Is This Lien Valid?
Over the past few years, personal injury attorneys around the country have witnessed an alarming trend–various liens being recorded against their clients’ personal injury settlements.
A person who has been injured in an auto accident or other negligence will have a claim against the person who caused his or her injury. That is called a third-party claim. Increasingly, medical-related liens are being filed against third-party settlements.
The following are examples of potential liens on injury settlements:
Balance Billing. These are liens filed by a hospital for the difference between the discounted amount paid by the patient’s medical insurance plan and the total amount of the bill. Traditionally, hospitals would write off the balance after the patient’s medical insurance paid the hospital bill. Arizona state law now allows hospitals to assert a lien against an injured person’s third-party settlement for the balance of his/her hospital bill.
Health Insurance Subrogation. This type of lien comes in many forms. Depending on the employer from which the medical insurance plan is provided, the plan might have rights to assert a lien against an injured person’s third-party settlement or even against their uninsured, underinsured or medical payments coverage for the medical expenses paid on his/her behalf. Examples of valid liens are ERISA plans, which are “employer-funded” or “self-funded” health insurance plans; government employees’ medical insurance plans; Worker’s Comp; and other health insurance plans.
Entitlement Health Plans. Medical insurance plans provided under AHCCCS, Medicare, Medicaid, etc., have a statutory lien against third-party claims. However, Medicare is now enacting changes that will allow them, under certain conditions, to attach to settlement monies permanently.
Client’s Auto Insurance. Auto insurance plans that provide Medical Payments coverage on a personal injury claim may be entitled to reimbursement from a third-party settlement for any amount paid over $5,000.
Consensual. If the injured person does not have health insurance a medical provider may accept a lien for services provided. This is known as a consensual lien. This lien will be satisfied when the third-party claim is settled.
This information is provided by Hollingsworth Kelly to help you select the right coverage for your auto insurance needs. All too often, we see people who are injured by someone who does not have adequate insurance coverage. All insurance decisions should be discussed with your auto insurance agent so that you can make an informed decision to best suit your needs. This information is not intended to serve as legal advice.