How Do Medical Liens Work in California Personal Injury Claims?
April 18, 2014
Medical liens on personal injury settlements in California can complicate the final resolution and payment of medical bills related to an accident claim. Depending upon the type of lien asserted and other factors, the injured party may have their award reduced or be stuck holding the bag for the costs of certain services if liens are not fully and properly negotiated and paid.What are the different types of liens that medical providers can assert on a personal injury award?
What is a lien? A lien is basically a claim of right to payment by a medical provider or insurance carrier from proceeds received from a personal injury settlement or judgment. Liens basically come in two forms as follows:
Statutory Liens: These are claims for right of payment that are “presumed” or somewhat “automatic” based upon statutes under the laws of the State of California. They include liens arising from the following:
- Workers Compensation Benefits: When a person is injured while on the job but, in a manner that provides both a claim for work comp benefits and a separate cause of action for personal injuries (for full discussion of these scenarios click here), the workers compensation insurance provider will have a lien on the proceeds of the personal injury claim.
- Hospital Emergency Services: A hospital may claim a right of repayment for “emergency and ongoing” services furnished to a person injured by “an accident, negligent or wrongful act”. California Civil Code §§3045.1 – 3045.6. In order to make this lien enforceable, however, the hospital must provide written notice in a specified manner as set forth in Cal. Civ. Code 3045.3.
- Receipt of Government Benefits: If any of the medical bills were submitted and paid through public assistance benefits such as Medicare or Medi-Cal, an automatic right of repayment is applied to any recovery from a third party on a claim for personal injuries.
Contractual Medical Liens: These are claims for repayment based upon an agreement of the parties or their attorneys. They usually arise in one of three scenarios as follows:
- Health Insurance Payments: Many health insurance providers (including both PPO plans like Blue Cross and Blue Shield and HMO programs like Kaiser Permanente) have a clause in their patient agreement that “requires” repayment for the costs of health insurance benefits paid out to an insured that are later recovered from a third party tortfeasor (or that person’s or business’s auto or liability insurance company).
- Medical Payments From Auto Insurance Carrier Many car insurance policies have an allowance for payment of medical expenses related to an auto accident up to a certain limit amount. If a person uses these benefits and later recovers money from the at fault driver or registered owner, they may be liable to repay some or all of these benefits.
- Agreements to Treat on A Medical Lien: If a person is without health insurance coverage at the time of an accident, they may need to obtain medical treatment including physical therapy, surgeries, prescription medication and other forms of medical therapeutics on a “lien basis”. This means that the doctor or other medical provider agrees to treat the patient and forego payment until the matter is resolved by way of settlement or verdict.
There are many benefits to hiring an attorney to represent a victim of negligence or wrongdoing assert and administer the claims for recovery of compensation. One of these many benefits, is that lawyers who are familiar with personal injury law are adept at establishing the validity of any asserted liens, negotiating reductions of these claims for repayment, and making sure the injured person gets these bills paid and nets the maximum amount after payment. There are many nuances to medical providers asserting a right to recover all or part of what they have billed or paid for medical treatment related to a car accident or other injury causing event. For example, liens for medical payments coverage or for health insurance payments or benefits are usually subject to a “made whole” rule. This means that the injury victim must receive enough to fully compensate them for medical expenses, legal costs (including attorney’s fees) and pain and suffering damages before the insurance company can assert a claim. In addition, every lien is negotiable. A good lawyer is skilled at negotiating reductions (and sometimes outright waivers) of these claims so that the client can net as much as possible. Oftentimes, the hiring of an experienced personal injury attorney can mean the difference between getting all the bills paid and money in your pocket or being left with medical expenses and being thrown into collections.
Steven M. Sweat, APC
Personal Injury Law firm servicing all of California including Los Angeles.
5757 Wilshire Blvd., Suite 450
Los Angeles, CA