In the most basic of terms, a lien is a demand for repayment. When an auto accident occurs, the parties involved will need to seek medical attention. In some cases, third-parties may help front the costs of medical treatment. These parties may include: private health insurance companies, auto insurance companies, certain medical providers, and/or government insurance programs. A lien protects you and your medical providers; it guarantees your medical providers pay for their services after your case settles; while providing you with the treatment you need without having to pay upfront.
Who Can File a Lien?
There are several parties that can file a lien on your settlement after an auto accident. In short, any party who helps pay for a portion of your medical treatment can place a lien on it. For instance, your health insurance company might place a lien against your settlement to reclaim whatever they paid toward your recovery.
However, some states place limitations on when, and if, a health insurance company can place a lien on your settlement. Typically, your health insurance must have a clause stating their intention to place a lien on your settlement within your policy. Without such a clause, they cannot place a lien against your settlement. Some states do not allow health insurance companies to seek compensation from their insured after an accident occurs at all.
Your medical provider can enter into a lien agreement with you so that you can continue your treatment and they will receive payment after your case settles. Other parties that can enter into a lien agreement with you include government insurance agencies (like Medicare), and your auto insurance company.
What is a Medical Lien?
The most common type of lien is a medical lien. This type of lien provides coverage to an injured party who does not have adequate health insurance coverage. The law requires hospitals to treat patients in emergency situations regardless of their ability to pay for these services. For this reason, liens are protected by state and federal laws. They ensure medical providers are able to stay in business and continue to provide these valuable emergency services.
However, most medical providers hesitate to enter into lien agreements as it can pose a great risk to their business. When a medical provider works on the basis of a lien, there is a chance they will not be repaid. For example, if your case doesn’t settle, you don’t win a damages award, or your damages award isn’t sufficient to cover the total cost of your medical lien(s), your medical provider(s) may go unpaid.
How do Medical Liens Work?
If your medical provider files a lien, you must sign a wavier signifying your acceptance of it. However, for the lien to be valid, it must contain specific information and adhere to a certain time limit, otherwise, the lien will be considered null. This doesn’t mean you will not have to repay them, it simply means your medical provider will have less legal opportunity to pursue you for these funds. You will still be liable for the cost of their services.
A valid lien must:
- Be submitted to the county recorders office within 180 days of your initial treatment
- Contain your contact information and the dates you received treatment from the specific provider
How an Attorney Can Help
An attorney can help you initiate lien agreements with your medical providers. They can also help you find providers that will be willing to work on a deferred payment basis. However, if your medical provider will not work on a lien, your attorney can also help you work out a timely payment plan, that is fair to both you and your medical provider(s).
Once your case has settled your attorney can help you negotiate reductions in your medical lien(s), allowing you to keep more of your settlement. This negotiation can take place on the basis that: repaying your lien(s) in full would cause significant financial hardship; you need future medical treatment not covered by your health insurance; the accident caused you to sustain a permanent disability; you lost your job due to the accident/your injuries; etc. An attorney will do all that they can to reduce your financial stress, and make this process as easy for you as possible.
Were you or someone you know involved in a recent auto accident? Call Auto Accident Care Network now at 801-683-1948 to be connected with a live care advocate. Our team at AACN can connect you to trusted attorneys and doctors to schedule a free legal consultation, a free thirty-minute massage, and a no-cost medical exam!
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