How will I pay my personal injury medical bills?
This question weighs on the hearts and minds of all of our clients. Healthcare liens are part of the answer. If you get a settlement or judgment in a personal injury lawsuit, that amount will include compensation for the cost of your medical treatment. Your healthcare provider or insurer may seek reimbursement for the share of your personal injury medical bills you still owe, or that your insurer paid, by asserting a healthcare lien on the lawsuit proceeds.
What Is a Healthcare Lien?
A healthcare lien is a demand for payment or reimbursement of the costs of healthcare services provided. Most states have laws authorizing hospitals, the government and insurers to assert a lien for the cost of treatment on your settlement proceeds or judgment.
Who May Assert a Healthcare Lien?
Your medical provider, insurer, or the government if you are a Medicare or Medicaid recipient or a veteran, may have a right to place a lien on your settlement proceeds or judgment if they advanced or paid for any of the costs of your treatment.
- Your Healthcare Provider: If you did not have healthcare insurance at the time of your injuries, or if your insurance did not cover all of the costs associated with your treatment, you may still owe money to your healthcare provider for the treatment you received. Also, some healthcare providers may have asked you to authorize them to assert a lien for unpaid bills in case of a lawsuit. Some states allow hospitals to assert liens for treatment provided if they cannot bill an insurer. However, certain requirements may have to be met for these liens to be valid.
- Your Insurer: If the medical treatment that you received was covered by your individual health insurance plan, your automobile insurance plan, your employer’s insurance plan, workers’ compensation, or an ERISA health insurance plan, the insurer may assert a lien. These liens are typically authorized by contract or by law. However, depending on the insurer and the laws governing the type of insurance at issue, you — or your attorney — may be able to negotiate a lien reduction.
- The Government: If Medicare, Medicaid, or the Veteran’s Administration paid for any of your healthcare costs, the government is entitled, by law, to reimbursement. Medicare and Medicaid liens are administered by the Benefits Coordination and Recovery Center. The Center will mail you a Rights and Responsibilities Letter with detailed information. Shortly thereafter, you will also receive a Conditional Payment Letter. The Veteran’s Administration will likewise typically issue a notice of lien letter. Strict deadlines for payment apply to these liens.
How Do Liens Get Resolved?
Most liens are negotiable, and most lien holders recognize that you bore the costs and risks of a lawsuit to recover your healthcare costs. Consequently, most liens can be resolved (or “compromised”) for an amount less than the amount claimed initially. Other factors that may affect the final resolution of the lien include ongoing treatment, disability, unemployment, or any other hardship that you suffered as a result of your injuries.
Funds May Be Held in Trust
After your case settles or you obtain a favorable judgment, your attorney may hold the full amount of the lien in a trust account until the lien is resolved. If you have not yet received notice of a lien when your case settles or a judgment is entered, it is wise to protect yourself by setting aside money to cover any possible lien. Your attorney will advise you of the length of time that you may need to hold these funds, based on the nature of the lien. Medicaid and Medicare, for example, have up to six years from the time of your settlement or judgment to notify you of a lien.
To ensure your rights are protected, your personal injury medical bills are paid, and you receive the maximum amount from your settlement or judgment, notify your personal injury attorney as soon as you receive notice of a healthcare lien. If you have questions about healthcare liens or any other aspect of a personal injury claim, we can help. Contact our experienced personal injury attorneys, by phone or email, to schedule a free initial consultation.