What Is A Medical Lien?

Medical Lien Sacramento

When someone is involved in an accident it is quite common for the victim to incur medical bills. Even a single trip to the emergency room and a visit to a doctor for follow up care can cost thousands of dollars, and the price can go out of sight if the victim requires surgery, a hospital stay and physical therapy after the accident. In many cases, the victim’s insurance company pays the up-front costs for medical bills, but that does not mean that the insurance company will not try to recoup those costs. If the victim is awarded money in a personal injury settlement, the insurance company may impose a medical lien on the settlement amount and take some of the money to recover its losses.

Medical Liens and Care Providers

Insurance companies, hospitals and government agencies may impose medical liens when they have advanced money to pay for a victim’s treatment and the victim recovers a settlement from the at-fault party in an accident. There are four common situations in which a medical lien is filed against the proceeds of a settlement:

  • An insurance company has paid for medical care under the terms of the victim’s coverage. When a victim uses his or her own insurance to pay for medical care resulting from an accident, the victim’s insurance company may pursue a medical lien against the proceeds of the settlement.
  • A hospital has “donated” care. If you were not insured but the hospital treated you anyway, the healthcare provider may pursue a lien against your settlement for its services to you.
  • A government agency paid for your care. If you are a recipient of Medicaid or Medicare, these agencies may pursue a lien against your settlement to recoup the cost of payment.
  • Worker’s compensation paid for your care. If you received benefits under worker’s compensation but subsequently filed a personal injury lawsuit, the worker’s compensation insurance provider may file a lien against any proceeds you receive from your case.

California’s Medical Lien Laws

California courts have generally held that federal law pre-empts state law when it comes to medical liens. If a person participates in Medi-Cal, Medicaid is actually the governing entity that may claim subrogation in case of a personal injury settlement.

California legal ethics also require an attorney to help the client distribute funds properly from a personal injury settlement. Attorneys should investigate claims to be sure they are valid and “perfected” or that everything that must be filed is in place before paying the medical lien claim.

In California, a personal injury attorney should not place the burden on the client of disbursing the funds to the lienholder when a settlement is made. Instead, a good personal injury attorney will handle any medical lien claims that may arise by negotiating the balance of the lien.

Negotiating a Lien

Before paying a lien in full, the victim and his or her attorney may attempt a negotiation. Many claimants are very willing to reduce the amount of their demands if it means they will be paid immediately. Therefore, a good personal injury attorney will always examine the claim to be sure it is valid and then attempt to negotiate with the lienholder for a reduction of the amount in return for immediate payment.

It is not always easy to negotiate a lien settlement but it is a necessary part of the entire subrogation and medical lien process. If you are facing a medical lien for care you received as the result of a personal injury accident, contact a personal injury attorney immediately for help