What’s a Medical Lien, and How Do They Work?

Your personal injury case might involve a medical lien if you do not pay your health care expenses upfront. A medical lien is a health care insurance company’s way of protecting itself from liability for expenses it put up on a policyholder’s behalf. If you discover a medical lien against you, you might owe thousands of dollars to the health insurance company out of your settlement or out of pocket. Work with a personal injury lawyer to help you navigate a medical lien.

What Is a Medical Lien?

A lien is a legal entitlement to someone’s property if that person does not fulfill his or her financial obligations. A corporation such as an insurance company or creditor might place a lien against a client whose payments are in arrears. If the debtor does not satisfy his or her underlying financial obligation, the lienholder may be able to seize the asset involved. This could be a home, vehicle, or (in a personal injury case) a settlement or verdict award.

A medical lien specifically involves debts to a health insurance company, hospital or practitioner for fronting the costs of a patient’s health care. If you were in an accident and needed emergency medical treatment, your health insurance company might have fronted the costs of your care. If someone else caused your accident, Texas laws then allow the insurance company to subrogate medical costs from the party at fault by placing a lien on your settlement.

If you caused the accident but do not have insurance (or enough insurance) and a doctor or hospital fronted the costs of your health care, you may face a medical lien against you personally. A health care provider or insurance company could place a lien against you for the money you owe for medical care. Whether you are facing a lien in subrogation or one against you personally, find out how to clear the debt with a lawyer’s assistance.

How to Navigate a Medical Lien

If you discover an entity has a medical lien against you for thousands of dollars, do not panic. Consult with a personal injury attorney about how to resolve the issue. If you did not cause the accident, the insurance company, hospital or agency with the lien may take the money owed directly from a settlement or jury verdict obtained in a personal injury claim to satisfy the lien. Upon winning your injury case, your lawyer will deduct his or her attorney’s fees from your settlement or verdict. Then, part of the money awarded will go toward satisfying the lienholder’s subrogation right.

Subrogation rights prevent an injured person from double-dipping: profiting from receiving free medical care as well as medical expenses paid via a settlement or judgment award. Subrogation allows a health insurance company or another party that fronted the costs of the victim’s medical care to receive repayment for that care through a compensatory award from the at-fault party. If you caused the accident, however, you may have to pay off a medical lien out of your own pocket rather than through a settlement.

Do not ignore a medical lien if you have to pay out of pocket. This could only make things worse by penalizing you with additional fines, fees and interest. You could even face criminal charges. Instead, work with a lawyer to find out which parties have medical liens against you and the total value of those liens. An attorney may be able to negotiate lower lien values on your behalf by searching for mistakes or discrepancies in billing. Your lawyer may also be able to negotiate a medical lien down by claiming financial hardship. You may have to make monthly payments to pay off a medical lien against you personally.

Whether your medical lien involves subrogation and a lien against your settlement or a lien against your personal assets, a lawyer can help. Discuss your unique situation with a lawyer in Texas for tailored legal advice.