What is a Medical Lien on a Personal Injury Case?

Liens are something that most people do not want to hear that they have against them, particularly if they are expecting to receive money through a personal injury lawsuit settlement. Liens can occur anytime another party makes a monetary claim against another person for a debt, and there are times when an injury victim could have a medical lien placed against their personal injury case. Here, we want to discuss how medical liens work and while they are necessary at all.

What is a Settlement Lien?

A lien is defined as a court order placed on somebody’s property satisfy in debt that they owe to another individual or entity. Concerning personal injury case settlements, the “property” that a lien is placed against will be the settlement award granted by a jury or negotiated in a settlement. Any third-party seeking to put a lien against a personal injury settlement has to go through the court system in order for the lien to be valid.

What is a Medical Lien?

Written into the terms of many health insurance policies is the ability of the insurance carriers to place liens against their policyholder if they have to cover the medical bills while waiting for the policyholder to receive compensation from another entity. This type of lien is necessary so that the insurance policyholder can receive compensation for medical care while they await an insurance settlement or compensation through a personal injury lawsuit verdict. We should take a look at how this may apply in a real-world scenario.

Suppose for a moment that Jimmy sustained a back injury in a car accident caused by Bethany. However, what happens if Bethany and her car insurance carrier argue that she did not cause the crash, but that Jimmy did? In this case, it is likely that Jimmy will have to file a personal injury lawsuit against Bethany and her insurance carrier in order to recover compensation for his medical bills and other losses. However, Jimmy needs immediate and ongoing medical treatment, and he cannot wait until the personal injury lawsuit is over with in order to pay for this treatment.

If Jimmy’s personal health insurance carrier covers his medical expenses in the interim, they will likely have full rights to place a medical lien against any personal injury settlement or jury verdict that he receives in his case against Bethany and her insurance carrier. This means that Jimmy’s insurance carrier will cover his treatment, but they do want to get payment. If the insurance carrier pays for $100,000 worth of medical bills, they are going to want as much of that back as possible.

Suppose Jimmy is awarded $300,000 from Bethany after a successful personal injury lawsuit. In this case, because the health insurance carrier placed a lien against the settlement, Jimmy is going to have to pay back some or all of that $100,000 to his health insurance carrier. This will leave Jimmy with the remainder of the settlement, minus any legal fees he paid to his attorney.

Contact an Injury Attorney Today

In addition to medical liens placed by a health insurance carrier, these liens can also be placed by hospitals, doctor’s offices, and any other health care provider that agrees to provide medical treatment while awaiting a settlement. It is crucial for an injury victim to work with a skilled personal injury attorney who can communicate with all parties involved about medical liens and treatment while the case is ongoing.