How to Deal with a Personal Injury Case Lien
For many people who have been injured in an accident, it is their first time ever dealing with the process of a personal injury claim, the legal system, and insurance companies. There are many aspects of a personal injury case that can be confusing and frightening. For example, dealing with a personal injury case lien is not something that many victims anticipate or were even aware of prior to being injured. A lien essentially is a “debt” that is owed to a particular party – either a healthcare insurance company, Medicare, or a doctor's office – that usually must be paid out of any settlement funds the injured party receives in their case. It is important to understand the different types of liens, how they impact your case, and how to deal with them in order to maximize your recovery.
On one hand, you need ongoing medical treatment. On the other, a medical provider, insurance company, or government entity needs reassurance that they will eventually receive repayment or reimbursement for services rendered or benefits paid on your behalf. A lien can satisfy both objectives without causing the injury victim to incur additional expenses.
Here, injury attorney James Hunt, serving New York, helps you understand what personal injury case liens are, what types payors might use, and how to deal with one through strategic action. This information will help you understand your situation better and provide options for negotiating lien payments fairly.
What Is a Personal Injury Case Lien?
A personal injury case lien is when a third party acquires legal rights over an insurance settlement or civil judgment to pay off your medical expenses on your behalf. When a lien is in place, the lien must be satisfied before you receive a final check. The type of lien in place depends upon the party with subrogation rights, which allows them to recover any medical expense payments they made for you while you received treatment for your injuries.
Types of Personal Injury Case Liens
Many different entity types can file a personal injury case lien against the insured person or beneficiary. The type of lien filed depends upon the facts and circumstances of your case. The most common include medical, workers' compensation, government (Medicare/Medicaid), private health insurance, and ERISA liens.
Below, we have outlined the five different types of personal injury case lines that you can negotiate:
Type 1. Medical Liens
Hospitals or doctors can obtain a lien to recover expenses related to the accident victim's medical treatment per NY Lien L § 189 (2021). Certain medical providers may request that you sign a letter agreeing to a lien for services rendered. Liens against medical providers must adhere to strict protocols for obtaining a valid lien against you. If you need medical treatment or surgery after your accident, but you do not have health insurance or the financial ability to pay, some doctors will provide medical treatment and even surgery under a lien. This means that you would have to pay the doctor's bills out of any settlement funds you receive in your case.
Type 2. Workers' Compensation Liens
Workers' compensation insurance compensates you for any medical bills or lost wages you incurred due to a work place injury. If someone other than your employer caused your injuries, you could recover third-party compensation for their liability and other damages, such as physical pain and suffering. However, if workers' compensation insurance covered medical treatment or lost wages, the law allows them to have a lien on the third party settlement recovery.
Here is an example. You are employed as a trucker driver for a company. You are driving in the course of your employment and another car hits your vehicle, causing you injuries. You will receive workers' compensation benefits insofar as your medical treatment will be paid by workers comp, and if you miss days of work, you will receive lost wages through workers comp insurance. But you will have a separate lawsuit against the negligence driver of the car that hit you. Once that case against the other driver is settled, the workers' comp insurance carrier will have a lien on any settlement funds you receive from the vehicle accident case. The lien will be for the amount of money the workers' comp insurance company paid out for your medical treatment and lost wages. While these liens must be paid by law – there is no way around it – they are sometimes negotiable.
Type 3. Government Liens
The general rule of thumb is that if a government agency or department paid for any portion of your medical care, they are entitled to reimbursement if you later recover compensation from another party for your injuries. Depending on the type of government program, certain government agencies such as Medicare, Medicaid, and the Veteran's Administration (VA) may have varying rights to enforce a lien against a settlement. Again, while these liens must be paid by law – there is no way around it – they are sometimes negotiable.
Type 4. Private Health Insurance Liens
One of the most common liens is from the victim's private health insurance company. Most health insurance contracts provide reimbursement to the insurance company if the insured receives compensation for an injury as a result of a claim against a third party. Some states have laws that limit or restrict the application of these liens. These liens typically must be paid out of any settlement funds, but they are also subject to negotiation.
Type 5. ERISA Liens
The Employee Retirement Income Security Act (ERISA) is a federal law that establishes minimum standards for most companies' voluntary retirement and health plans to protect participants. As such, you can expect an ERISA lien if they paid any of your benefits from a personal injury accident. Sometimes non-ERISA plans are not entitled to
Related Article: What Are Pain and Suffering Damages?
How Do Personal Injury Liens Get Paid?
If a lien exists against your settlement or judgment award in New York, it must be satisfied before obtaining the settlement payment. Typically, priority goes to paying government liens first and then medical liens. The remainder of your award will be used to discharge all other costs and expenses, including attorneys and legal fees.
Upon payment of these amounts, you will receive your final settlement check.
You cannot simply ignore a lien or refuse to pay it. If you do, the lien holder may be entitled to pursue a lawsuit against you to recover the amount of the lien. And your attorney is obligated to pay any liens out of any settlement funds the lawyer receives.
How to Negotiate a Personal Injury Case Lien
The good news is that many liens are negotiable. It is first most important to obtain the “final” lien amount. You should hire an experienced New York injury attorney who can help you negotiate down any lien amounts. It is critical to negotiate lien amounts whenever possible. Often, the negotiation will hinge on your ability to persuade the lienholder that your request is justifiable. Therefore, you will strongly want to consider contacting a New York personal injury lawyer to help you devise a case strategy.
Here are a few essential tips that you can use to initiate the personal injury case lien negotiation process.
Tip 1. Establish Your Lien Liabilities and Obligations Early
It is critical to accurately determine your lien liabilities early in the process to negotiate effectively. However, not all lienholders will agree to negotiate the terms before settling. If they are unwilling to negotiate, your attorney could emphasize that courts issue judgments based on applicable laws, which is a position that plays in your favor.
Tip 2. Argue for Actual Medical Expenses
You or your attorney should review the lien amount and itemized list of charges to make sure that all the medical expenses listed are related to your injury. Many times, they have mistakenly included medical treatment that had nothing to do with your injury. For example, if in a slip and fall accident you injured your shoulder, you will see treatment dates listed on a lien document that are related to shoulder treatment. But there might also be treatment listed for the subsequent time when you twisted your knee by accident and sought treatment by your doctor. The treatment for your knee has nothing to do with the slip and fall accident where you injured your shoulder, and therefore that medical expense should be removed.
A thorough billing audit will determine what medical treatment was necessary and whether the provider priced it reasonably. Unrelated or excessive medical expenses should be excluded from a medical lien.
However, the lienholder does not just have to take your word for it, and internet search results will not suffice as evidence to support your arguments.
Tip 3. Hire An Experienced Injury Attorney
Hiring an experienced personal injury attorney ensures that you can avoid legal mistakes and unnecessary delays entirely. An experienced injury lawyer will know how to deal with any liens that may pop up in your case.
Related Article: How Do I Pay for My Medical Expenses After an Accident?
Start Dealing with a Personal Injury Case Lien Today
The strategies outlined above are by no means exhaustive, and an experienced personal injury attorney can assist you in negotiating a fair settlement, even when dealing with liens. Negotiating with a medical provider, government entity, or insurance company can be challenging without the added pressure of preserving admissible evidence and possessing a solid command of the law. Legal representation will protect your case and legal rights while devising a case strategy that makes sense for your situation.
Connect with Hunt & Associates, LLC for a Free Consultation
Hunt & Associates, LLC will help you by aggressively pursuing your case and negotiating any liens that might be asserted. Our legal team will take the time to review your case and determine what legal options are available for negotiating lien payments. Call us now for your Free Consultation by calling (866) 456-HUNT (4868) or messaging us online here.
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