People who've been injured in auto collisions are often surprised to learn that in certain situations, their PIP insurance carrier, the government, and medical providers can assert a claim against their personal injury settlement. When you have been the victim of a collision and have filed a personal injury claim to recover the cost of medical bills, the people who paid for these medical costs may be able to file a lien against your settlement proceeds. A lien is a demand for repayment that may be placed against your personal injury case.
Your health insurance provider may also issue a lien to recover any money it spends on your personal injury accident treatment. You may be required to pay back these medical expenses. This is a process known as "subrogation," whereby insurance providers can seek repayment from your settlement. The extent and strength of the subrogation claim depends upon the language used in the insurance policy.
In certain states, medical providers are entitled to file a lien for repayment of any monies spent on treating or caring for someone injured in an accident. Some medical providers may ask you to sign a lien letter, stating that you submit to a lien against your settlement to pay for services. Medical provider liens must follow a strict procedure in order to be valid.
If you are injured in a work-related incident, a worker's compensation or L&I lien may be issued if your medical bills or lost wages have been paid through your state's workers' comp fund. Worker's comp laws vary significantly between states; therefore it's important to check if the carrier can assert a workers comp lien on your personal injury settlement.
The general rule is that if the government paid for any portion of your medical care, they have a right to get paid back if you later recover money for your injuries from another party. Depending on the specific type of government program, some government agencies, (Medicare and Medicaid Liens, Veteran's Administration) have different rights when it comes to placing a lien against your settlement. Some have the right to recover a portion of the proceeds from your personal injury lawsuit.
It's entirely possible to get the lien holder to accept less than the amount they paid. Your lawyer may be able to negotiate the claim down. Under the "common fund doctrine," lawyers who create a "common fund" for the benefit of a third-party are entitled for reimbursement from the fund in the form of attorney's fees. Worker's compensation carriers are aware that a lien may be so large that is creates a disincentive to litigate. If the lien exceeds the total amount a plaintiff is likely to receive from a lawsuit, the plaintiff may choose not to sue. The plaintiff's lawyer can negotiate with the carrier in order to resolve the lien for substantially less that the face value of their claim.
If an entity requests reimbursement, it's important to ascertain what language in the insurance policy or statute or rule gives them the right to demand this. Lien law is extremely complicated and an experienced lawyer may find ways to reduce or even eliminate the lien. If you've been injured in an auto collision or other incident, give us a call at 253.858.5434 to set up an appointment for a free initial consultation.