If you are reading this, it usually means I asked you to because 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.
What is a lien?
A lien is the legal right to receive property that technically belongs to another person. Usually it is in payment of some debt incurred by the person against whom the lien is asserted.
In a personal injury case, what that means is that some company wants to be paid money out of your personal injury settlement. That is money that would otherwise go to you.
Who is asserting this lien?
The number one lien that is likely to be asserted on your personal injury case is from a health insurance company. This is the likely culprit in your case.
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. They will usually send it to you. You will have to give it to me.
Why do I have to pay this lien?
The law allows your health insurance company to get their money back if the medical care they paid for was caused by someone else’s negligence.
In theory, this is easy to understand. The health insurance company has to pay money for medical care that was someone else’s fault. That other person should have to pay for that medical care. And they will pay for that medical care as part of your personal injury case.
Therefore, the part of that settlement that goes to pay for medical care should go to the one who paid for it – your health insurance company. That is the theory.
In reality, liens by health insurance companies can be grossly unfair to the victim of a personal injury case.
What does this mean for my case?
If I am placed on notice of a legally enforceable lien, I have to pay it out of your settlement. I do not have a choice. Federal law and legal ethical rules require it.
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. It seems very unfair.
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. I don’t get any more money by handling the lien.
But I am bound by the law to take care of getting liens 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 do.
Is there anything we can do?
Yes. We will do all we can to reduce any lien you have to repay.
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.
However, you need to understand 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. 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.
What do I get out of all this?
To be fair, this process does work for you in one very big 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 or so 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.
Conclusion & Next Steps
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.
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