If you are reading this, it means some entity has asserted a lien on the proceeds of your personal injury case. This post will explain what liens are, how they affect your case, and what we can do about them. Call me to discuss it if we have not talked about this issue already, and if you have questions after reading this.
The number one lien that is likely to be asserted on your personal injury case is from a health insurance company. The law allows the insurer to get their money back if the medical care they paid for was caused by someone else’s negligence. You have a contract with your health insurer (whether you remember it or not) that allows them to assert this right in any personal injury case you may have. That right to get repaid is called a lien.
The health insurer will usually assert their right to a lien in writing, and then I have to check on their total lien at the conclusion of your medical care. I won’t even know how much the lien will be until you have fully recovered from your injuries, been released by your doctor, and all of your medical bills are paid.
What this means is that I have to take money out of your settlement to pay your health insurer for any amounts your health insurance spent on medical care directly related to your accident case. This reduces your recovery in your personal injury case. I know. This stinks. Most people hate finding out they may have to pay back their health insurer.
Liens are, to be frank, a big giant pain in the rear end for everyone. They take money directly from your personal injury case – money that would otherwise go to you. I hate dealing with them too. The law essentially forces me to work for the lien holder – usually your health insurance company. They didn’t hire me. They don’t pay me. But I am bound by the law to take care of getting them repaid from the proceeds of your case. If I don’t obey the law, I could face a lawsuit myself, or even ethical sanctions. I hate this as much as you.
However, the law is pretty much in favor of the insurance companies on this one. We personal injury attorneys used to be able to assert several legal doctrines to get them to reduce their lien. The Supreme Court took all that away a few years ago, and Congress has done absolutely nothing about it since then. So if you really hate the way liens are asserted in your personal injury case, you should write your Congressman. (I know, I know. Good luck with that! But that is absolutely where the blame lies so you should write them anyway.)
Let me get off my soapbox and back to explaining liens. The fact of the matter is, that if your health insurance company asserts a lien and lets you or me know about it, I have to protect their lien. If the federal government has a lien (Medicare, Medicaid, or the Military), then I actually have a legal duty to tell them about their right to a lien. I don’t work for a private insurer, and they have to jump through all the right hoops to assert a lien. But I do work for the federal government! I am duty bound to protect their lien.
To be fair, this process does work for you in one way. The health insurer does not pay your doctor’s bill in full. They always reduce the amount they pay. (Believe me, doctors get really jerked around by health insurers.) And we only have to pay back the actual dollar amount the insurer paid the doctor – not the full value of the doctor’s bill. If we had to repay your doctor, we would owe him or her the full bill.
For example, say your doctor charges $1000 for a procedure. Your health insurer will pay about $500 on that bill. When we repay that lien, we only have to pay the $500 actually spent, not the full doctor’s bill. So using health insurance does work for you in a personal injury case, despite having to deal with liens.
We will try to deal with liens in your personal injury case the best we can, given the current state of the law. There are a lot of things I do to make sure any lien is valid, is properly itemized and accounted for, and is a low as possible. And we personal injury attorneys are trying new things all the time to defeat liens. I am not going to explain all of that in a publicly available blog post, but rest assured I will only pay a lien that I must pay, and only the amount that I must pay.
Call me to discuss this if we haven’t spoken already and you have questions. Liens are a headache, but they are a fact of life in personal injury cases. We will try to minimize the effect on you while obeying our ethical and legal duties to protect liens.