What a Medical Lien Is and How It Affects Your Settlement
The number that matters is the one you keep
When people hear a settlement figure, they picture that money arriving in their account. It does not work that way. Before you receive anything, several people with a right to be paid from the settlement have to be paid: the attorney’s fee, the case costs, and the liens.
A lien is a right to be paid out of your recovery. In an injury case, most liens come from the people who paid for or provided your medical care. They are often the single biggest thing standing between the settlement amount and what you actually take home.
Who asserts liens
Hospitals. A hospital that treated you after a crash can, in California, assert a lien against your recovery from the person who caused it.
Your health plan. If your health insurance paid for treatment, the plan may claim the right to be repaid from your settlement. That is called subrogation. How strong that right is depends on the kind of plan. Some employer plans governed by federal law have much stronger repayment rights than an ordinary policy.
Medi-Cal and Medicare. Government programs that paid for your care have to be repaid from the recovery. There are rules for how much, and there are ways to reduce what is owed, but these liens cannot be ignored.
Doctors who treated you on a lien. Some providers will treat you now and wait to be paid from the settlement. That is a medical lien in the narrower sense, often backed by a letter of protection from your lawyer. It is how many people without insurance get the care they need.
Why liens are negotiable
Here is the part most people do not know: the amount a lienholder claims is often not the amount it ends up being paid.
Bills are frequently reduced. A hospital bill may be far higher than what the hospital accepts from insurers. A health plan’s repayment claim may have to be reduced to account for the attorney’s fee that produced the recovery. Some liens turn out not to be enforceable at all, or only in part.
Every dollar taken off a lien goes to you. That is why reducing liens is often worth as much to a client as getting a higher settlement offer, and why it is a real part of the work on a case, not paperwork at the end.
How it works at the end of a case
When a case settles, the money goes into the law firm’s client trust account, not into anyone’s pocket. The liens are identified, negotiated, and resolved. The fee and costs are paid. You receive a written breakdown of every dollar before the balance is paid to you.
What you can do now
- Tell your lawyer about every way your care was paid for: health insurance, Medi-Cal, Medicare, med-pay, out of pocket, or nothing yet
- Keep every bill and every letter from a provider, a plan or a collection agency
- Do not ignore a letter about reimbursement. Send it to your lawyer
- Ask questions about the breakdown. You are entitled to understand every line
Talk to Boyd
If you are worried about what you will actually take home, ask on the first call. The consultation is free, and Boyd takes the call himself: (714) 656-2400.