In general, a lien is a court order or agreement placed on personal property to satisfy debt owed to a third party. As it relates to a personal injury settlement, the personal property is the portion of a settlement award to which the lien holder is claiming a right. In the context of a personal injury claim, liens are often asserted by the injured party’s insurance company for personal injury protection benefits or by a doctor’s office that provided treatment for injuries that are the basis of the personal injury claim.

 

Healthcare Providers. Some of the most common personal injury settlement lien holders are healthcare providers. In many cases, it is not advisable to have a party’s health insurance cover medical bills related to a personal injury claim. Healthcare providers will seek to recover medicals bills with a settlement lien. However, when the injured party has a HMO or no insurance at all, a personal injury attorney can negotiate with the healthcare provider to pay only a portion of the bills.

 

Liens can also be created by prior agreement.  An injured party may sign an agreement with the healthcare provider at the time of receiving care or treatment. This agreement is often signed by the injured party and the personal injury attorney. It is an agreement to pay back the healthcare provider with funds received from the settlement in the case or from the final judgment in court.

 

Medicaid and Medicare. Where Medicaid has paid for medical bills related to a personal injury claim, the claimant is statutorily required to repay Medicaid from the proceeds of the case. It must be clear, however, that Medicaid liens only apply to Medicaid payments related to the injury.

 

The US government has a statutory lien for Medicare payments. Under the Medicare Secondary Payor Act (MSP), Medicare should not pay medical bills when payments are made or expected to be made under workman’s compensation or under other private insurance plans or policies. Where there is a conditional payment, the United States can bring an action against the primary plan responsible for payment of expenses.

 

Automobile Insurance Carriers. Under automobile insurance plans providing personal injury protection coverage in personal injury cases, the insurance company may be entitled to a partial reimbursement from a settlement award for payment of services.

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