What is a Lien on a Personal Injury Case?
Bill Allen | April 22, 2022 | Personal Injury Questions
A lien is a legal right acquired by a creditor over an asset. The asset is security for a debt you owe the creditor. For example, in a personal injury case, a lien would be the legal right to receive a specific amount of your personal injury settlement to satisfy a medical debt or subrogation right.
What is a Medical Lien in Ocala, FL?
A medical lien is a court order that requires you to pay the hospital or health insurance company out of the proceeds from your personal injury settlement. The payment is for medical bills they covered related to your accident.
The purpose of the lien is to ensure that you do not benefit from a duplicate payment. In other words, you do not receive the benefit of having your medical bills paid by one party and receive reimbursement for those identical medical bills by another party.
You may also have a medical lien on your personal injury settlement proceeds if you sign a medical lien for a doctor or other health care provider. Some medical providers agree to provide medical care and hold the bills until you receive your personal injury settlement. You sign an agreement allowing your personal injury lawyer to pay the medical bills from your personal injury settlement.
What is a Subrogation Claim in a Personal Injury Case?
Most health insurance policies contain language that gives the health insurance provider the right to reimbursement of the bills it pays related to a personal injury case. When you settle the injury claim, you are required to reimburse the insurance company for these payments. The right to reimbursement is called a subrogation claim.
Private health insurance companies, Medicaid, and Medicare may assert subrogation claims against your personal injury settlement.
Do Medical Providers Receive the Difference Between the Billed Amount and the Amount Insurance Paid?
Health insurance companies negotiate payments with medical providers. For example, your doctor may bill $500 for a procedure. Health Insurance Company A negotiates payment of $350 for that specific procedure. Health Insurance Company B negotiates payment of $300 for the same procedure. The doctor writes off the remaining balance in both cases, so the patient is not billed the difference.
In a personal injury case, the doctor cannot file a medical lien for the difference if your health insurance company paid the agreed amount negotiated with the doctor. Under Florida Statute §641.315, the insurer is responsible for payment of the medical bills instead of the patient when the health insurance company negotiates payment with the doctor.
Can You Negotiate Medical Liens in a Personal Injury Case?
Even though medical providers and insurance companies are not required to negotiate a medical lien, they may choose to do so at their discretion.
A skilled personal injury lawyer negotiates with hospitals, doctors, insurance companies, and other health care providers to decrease the amount owed for medical liens and subrogation claims. Some medical providers may agree to lower the amount of their lien if your attorney can show them you received the maximum amount available for your claim. Still, that amount did not compensate you in full for all damages.
Another option is to challenge the reasonableness of the bill. Medical providers charge what they consider to be reasonable for health care. However, Florida law requires the charges under an open price contract to be reasonable.
Therefore, you may try to show that other medical providers in the area charge much lower fees for the same procedures. If so, you might successfully dispute the reasonableness of the medical fee. Making a counteroffer for a lower amount based on prevailing “reasonable” charges might keep more money in your pocket.
What Happens if I Don’t Pay a Medical Lien for a Personal Injury Claim?
Your personal injury lawyer has a duty to verify and pay medical liens from your personal injury settlement. Personal injury lawyers can aggressively negotiate these liens. They want you to receive as much money as possible for your personal injury case.
However, suppose you settle your claim without a lawyer and do not pay medical liens. In that case, the medical providers and the insurance company could take legal action against you to collect the amounts. If you violate the terms of your health insurance contract, it could impact your health insurance coverage. Therefore, it may be in your best interest to hire a personal injury lawyer to handle your case. An attorney understands the best ways to negotiate medical liens. They fight to keep the amount you must pay from a settlement agreement as low as possible.
Contact Our Ocala Personal Injury Law Firm
We have two convenient locations in North Central Florida: