How Do Liens Affect My Personal Injury Settlement?
What is a lien? A lien is a right given to another in property by its owner to secure a debt. Liens are created voluntarily, or by law in favor of certain creditors. This can sound scary, especially when one thinks about a lien on a house or car.
Liens relating to personal injury claims, however, are standard operating procedure. You no doubt will have incurred medical expenses associated with the treatment of your injuries. If your health insurance, for example, pays any of the medical bills that are related to your personal injury case, the insurance company often will be entitled to be reimbursed for everything that it paid if you receive a settlement or win your case at trial. If Medicare or Medicaid paid your medical bills, you will likewise be obligated to reimburse the government out of the proceeds of your case. In other words, there is a lien that will have to be satisfied if you win or receive a settlement.
How did these lien holders find out about your personal injury case? You probably told your doctors and hospitals about the accident when you first went for treatment and filled out the information forms. The information is passed along to insurers when the claim is submitted by the health care provider. Most (if not all) insurance companies, including Medicare and Medicaid, also require that you report a personal injury claim. If you forget to report a claim, insurance companies have ways of flagging certain treatments that appear to be related to an injury as they show up in your patient history.
So if there is a lien for my medical bills can I just tell my personal injury attorney to ignore it? No. When your personal injury attorney asks your doctors and hospitals for records to provide evidence in your case, payments made by private or government insurance are disclosed in the billings they provide. This serves as notice of the existence of liens to both you and your attorney. That notice creates a legal obligation on both you and your attorney to satisfy any liens as part of the settlement of your case.
Be aware, there is never a guarantee that you will win your case, or that the person who injured you will have enough insurance coverage to pay all of your medical expenses. So if you have health insurance, Medicare, or Medicaid, let them handle your medical bills. They will then have liens that will wait for your case to settle. Good personal injury attorneys always try to get as much money in their clients’ pockets as possible, and using your health insurance and then paying off liens that may have been created is one way to make that happen.
When your attorney reviews your settlement with you, you will be shown the gross amount of the settlement, which is the total money the insurance company has paid to you to settle your case or satisfy the verdict from your trial. Then such items as the attorneys’ fees, unpaid medical bills, and liens need to be deducted. This leaves the net amount, or the amount that is paid to you – your bottom line.
If you or a family member has been injured in an auto accident in Virginia or North Carolina, please contact our personal injury attorneys right away so we can provide you with a free consultation concerning your claim. If you have been injured in any other type of accidental injury case, give us a call; let us help.