A medical lien is a legal document that gives a health provider the right to claim a part, or all, of your lawsuit settlement, as repayment for services offered.
If you are involved in any type of accident caused by someone else’s negligence, getting medical attention is paramount for your health and claim filing process. But what happens if your health insurance does not cover that particular treatment? Or when you are too unconscious to give your financial information? What if you cannot afford care that you direly need until the settlement kicks in?
In such cases, the hospital or specialist will provide treatment, then attach a lien to your settlement. Learn how this affects your personal injury settlement and what you can do about it.
How Will the Medical Lien Affect My Settlement Amount?
Normally, the hospital or specialist doctor will ask you to sign a Letter of Protection (LOP), which is drafted by your personal injury attorney. The document assures the health provider that all the care and treatment provided will be reimbursed from the expected settlement amount.
This legally binds you to use some of your settlement money to pay the healthcare provider. The deduction typically happens after the defendant’s insurance company has released the check to your attorney, but is still in a trust bank account. If you received medical treatment worth $20,000, your settlement amount will be less this amount, among other expenses.
However, it is possible to negotiate a lower deductible amount; more about this later in the article.
When Should I Expect to Receive a Medical Lien?
It is not uncommon for liens to show up after months or years of receiving settlement funds. Learning when to expect a medical lien will help you stay on top of your financials.
- You do not have any health insurance or your existing plan does not cover the type of treatment that the injury requires. In this case, the hospital or specialist doctor will donate their care and expect repayment after your lawsuit settlement.
- Your insurance coverage paid for the treatment of an injury that was caused by someone else’s negligence. Most insurance policies are only liable to cover their clients only in accidents caused by them alone.
- Medicare or Medicaid covered the treatment fees. This type of lien is common for appearing after a relatively long time.
- The workers union compensation program contributed to your recovery. When injuries result from a third-party’s negligence, the union’s insurer might attach a lien too.
The Dos and Don’ts of Medical Liens
Do Not Ignore a Medical Lien
A medical lien enjoys both state and federal legal protection. As such, the hospital has a right to sue if you fail to pay the medical liens, with consequences ranging from minor penalties to serious criminal charges.
Do Get an Attorney’s Help
Handling a medical lien can easily become overwhelming, especially if they are from multiple parties. If you live in California, a Sacramento personal injury lawyer can simplify all these legal complexities for you.
The attorney will evaluate the lien’s validity and either negotiate for a reduced amount or dispute it all together. They will also factor these damages in your claim if you are yet to sign a legal release on your lawsuit.
Do Negotiate for a Compromise
Luckily, it is entirely possible to negotiate a medical lien. First, you can cite current hardships such as long-term special care that you need, ongoing-treatment, inability to earn a living, and so on.
Hospitals know that personal injury lawsuits can take years to settle and some will be willing to negotiate an out-of-pocket plan that does not come from your settlement.