, saying DeKlotz never received a bill so he had no debt. But the high court reversed that decision, siding with DeKlotz — and perhaps easing the threat of insured patients facing liens even for bills their insurers would cover.

A lien is a claim on real property, such as a house, until the owner of that property satisfies a debt owed to the lienholder. In Idaho, liens are filed with county clerks and are public records.

Dr. Paul Montalbano, co-owner of Neuroscience Associates in Boise and the on-call trauma neurosurgeon at the hospital that night, surgically repaired DeKlotz’s fractures and provided post-operative care with the help of a surgical nurse employed by his practice. But instead of billing Select Health, DeKlotz’s insurer at the time, Montalbano and Neuroscience Associates filed a $183,829.60 lien on any money DeKlotz might recover from a personal injury claim following his accident.

Montalbano’s lien included $160,016.64 for the two-hour surgery and post-operative care and $23,812.96 for nursing care provided during the surgery.

DeKlotz hired Boise injury attorney Kurt Holzer, who told Neuroscience Associates’ claims coordinator that the lien was illegal under the Idaho Patient Act signed into law by Gov. Brad Little in 2020. Holzer explained that the law required Montalbano to first bill DeKlotz’s insurance, court documents say. The claims coordinator responded that the lien was legal under the state’s medical lien statute at the time.

The law was later amended by the Idaho Legislature in 2022 to address modern health care billing and collection practices. It clarified that providers are required to bill patients’ insurance before taking any “extraordinary collection actions,” such as filing a lien, sending a bill to collections or suing.

Still, the claims coordinator offered to discount the lien by 60%, to $73,531.84. Holzer maintained that Neuroscience Associates was required to bill DeKlotz’s insurance. The claims coordinator retracted the discount. So DeKlotz took them to court.

“We argued that the Idaho Patient Act requires you to bill health insurance coverage first,” Holzer told the Idaho Statesman by phone. “The Legislature actually made it even more clear when they amended the statute.”

Holzer also argued that Montalbano was overcharging drastically. He told the Statesman that the average payment in the U.S. for the same services Montalbano rendered DeKlotz is about $18,000. The maximum reasonable value, according to a billing analysis expert who testified at the trial, is $39,000, Holzer said.

Fourth District Judge James Cawthon in Boise initially ruled in Montalbano’s favor, deciding that DeKlotz wasn’t personally on the hook for the debt because he “was never sent an invoice. There was never a debt to begin with.”

Montalbano had testified that he never demanded payment from DeKlotz and is generally willing to help negotiate down liens from his regular fee schedule.

But DeKlotz appealed to the Idaho Supreme Court, which reversed the lower court’s ruling. Justice Colleen Zahn wrote in an opinion filed Tuesday, with all four other justices concurring, that the medical lien is invalid because Montalbano did not bill DeKlotz’s insurance first, constituting an “extraordinary collection action” under the Idaho Patient Act. The Supreme Court said that DeKlotz would have been responsible for the debt until it was discharged.

“Montalbano’s arguments are unpersuasive,” the opinion said. “The plain language of the patient contract indicates that DeKlotz was liable as of the date services were rendered and that he would remain liable for any balance remaining after third-party insurance is billed.”

Such liens were and still are legal for unpaid medical bills. For uninsured patients, especially, they remain a threat.

Because the Supreme Court held that Montalbano’s lien was invalid, Zahn said it didn’t need to address DeKlotz’s alternative argument that Neuroscience Associates’ charges were unreasonable.

“Paul Montalbano is a charming, talented surgeon,” Holzer told the Statesman. “This is not about the quality of the care provided. It was an expensive, quality spinal surgery. He absolutely should get paid for those services. But not extra. They use this process to try to get extra regularly. In my opinion, the amounts that he charged were insane.”

An attorney for Montalbano and Neuroscience Associates did not respond to questions or a request for comment for this story. A spokesperson for Saint Alphonsus Health System said it has no comment and noted that it is not a party to the litigation.

Dr. David Pate, the former CEO of St. Luke’s Health System, said medical liens are most commonly used when a health care provider treats a person who is not insured.

“I have never heard of filing a lien before billing, so I suspect it is not a common situation,” Pate told the Statesman. “To me, you don’t have a debt until the service has been provided and you have been billed to indicate how much you owe.”

Holzer said the concern that led to the creation of Idaho’s medical lien law in the first place was this: If a person gets in a car accident and a doctor or hospital doesn’t get paid because the patient doesn’t have the money, but that patient then makes a successful claim for their loss, perhaps from another party’s insurer, then liens can be filed against the patient to pay the medical practitioners.

DeKlotz’s lawsuit was initially filed as a class action, when one or more plaintiffs sue and request to be certified as representing a larger group. Holzer said they plan to pursue the class-action certification again now that the Supreme Court has sent the case back to the lower court with instructions to issue a judgment in DeKlotz’s favor.

“This is about business practices,” Holzer said. “They’re taking money from injured people’s recoveries whose lives have been upended, like Mr. DeKlotz, who had two exploded vertebrae in his spine and still deals with pain from that incident. They wanted to take $184,000.”

The Supreme Court also awarded DeKlotz attorneys’ fees he incurred on the appeal.

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