What is a Lien on a Personal Injury Case?
Medical bills from a personal injury case can quickly total tens of thousands of dollars. Many accident victims do not have the money to pay medical bills. If they do not have health insurance to cover medical expenses, it can be frightening and overwhelming.
Massachusetts law allows medical providers to place a medical lien on the settlement proceeds for a personal injury claim.
Medical liens can apply in a variety of cases, including cases involving:
- Motor vehicle accidents
- Dog bites
- Construction accidents
- Defective products
- Slip and fall accidents
- And many other cases
It is important to understand how medical liens work and how they can impact the amount of money you might receive from a personal injury settlement.
What is a Medical Lien?
Medical providers, hospitals, health insurance providers, and government agencies use medical liens to recoup the money they paid for your medical care after an accident. You must pay these liens from the settlement proceeds for your accident claim or a judgment in a personal injury case.
Medical liens can significantly reduce the amount of compensation you receive for your injuries, loss of income, physical pain, emotional suffering, and other damages. Sadly, some accident victims could receive very little for their damages after an accident.
What are the Types of Liens on Personal Injury Proceeds in Massachusetts?
There are several different types of liens that could be placed on your personal injury settlement proceeds. Some of the most common types of liens for medical expenses include:
Hospital and Medical Provider Liens
Hospitals and individual medical providers may place liens on your personal injury settlement for unpaid medical bills.
To place a lien on your personal injury settlement, the medical provider must:
- Provide written notice before the parties reach a settlement or compromise, or a jury returns a verdict in a personal injury lawsuit
- The notice must contain the name and address of the injured person, the date of the accident, and other information relevant to the medical services provided
- The name of the person who is allegedly liable for the injuries sustained by the injured person
- If applicable, the name and address of the hospital, health maintenance organization, or dental service corporation
- Send the written notice by certified mail, return receipt requested, to the injured person, the attorney for the injured person, the alleged liable party for the injuries, and the insurance provider for the at-fault party
However, the providers must follow the requirements for notice of lien for a medical lien to be valid. If the medical provider does not provide written notice according to the requirements, the lien may not be valid.
Medicaid and Medicare Liens
If your medical bills from an accident are paid by Medicaid (MassHealth) or Medicare, the agencies have an automatic lien on personal injury proceeds. The agencies are not required to notify you of their line. You have an obligation to notify the agencies if you file a personal injury claim and receive proceeds from the claim.
Health Insurance Liens
Your private health insurance company may pay some of your medical bills after an accident or injury. The health insurance company can place a lien on your personal injury settlement by sending you a Notice of Lien by certified mail.
However, the insurance might still recover money for its lien even if it does not send you a certified letter. There is a clause in most health insurance policies that allow the company to pursue a legal claim against you if it is not paid back for the medical bills it paid. Since an insurance policy is a contract, the terms are enforceable in court.
Negotiating Liens on Personal Injury Settlements
Your personal injury lawyer understands the best way to handle medical liens and health insurance liens on personal injury proceeds. In some cases, the lienholder may be required to reduce their lien by a portion of the attorneys’ fees. Other providers may be willing to negotiate a lower settlement for their lien.
Your lawyer uses the facts of the case and the limited funds available for payment of liens to negotiate payoffs. Your attorney can develop a compelling argument that if all liens are paid in full, you receive very little or nothing for your pain and suffering, which would be an injustice.
Even though the medical providers and insurance companies may not be required to accept a lower payoff for their lien, an experienced attorney can make a difference. Attorneys are trained and skilled negotiators who understand how to craft a convincing argument. Your lawyer also ensures that the liens are valid and legally enforceable before the providers are paid any money for their liens.