What is a Medical Lien?

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medical lien

Personal injury cases are always complicated because there is a fine balance that has to be maintained between making the responsible party pay for the damage they have done while avoiding a situation where the injured party receives an egregious amount of money. This is particularly important if an extensive amount of medical treatment was necessary on the part of the injured party, and they had health insurance that covered the cost of their care.

Shouldn’t the person responsible for the damage be made to pay for it? Yes, but the injured person had medical insurance and they didn’t have to pay out of pocket for their treatment, why should they receive that money when it was not a cost they had to bear? Can’t the plaintiff sue the party who injured them for those amounts anyway?

Medical billing is a minefield of questions. How much was the cost of care? Was the cost of care reasonable? Do the treatments the patient received line up with what is reasonably considered standard treatment for the injuries they received?

In this article, we will discuss in detail the responsibility of repayment for medical services after an accident, also called “medical liens.”  We will also cover how medical liens can impact the settlement payout in a personal injury case.  If you have more questions after reviewing this article, then contact the professionals at Medical Billing Analysts.  

How Do Medical Liens Work?

A medical lien is any demand for repayment for medical services that can be placed against the settlement money paid out in a personal injury case. For example, if someone is injured in a car accident and their medical insurance pays for the cost of all of their treatment after deductibles, the health insurance company can put a lien against the settlement.

The argument is that even though the individual was injured, the health insurance company paid for part of the medical care. Therefore, instead of the individual receiving the amount of money covering the cost of the treatment, it would go to the insurance company instead.

When a health insurance company issues a lien to cover the amount they paid for the medical billing in your recovery, you or your attorney may have to go through a process called “subrogation” in order to pay it back.

The length and complexity of subrogation claims varies from state to state and depend heavily on how your health insurance policy is worded.  So, if this is a situation you find yourself in, make sure you talk to your lawyer so you know what to expect.

Can You Sue For Medical Bills Paid By Insurance?

The short answer is yes. However, it is a little more complicated than just saying that you can sue the responsible party for the cost of your medical treatment.

This is a situation where it is helpful to have a medical billing professional review the bills and the cost of your treatment to determine what the value of your treatment was. Regardless, the fact of the matter is that you are unlikely to be directly paid for the cost of your medical care because the insurance company is the party that ultimately spent the money for it.

Types of Liens

There are a few different kinds of medical liens that you might commonly see in your personal injury case.  They can depend on the state you live in as well.

1. Hospital Liens

In some states, the hospital that provided your medical treatment following an accident has the right to file a lien for repayment of any expenses related to your care. 

Some medical providers, when you receive treatment, ask you to sign a lien letter. The letter essentially states that you submit to a lien against any future personal injury settlement, and to be considered valid must generally adhere to a strict set of statutes.

2. Government Liens

This includes Medicare, Medicaid, Veteran’s Benefits, etc. If the government paid for your healthcare in any capacity after you suffered an accident, they have the right to recover that money if you are involved in personal injury litigation.

Liens and Attorneys

Talk to your attorney about the possibility of a medical lienholder accepting less than the amount they paid for your care while still releasing you from the lien (the responsibility to pay them back).

This is particularly important because your attorney will also take a portion of the settlement for their fee. 

For example, if you agreed to pay your lawyer a third of your settlement, you could still owe a quarter of the total settlement in medical liens, leaving you with less than half of the settlement amount in your pocket. Medical billing is a key part of understanding what kind of lien you are looking at when handling your personal injury settlement.

Why You Need Medical Billing Analysts

Medical liens can complicate an already complicated process.  Accordingly, it is highly recommended to hire a medical billing and reimbursement expert to determine and testify to the reasonable value of medical service. The provider’s location can affect these costs and reimbursements.

Whether you are a plaintiff or a defendant in a case, one of the most important items in Automobile, Personal Injury, and Medical Malpractice cases is the cost of medical bills. Figuring out medical costs can be complicated, and expert guidance is critical to ensuring you have a clear understanding of what is “fair and reasonable” with regards to the finances involved in your medical care.

Medical Billing Analysts offers litigation support services nationwide, with offices in New York, New Jersey, Connecticut, Pennsylvania, Georgia, Florida, Texas, Nevada & California. Medical Billing Analysts represent both defendants and plaintiffs with regard to improper medical billing and coding.

The team of MBA professionals will review the hospital, medical and therapy bills to determine the value of past medical expenses, and based on local CPT codes they can also perform a Cost Projection Analysis of future costs. Through meticulous analysis, we can justify the reasonable cost of services which assists in resolving the case.

Contact Medical Billing Analysts by phone or email at 800-292-1919 or intake@medicalbillinganalysts.com. We’re here for you, whether you need an evaluation of a single charge or a complex injury case.