What are medical liens?

Medical Liens and Personal Injury SettlementsSome doctors and hospitals will provide medical services on a lien basis.  This means that they provide the medical services for an injured patient, yet they wait for payment until after a personal injury suit is settled.  The debt remains an obligation of the patient, however, the medical providers asserts a lien against any financial recovery by the injured patient.  Knowing the amount of the medical lien will be important to determine whether a settlement offer is adequate for your needs, including the payment of any medical liens.

About Medical Liens

Medical lien are contractual agreements between the doctor, the patient and the attorney, to have the medical provider provide medical service in advance of payment.  The doctor, patient and lawyer all agree to provide the doctor payment from any settlement or judgment prior to the patient receiving any funds from a settlement.  This allows the patient to get the necessary medical care without having to worry about paying for the services during the recovery process.  Ultimately, if there is no recovery, the patient remains responsible for the payment of the charges.  Other types of medical liens involve a health insurance provider seeking reimbursement for previously paid medical bills.  The health insurer often has contractual language which requires the insured person to repay any financial advances made by the health insurance company. Finally, there are some liens imposed by law for emergency medical services rendered to an injury victim or liens to protect government healthcare payments.

Generally, there are two categories of liens, statutory liens and contractual liens.  Statutory liens are imposed by law, while contractual liens are agreements between patients and doctors.  Statutory liens are imposed to  government and hospital interests.

Contractual liens are those which exist due to the terms of a specific contract between two parties. Most medical liens fall into this category based on one of the following:

  • Health insurance: The majority of health insurance providers have clauses in their agreements that require you to repay any health insurance benefits later recovered from a third party in a personal injury settlement.
  • Medical payments from your own auto insurance carrier: If your car insurance covers medical expenses related to your accident and another driver is later found to be at fault, you may have to repay some or all of the benefits after receiving a settlement.
  • Agreements to treat: When someone is injured in a car accident and does not have medical insurance, providers will sometimes agree to treat on a lien basis. In this case, the doctor or care provider is agreeing to provide immediate treatment with no pay until a settlement is received.

Negotiating a Lien

Although it may seem like a lien would require you to pay back every dollar of medical care you received, this is not necessarily the case. Lien amounts can often be negotiated, depending upon the terms of the contract. In many cases, an experienced personal injury attorney can convince a lienholder to accept less than the full amount for repayment.

Negotiating a lien is often effective because the lienholder's financial interests are in line with the injured patient. If you go to trial and lose, the lienholder receives nothing. Therefore, they are often likely to accept less than what is fully owed as an incentive to resolve your personal injury claim out of court.

When your attorney negotiates a lien on your behalf, it is common to consider how the cost of attorney's fees factor into the settlement. Since personal injury cases are accepted on a contingency fee basis, your attorney receives no payment for his services until a settlement is received. Then, a percentage of the award is provided as reimbursement for representation. As such, lienholders are often willing to accept responsibility for a prorated share of the legal costs associated with your case.

Penalties for Ignoring the Law

You are legally required to report any personal injury claims that are pending to Medicare, Medi-Cal, or the health insurance which is paying for your medical treatment. Additionally, sophisticated computer software is used to flag records of injuries that could indicate an accident where someone else may be liable for payment—such as whiplash or broken bones. When this happens, you will receive a form asking for more information about who may be responsible for your injuries.

If you do not report your pending personal injury claim to the appropriate party, you risk jeopardizing your eligibility for future benefits. You could also be sued to recover the amount of the lien plus additional penalties.

How Inland Empire Law Group Can Help

In any personal injury case, the best way to protect your right to compensation for medical expenses, lost wages, and pain and suffering is to obtain experienced legal representation. Your attorney can assess the value of your case, gather evidence, negotiate with insurance companies, and help to resolve any outstanding liens to ensure that the final settlement you receive is adequate for your needs.

To learn more, call to schedule a free, no-obligation consultation with the dedicated attorneys at Inland Empire Law Group. Appointments are available at our Rancho Cucamonga and Victorville offices.