What Is a Medical Lien on a Personal Injury Case?

January 20, 2021

One of the many new terms you may encounter during a personal injury case in Arizona is a medical lien. A medical lien is a claim that another party has to a portion of your settlement or jury verdict. It specifically describes a claim a medical provider, hospital or health insurance company has for paying for your medical care. If you find out someone has placed a medical lien against your settlement, learn what to expect from the ensuing legal process.

What Is a Medical Lien?

A lien is a legal claim to someone else’s property. A bill collector may place a lien on a home, for example, if the homeowner is in arrears on his or her mortgage payments. If the homeowner fails to pay off his or her debts, the lien will give the bill collector the right to seize the house and sell it to pay off what the homeowner owes.

A medical lien is common in personal injury law. This type of lien is specifically used to recover the money spent on a patient’s medical care after an accident or emergency. The most common parties that file medical liens are medical providers, hospitals and health insurance companies. These are the entities that often end up paying for a victim’s injuries immediately after an accident, whether or not they are responsible for doing so.

How Do Medical Liens Work?

The purpose of a medical lien is to reimburse the filing party – the lienholder – for what it spent on your medical care when it was not liable for the accident. If a provider believes it should not be responsible for paying medical costs due to a third party’s liability, it will send you a notice of its intent to file a medical lien. A medical provider or hospital must file a lien within 180 days of your release from its care.

Once the lien has been filed, the lienholder will begin a process known as insurance subrogation. Insurance subrogation refers to one party standing in the shoes of another during an injury claim. In a case involving a medical lien, an insurance company may use subrogation to go up against the at-fault party in pursuit of reimbursement for medical bills paid. In essence, it stands in the place of the injured victim during a claim for medical costs.

In other cases, the hospital or health care provider may place a medical lien directly against the patient. If this happens to you, you will be personally responsible for paying back what is owed. You can do this out of pocket with a payment plan if you were liable for the accident or injury, or by giving part of your settlement to the medical provider after winning a personal injury claim against another party.

How Can a Medical Lien Affect Your Personal Injury Case?

A medical lien placed against your settlement or judgment award gives the party that filed the lien the right to subtract what you owe from any award won during a personal injury claim in Arizona. If you win compensation from the defendant, part of it will automatically go to the lienholder to satisfy the lien. It may be possible, however, to negotiate with the lienholder for less than the full value of what you owe.

A personal injury lawyer in Phoenix can help you discuss the terms of a medical lien with an insurance company or health care provider. If the lienholder requires reimbursement from you, your lawyer can help you understand your rights and options based on the language of the insurance policy or Arizona’s laws.

Although a medical lien is a complicated matter that could impact your injury settlement, it can be easier to understand and navigate with help from an attorney. A lawyer can help you protect your rights and get the money you need to finally move forward, even with a medical lien.