What You Should Know About Medical Liens in Personal Injury Settlements
Posted on: April 12, 2023
All personal injury settlements in New Jersey are subject to medical liens. Healthcare providers, hospitals, and insurance companies can all assert claims for a lien against your personal injury settlement for repayment of medical care costs. It is essential that accident victims retain an experienced New Jersey personal injury lawyer to help ensure any medical liens are fair, related to your injuries, and finalized.
What is a Medical Lien?
When accident victims are unable to pay for the costs of their medical treatment, healthcare providers may choose to provide that care in exchange for a medical lien. A medical lien, also referred to as a hospital lien, is a legally binding agreement between a patient and their healthcare provider. In other words, healthcare providers and hospitals provide medical treatment on credit with medical liens.
Medical liens allow medical and insurance providers to recover any medical costs they incurred during your treatment. By exercising a medical lien, healthcare providers are guaranteed payment from a personal injury settlement or verdict. If medical liens are not settled properly, these medical bills can show up on an accident victim’s credit report and potentially affect their credit score.
What If I Have Health Insurance, Medicaid, or Medicare?
Generally, car accident victims who have private health insurance or insurance through Medicaid or Medicare do not need to use medical liens to pay for their treatment. Health insurance companies will cover the costs of a patient’s medical bills. However, that does not mean a victim’s personal injury settlement is safe from any other deductions.
In cases when a car accident victim has health insurance, their insurer will recoup its losses through subrogation. Subrogation is the legal process involved when an insurance company recovers what it paid for the plaintiff’s medical treatment from the defendant. New Jersey statues and case law prevent an insurer to demand reimbursement if a patient’s health coverage is true insurance. Auto insurance companies can also recover subrogation from parties who benefited from their medical coverage.
The type of medical lien that can be filed against a personal injury settlement in New Jersey largely depends on the nature of medical treatment the patient received. Medical liens that are allowed in New Jersey include medical provider and hospital liens, health care insurance liens, Medicare liens, and Medicaid liens.
How Much Can A Medical Lien Take From a Personal Injury Settlement?
Healthcare providers are entitled to the full amount of a medical lien because the lien is a legally binding contract. If the personal injury settlement is less than the medical lien amount, then the healthcare provider can pursue the remainder due from the patient.
Example: You had to spend $40,000 for medical treatment after a car accident and your health insurer covered $20,000 of those costs. If you sue the at-fault driver and obtain a settlement for $60,000, your health insurer can recover the $20,000 it paid out for your medical treatment.
Insured accident victims have their medical bills covered by their insurance providers. Insurers can then pursue subrogation against the defendant in the lawsuit to recoup the amount it paid for the accident victim. While many states limit the amount an insurer can recoup through subrogation, there are no limitations for hospital liens.
Are Medical Liens Negotiable in New Jersey?
Medical liens are negotiable both before and after the lien agreement is signed. Before signing, medical liens can be negotiated as with any other contract. However, it is important to note that many healthcare providers are wary of changing the terms of their lien offers. A skilled personal lawyer in New Jersey can help injured victims find a healthcare provider who offers reasonable terms for the medical lien.
After the lien agreement is signed, it can still be negotiated and altered provided that both parties agree. If a victim receives a significant amount of medical treatment but then loses their personal injury claim, they can negotiate with the lienholder to reduce the amount owed or work out a payment plan with the help of a knowledgeable personal injury lawyer.
Most healthcare providers would rather negotiate these types of liens than take a patient to court or collections. Accident victims should always work with an experienced attorney to help negotiate medical bills and liens after a personal injury settlement.
How Should I Handle a Medical Lien?
Sometimes the amount of a medical lien or hospital lien is so large that it surpasses the patient’s personal injury settlement award. These types of circumstances can leave accident victims with nothing left other than debt. Fortunately, a skilled attorney can help get a medical lien reduced or withdrawn entirely. A New Jersey personal injury lawyer can negotiate with healthcare providers on your behalf and help prove these providers are not liable for reimbursement.
It is crucial that injury victims retain a reputable law firm with a history of handling medical liens and personal injury settlements. Medical lien law is complicated and requires the specific knowledge of a personal injury lawyer. A number of different providers can pile liens on a personal injury settlement, leaving victims and their families with nothing. If you are facing a medical lien claim against your personal injury settlement, a New Jersey personal injury lawyer will protect your rights and best interests.
New Jersey Personal Injury Lawyers at Ellis Law Provide Top Quality Legal Guidance in Medical Lien Law
Our New Jersey personal injury lawyers at Ellis Law have decades of experience protecting the rights and best interests of injured victims and their families. We will handle all aspects of your personal injury lawsuit from start to finish. If you or someone you love needs skilled legal guidance with any type of personal injury matter, you can count on our dedicated legal team to help.
To schedule a free initial consultation, call us at 732-308-0200 or fill out our online form. Conveniently located in Freehold, New Jersey, we proudly serve clients in Freehold, Asbury Park, East Brunswick, Toms River, Middletown, Jersey City, Long Branch, Neptune, Hudson County, Union County, Essex County, Monmouth County, Marlboro, and Ocean County, as well as Brooklyn and New York City.