Personal injury claims are full of complex legal and procedural issues. When your case is managed properly by a Nevada personal injury attorney the mazes of law and process are more easily navigated. Because lawsuits can take many months, or even years, to settle or try in court, the financial burden of expenses as well as medical bills never seems to stop piling up. There are mechanisms in place that may give a claimant temporary relief while they are under medical treatment and throughout the claims process. The main tool of temporary relief is a lien.
What is a Settlement Lien?
In general legalese, a lien is an agreement, or even a court order, placed on one’s personal property (assets) to satisfy debts. In the context of a personal injury settlement, the personal property is the settlement, or court awarded proceeds. Many times, liens are filed by a third party to protect a loan or cover a medical procedure that appertains to the accident in the result of a settlement. In personal injury claims context, liens may be filed by any entity that paid any of the injured party’s bills, medical or otherwise.
Who May Have a Lien on Personal Injury Settlements?
Medical Providers. The most common lien holder in personal injury settlements are healthcare providers. In some cases, the injured person might not have any medical coverage to help with the medical bill expenses. Also, the injured party’s medical bills may only be partially covered by an insurance policy. Medical providers can seek to recover all medicals bills related to the accident in which a settlement or court award might be forthcoming by filing a lien. However, since settlement offers may sometimes not be enough to cover the extent of the medical bills along with attorney’s fees and other expenses, in these cases it is necessary to negotiate with all the interested parties to the claim. These negotiations are best held by the personal injury attorney.
Other Parties. Liens can also be created by prior agreement between the claimant and another party. The injured party might be asked to sign an agreement– a Letter of Protection or a “consensual lien” in some states–with the medical provider in order to receive care when there is no insurance policy in place to cover the expenses at the time of treatment. This protection letter or agreement is often signed by the injured party and their personal injury attorney. The agreement states in fine that the health care expenses will be reimbursed at the time the funds are received in either settlement negotiations or court award. It is important to understand what is being promised in these agreements and it is recommended that your personal injury attorney be the one to draft such agreements.
Automobile Insurance Carriers. Under most automobile insurance policies, an insurer providing medical payments in personal injury claims may be entitled to reimbursement from any settlement or jury award. States that have PIP coverage, or Personal Injury Protection, also known as “No-Fault” insurance, generally do not allow for subrogation rights when PIP has made medical payments as a result of a car accident. It is important that your personal injury attorney be made aware of all policies that might be used to cover an injured person’s medical expenses prior to their payment.
Health Insurance Carriers. Personal injury award liens may be written into the health insurance policy of many carriers. These policies create rights on the injured party’s settlement money to be repaid to the insurance carrier who paid the bills as a result of an accident or injury even. These types of liens are a result of the legal term, subrogation. They are valid and usually a part of every medical plan available today. Subrogation liens are in most policies including government employee insurance plans, ERISA plans, and workman’s compensation policies. It is important that your personal injury attorney be made aware of any and all policy provisions so that they might better evaluate the health insurer’s rights of subrogation against any of your claims.
Medicaid and Medicare. Under Medicaid, the applicant is required to assign their rights to payments for medical treatment directly to the government bureaucracy. An individual who is on Medicaid does not even need to pursue a claim for reimbursement .The government has hundreds of workers trained to seek out these payments and file whatever legal documents are necessary to protect their rights of subrogation. In a personal injury settlement in which Medicaid has paid for some or all of the medical bills, the government is statutorily required to be paid from the settlement proceeds, and they can and usually will impose a lien on any settlement monies. However, Medicaid liens only apply to injuries sustained in the accident and to Medicaid payments related to the personal injury of the claimant. The Medicare Secondary Payer Act (MSP), also allows for the federal government to file a lien on a claim when Medicare is used, much like Medicaid. It is best to avoid payments for an accident by your medical providers with these policies “of last resort”, as the involvement of the government in your settlement negotiations will do nothing but delay and complicate the settlement process.
Liens can be your friend or your enemy… Use them wisely!
As a tool to assist in your ability to heal, a lien can provide temporary relief from some of the financial stresses of being involved in an event that causes injury. It is important to understand the consequences of signing any lien on a personal injury claim. DO NOT SIGN without first consulting a personal injury attorney. They might have a better solution to the financial mess accidents leave people in. Use a lien when necessary, but understand the legal obligation it brings with it. The attorneys at Bighorn Law understand the issues involved in personal injury suits and liens. Call us today.