Hospitals may be able to obtain full or partial payment for outstanding medical bills from a deceased patient’s estate.  The procedure for making a creditor’s claim against an estate is governed by state law and varies from state to state.  This article outlines the basic procedures for making creditors’ claims in probate actions in Washington or Alaska.   

When a person dies, a probate action may be commenced after his or her death.  Probate is the process by which assets are gathered, applied to pay debts, taxes and other expenses, and then distributed to beneficiaries.  Probate actions are most commonly filed in the county in which the deceased person last resided or owned property. 

Once a probate action is filed, the personal representative appointed to administer the estate will usually provide a Notice to Creditors.  The Notice to Creditors requires that anyone with a claim against the estate present the claim within a specified amount of time or be forever barred from maintaining an action against the deceased person’s assets.  The Notice to Creditors must be published once a week for three consecutive weeks in the county in which the probate action is pending.   In Washington, the personal representative may also elect to provide “actual notice” by serving the Notice to Creditors directly on known creditors.

In response to a Notice to Creditors, any interested creditor may assert a Creditor’s Claim. The Creditor’s Claim includes the name and address of the creditor, the nature and basis of the claim, the amount of the claim, and should be signed by the creditor.  The Creditor’s Claim must normally be filed within four months after the first publication of the Notice to Creditors, although this time frame may vary under certain circumstances.  In Washington, the Creditor’s Claim must be filed with the court and served on the personal representative.  In Alaska, either filing with the court or service on the personal representative is sufficient 

Once a Notice of Creditor’s Claim has been filed, the personal representative has a duty to either allow or reject the claim.  Valid, timely claims for medical expenses are usually allowed.  If, however, the personal representative determines that a claim should be rejected, the personal representative must provide a formal notice of rejection to the claimant.  The burden is then on the claimant to bring a lawsuit to enforce the claim.  Laws in Washington and Alaska require that any such lawsuit be brought within a very short time after notice of rejection of a claim.       

After all of the assets of the estate have been gathered and inventoried, and the time for filing claims has expired, the estate is distributed first to pay allowed claims, and then to beneficiaries.  This process may take anywhere from a few months to over a year,  depending upon the nature of the assets and liabilities at issue.  While most hospital expenses are included with other ordinary debt owed by the estate, hospital expenses that relate to the deceased person’s last illness may be paid prior to other types of debt.  At any time in the probate process, the personal representative also has the ability to compromise claims owed by the estate. 

Although an attorney is not needed to assert an uncontested Creditor’s Claim, the rules pertaining to these claims contain various nuances, are detailed and require timely action.  As such, hospitals may elect to delegate responsibility for filing Creditor’s Claims to an employee or contractor familiar with the procedures governing probate proceedings.     

Note:  This article is published for informational purposes only. These materials should not be considered as, or a substitute for, legal advice.