Reaching a successful settlement or verdict in a personal injury case can be a relief after a long and challenging journey. However, it’s important to be aware that the final amount you receive may be impacted if a medical provider or insurance carrier asserts liens on your proceeds.
Liens can significantly reduce your net recovery, making it crucial to hire a personal injury attorney who is well-versed in the rules and regulations surrounding liens. With their expertise, you can navigate the process, assess the validity of liens, negotiate reductions or waivers, and fight for maximum compensation. It’s essential to resolve any liens before receiving funds from your settlement or judgment.
Types of Liens in Personal Injury Cases
There are two main types of liens that can be asserted on a personal injury award: contractual and statutory liens. Contractual liens arise from agreements between the injured party and medical providers, health insurance companies, or Med-Pay insurance providers. Statutory liens, on the other hand, are presumed by law and can be asserted by workers’ compensation insurance providers, hospital emergency services, and government programs like Medicare, Medi-Cal, and Medicaid.
Reimbursement to Health Insurance Companies That Asserted Liens
If your injuries were caused by a third party, your health insurance company may have a claim for reimbursement based on the contractual language of your policy. Many health insurance policies, including HMOs and PPOs, include provisions for a lien against the proceeds obtained by the insured from a third party. Whether you have to reimburse your health insurance company depends on the specific terms of your policy.
Reducing Health Insurance Liens
In many cases, a skilled personal injury attorney can help reduce your health insurance lien. Reductions are possible if:
1. The lien exceeds the amount paid for non-capitated services.
If your medical provider billed you for each service rendered rather than a flat fee, the health insurance lien cannot exceed the amount actually paid for non-capitated services.
2. The lien exceeds the statutory cap on capitated services.
For capitated services (flat fee), the health insurance lien cannot exceed 80 percent of the customary and usual cost of the same non-capitated services in the same region. The gross capitated lien claim would be reduced by 20 percent. However, if non-capitated services were also provided, the 20-percent reduction would not apply to those services.
3. The lien includes co-pays.
Co-pays should not be included in the lien.
4. You were deemed partially at fault.
If you share fault for the accident, the lien must be reduced by the percentage of fault attributed to you.
5. The lien doesn’t account for legal expenses.
The lien claimant must contribute to the cost of reasonable attorneys’ fees and legal expenses.
6. The lien claim is more than the lien recovery cap.
If you have legal representation, the health insurance lien cannot exceed one-third of the amount owed to you. If you don’t have an attorney, the lien cannot exceed half of the amount owed.
7. You were not “made whole” by the payout.
If the third party’s insurance policy is insufficient to fully compensate you for your injuries and suffering, your health insurance company’s subrogation rights may be limited.
Medicare and Medicaid Liens
When medical bills are paid by Medicare or Medicaid, statutory liens can be asserted when the injured party recovers from a third party. Medicare reduces the lien based on pro-rata calculations that consider attorneys’ fees and other costs, with attorneys’ fees not exceeding 40 percent of the total recovery. Medicaid, or Medi-Cal in California, follows specific rules and limits on lien recovery. The Medi-Cal claim for reimbursement must be reduced by 25 percent to account for attorneys’ fees and legal costs, and there’s also a “50% Rule” to prevent excessive recovery.
Call (562) 206-1939 to Speak with a Personal Injury Attorney in Long Beach
Your Injuries Are Personal to Me
If your personal injury claim will likely include liens, turn to the Law Office of Michael D. Waks. Attorney Waks has more than 30 years of experience in lien negotiations. Call (562) 206-1939 or fill out the Contact Form on our website to schedule a free initial consultation with a personal injury lawyer in Long Beach.