What Is a Lien and How Does It Impact My Settlement?
Liens are commonly the most confusing and frustrating aspect of a personal injury or product liability settlement. If a third party such as a health insurance company paid for medical treatment related to a client’s injury, the health insurance contract or the law typically allows a lien on the personal injury settlement.
How Can Liens Impact My Personal Injury Settlement?
In regard to personal injury or product liability settlements, a lien is a debt owed from the settlement. The most common lien deducted from a personal injury settlement is to the client’s health insurance provider. Most health insurance contracts stipulate that the insurer has a right to reimbursement if a client receives compensation for an injury that the insurer paid for treatment on. Lawyers must honor these liens but can take action to reduce them for you.
For example, if a client is injured in an auto accident and had their health insurance company pay for the treatment of any related injuries, then the insurance company has a legal right to recover the money paid for that treatment from any personal injury settlement related to the auto accident.
But I Paid My Premium and Deductible for My Health Insurance. Why Is There a Lien?
This is a common question asked when a lien is asserted by a health insurance company. A premium is the monthly cost of health insurance coverage. It is the cost of the product and cannot be used to reduce any lien amount. The deductible is the amount you must pay out of pocket before your health insurance provider will cover most eligible expenses. A health insurance company cannot assert a lien for any amount a patient paid out of pocket prior to satisfying a deductible.
Once you satisfy your deductible, your health insurance provider will begin to cover a percentage of expenses as defined under your plan. A lien will arise when an insurance company begins to cover expenses after a patient satisfies their deductible or pays for any treatment or prescriptions covered under a plan prior to the satisfaction of a deductible.
A lien can only be asserted on expenses directly paid by a health insurance provider to cover treatment for injuries that a client is compensated for in a personal injury settlement. If your personal injury case is not successful, you owe nothing to your insurance company beyond your regular premium and deductible expenses.
Other Common Liens Deducted from Settlements
Liens can also be asserted by government-based benefit providers such as the VA, Medicare, and Medicaid. Government liens can be the most time-consuming liens to resolve at settlement. It is very important to inform your attorney of any government-based health insurance used to cover the treatment of your injuries.
If a client does not have health insurance, a healthcare provider will often require a lien agreement prior to providing treatment to guarantee payment for their services. When this occurs, the healthcare provider will often assert a lien on a personal injury case to ensure reimbursement once the case is resolved.
Another common lien deducted from personal injury settlements is to a workers’ compensation insurance company. If a client is not able to work due to injuries related to a personal injury case, any benefits paid to the client under a workers’ compensation plan are subject to reimbursement from a personal injury settlement.
What If I Don’t Want My Attorney to Withhold Any Liens?
Unfortunately, your attorney does not have a choice. The law requires your attorney to honor these liens. If they are not paid, both you and your attorney could ultimately be held financially responsible. A failure to pay Medicare liens could result in penalties and interest on top of the amount owed. For a health care lien, your insurance company could refuse to pay future bills for you if it is not satisfied.
Why Does It Take So Long to Negotiate These Liens?
The insurance companies and the government most often refuse to negotiate until a case is settled. They want to know the amount of the settlement to understand their position. Sadly, there is no time schedule or penalties for an insurance company to respond to a lien. Many do not make it a priority and sometimes the bills paid must be retrieved from years past. Governmental liens such as Medicare and VA benefits are notoriously slow at responding. COVID-19 has made this process even slower. It can take many months and sometimes up to a year to negotiate a lien because of the lack of response. Unfortunately, there is often nothing an attorney can do to speed up this process except to be persistent. And even that does not always work.
Can Lien Deductions Be Reduced?
There is never a guarantee that a lien asserted on an injury settlement can be reduced. However, the Minnesota Personal and Product Liability Injury Attorneys at GoldenbergLaw have over 35 years of experience successfully negotiating the most complicated of settlement liens. We are guided by our experience and expertise and will fight for you to receive as much of your personal injury settlement as possible. We understand the complexities of lien negotiations and will do everything possible to reduce them.
How GoldenbergLaw Can Help
Lien negotiation can be a difficult, frustrating and time-consuming process. The team of Minneapolis Personal Injury and Product Liability Lawyers at GoldenbergLaw practice nationwide to help our clients. We have the experience necessary not just to obtain a just result in your settlement but also to negotiate complex liens and we will fight to obtain the best outcome possible. Let us provide the Gold Standard Advocacy you deserve. Contact us today for a free consultation and leave the sleepless nights to us.