THIS ARTICLE DISCUSSES:
- What Is a Lien?
- Who Can Take a Lien?
- How Is My Case Affected by a Lien?
- How Can Burman Law Help Reduce or Eliminate a Lien?
What is a Lien?
In a personal injury case, a lien is defined as “any official claim or charge against property or funds for payment of a debt or an amount owed for services rendered.” A “lien” is like a debt you owe, but instead of paying the debt with your own money, you pay that debt using your personal injury settlement money.
To help understand, here is a common example. Let’s say a careless semi-truck driver runs into your vehicle, sending you to the hospital. You have no idea who insures the semi-truck driver, so your health insurance pays the hospital bills caused by the truck driver’s negligence. The hospital submits a bill to your health insurance carrier and your health insurance carrier pays it, less any deductible, etc. Now, here is how the lien arises: when your health insurance carrier pays the hospital bill, your health insurance carrier has a legal right to obtain reimbursement for the money it paid to the hospital for your medical bills. This legal right to collect money creates a “lien” in favor of your health insurance carrier. The lien goes against the settlement you eventually receive from the trucking company’s insurance carrier. The dollar amount of this lien is equal to the dollar amount paid by your health insurance carrier on the hospital bills associated with your wreck injuries.
There are other legal terms you may hear when a lien is discussed. “Subrogation” means “stand in the shoes of.” “Reimbursement” means to “collect what has already been paid.” When another party, such as the health insurance carrier in our example, has subrogation or reimbursement rights against your personal injury case, then the health insurance carrier stands in your shoes and holds the right to place a lien against the compensation you receive from your personal injury case. The health insurance carrier holds certain legal rights to reimbursement for what it paid. When the health insurance carrier has a lien, it is commonly called a “lienholder.”
Who Can Take a Lien?
We used health insurance in the above example. A health insurance carrier is probably the most common entity to assert a lien, but there are many other types of liens in a personal injury case. Let’s discuss a few other common types of liens.
One type of lien occurs when there is a Letter of Protection (LOP). Although emergency departments must legally provide you treatment, other non-emergency health care providers may refuse treatment unless you provide an (LOP) from your attorney. An LOP is a signed agreement between you and your health care provider which guarantees payment when your personal injury case is concluded, either by settlement or jury award.
Federal law allows Medicare and Medicaid to place a lien on your settlement. These types of liens are administered by the Centers for Medicare and Medicaid Services (CMS) and under contracts with some private administrators. Federal law gives Medicare and Medicaid liens precedence over any other lien. This means that federal law allows Medicare and Medicaid Services to jump in front of everybody, including the injured party, and get paid before any other lienholder receives payment.
In some states, including Tennessee, a common lien we see is called a “med-pay” lien. It arises when you contracted for medical payment coverage with your automobile insurance carrier and you submitted medical bills to your insurance company for payment. When your automobile insurance carrier pays, it will frequently inform you that it will be asserting a lien against your settlement seeking reimbursement for the bills it paid.
In Tennessee, hospitals can hold a lien under Tennesse law. This type of lien is called a “hospital lien.”
So, you can see that various types of liens can arise under the facts of a particular case and the federal or state law that applies to the lien.
How Is My Personal Injury Case Affected by a Lien?
Let’s recap the types of liens we have discussed:
- Health insurance liens
- LOP liens
- Medicare liens
- Medicaid liens
- Med-Pay liens
- Hospital liens
Liens and lienholders can affect a case in a number of important ways. First, a lien can significantly reduce the amount of compensation available to you for your injuries. Secondly, a lienholder can intervene in a case and create delays and uncertainty when you want to resolve your case. Thirdly, a lien placed on your personal injury settlement can affect your ability to maintain control over the settlement funds. And lastly, in extreme cases, a lien can affect your ability to secure future medical treatment under your health insurance coverage.
How Can Burman Law Help Reduce or Eliminate a Lien
The number one thing we do at Burman Law to help reduce or eliminate a lien, is to start early and be “pro-active” with liens and lienholders. At the beginning of each case, we gather the facts relevant to each lien and lienholder. We establish contacts with decison-makers. We read the contracts that discuss the lien, identifying weaknesses and developing legal strategies to reduce the lien. We communicate with lienholders and take a stand on your behalf.
In every case, we can reduce the lien. In most cases, the reduction is significant. In some cases, we obtain a very substantial reduction or eliminate the lien entirely.
For years, we have studied liens and lienholders. We understand where weaknesses can be found, and where the law is on your side. We keep you informed about any existing liens and make sure you are not surprised at settlement time by suddenly discovering there is a lien.
We also make sure to document the full dollar amount of all your losses in any settlement demand or closing argument. When we resolve your case, we are always careful to take into account liens and lienholders so you are protected from future claims by the lienholder. We are pro-active to ensure your settlement or award is not delayed by “last-minute” snafus.
If you have questions about how liens work in personal injury cases, or any question about your personal injury claim, contact Mike Burman for a free consultation. In addition, Mike Burman never charges to consult with lawyers in other cases about how to reduce or eliminate liens.