In the unfortunate event that you are involved in an accident caused by the negligence of someone else, you will likely be in need of medical care. While this care is necessary, it can be extremely expensive.
Even if you aren’t able to pay for it at the time treatment is needed, doctors must provide you with care. They will then put what's called a lien against your settlement. While insurance can help with the payments, rarely does it cover all of the expenses. If the accident wasn't your fault, your expenses can be covered by your personal injury settlement. An experienced personal injury attorney will be able to negotiate repayment amounts to ensure you keep as much of your settlement money as possible.
How Does a Lien Work
If you have been in an accident that has resulted in property damage or personal injury, at some point you may hear the term "subrogation." This means one person or party stands in the place of another. Subrogation comes into effect when a person has been injured and someone other than the person at fault pays for all or some of the damages resulting from the injury. The most common use of subrogation is by insurance companies, who seek subrogation to recover the money they paid for medical expenses on behalf of the injured person.
You pay monthly premiums to auto insurance and health insurance companies to ensure coverage for medical bills and additional expenses should an accident occur. In the event a claimant receives a third-party settlement or verdict awarded to them, the insurer who paid the victim’s expenses expects to be reimbursed for those costs.
Typically the insurance company of the at-fault driver who caused the injury and/or property damage is expected to cover those damages. If the insurance company has covered damages for its own insured in the accident where the other party was determined to be at fault, they view that as something they should be held responsible for paying. This results in the expectation that a portion of the third-party settlement or verdict being paid to claimant will be used to reimburse the insurance company who ponied up for the expenses in the beginning.
There are several other entities that can issue liens against you during your personal injury claim process.
“After a settlement or verdict is awarded, everybody will want their piece of the pie. That’s when having an experience personal injury attorney can be a real advantage,” Brad Parker says.
Types of Liens
The types of legitimate lien holders in personal injury claims can include:
- Health and auto insurance companies
- Doctors, hospitals, clinics, or other health care providers
- Medicaid and Medicare
- Veterans Administration
- Workers’ compensation insurance
- State child support agencies
Some medical providers will ask you to sign a lien letter stating that you submit to the lien against your personal injury settlement. The cost of your treatment will be deducted from any damages that you receive.
Many states have strict laws that allow delinquent child support, and sometimes delinquent spousal support, to be collected through liens against injury settlements. The Texas Child Support Lien Network encourages insurance companies to search for active child support liens before releasing settlement funds.
What if You Don’t Pay Up
Ignoring medical liens or trying to hide settlement funds is not a good tactic and can result in serious consequences, ranging from added penalties and fees to possible criminal charges.
In some cases, medical providers may be willing to continue your treatment and wait to be paid if you or your injury attorney agree to provide a Letter of Protection (LOP). This is a signed agreement stating you will pay the health care provider after your case settles. “Health care providers can turn them over to a credit agency and even follow suit if they want to go that far, which they seldom do. Avoiding repayment can also affect a client’s credit,” Brad says.
It’s important for clients to understand that they shouldn’t assume that if they haven’t heard from worker’s comp, or your health or auto insurance company that they waived their claim against settlement proceeds. Some states have a statute of limitations on medical liens that can last for years after your settlement.
How an Attorney Can Help
Dealing with lien claims can be a daunting task, but it is an integral part of personal injury claims that should never be an afterthought. The work negotiating lien claims is complicated especially when also working to settle the underlying claim.
A good attorney is experienced in negotiating large medical liens with Medicare, Medicaid, and the VA so that you end up with more money at the end of the day. They will negotiate with these providers both before and after you’ve received damages to minimize your costs, so you don’t experience financial hardship.
If you have been seriously injured as the result of someone else's negligence or stupidity, and are seeking help to negotiate your settlement and repayment amounts, contact our Bedford, Texas office at 817-440-3888 or fill out our contact form.
At Parker Law Firm, our experienced personal injury lawyers believe people matter. We are committed to our clients, not case numbers, and we believe in the power of the civil justice system. With years spent both representing accident victims and participating in the state legislative process, our founder, Brad Parker, has developed a deep understanding of the law and gained unique experience that helps him get results for his clients.