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Liens in Your Personal Injury Case: Medical Providers and Health Insurance in Missouri and Kansas

When you get a personal injury settlement, you may be surprised to find that third parties have a right to be paid a portion of your settlement.  Often, third parties may claim a right to reimbursement when in fact they have no legal right to reimbursement and even know it. An excellent personal injury lawyer will ensure that any asserted liens are valid and then may be able to get liens reduced and resolved.

Often, medical providers who have not been paid may assert a lien on a personal injury settlement when that provider has treated you for injuries for which you are being compensated in the settlement.  This could include services from EMS (ambulance), an emergency room, physicians, chiropractors, physical therapists, and other healthcare providers. Sometimes, even your health insurance company may assert a lien.

 

What Are Hospital Liens?

 

In many states, hospitals can assert a lien on a personal injury settlement or judgment.  While these are typically referred to as “hospital liens,” these lien rights are granted to most healthcare providers, including physicians, chiropractors, and physical therapists.  For example, let’s say you are injured from a fall on steps that have been negligently maintained by a landlord, and you do not have health insurance. The providers who treat you for these injuries can assert a lien on your settlement or judgment.

 

Kansas and Missouri Hospital Lien Statutes Compared

 

Both Kansas and Missouri have hospital lien statutes, but the process for asserting a lien is different in each state.  In general, for a lien to be valid in Missouri, the healthcare provider must send notice by certified mail to the insurer and the at-fault party, and this notice must contain specific information about the claim.  Kansas, on the other hand, requires that a written notice containing certain information must be filed with the district court of the county in which such healthcare provider is located.

Often, when a person doesn’t have health insurance, it can be challenging to find medical providers who will provide treatment.  This can be especially true when trying to find treatment with specialists (orthopedic surgeons, neurologist, etc.). Sometimes, however, these providers may agree to treat on a lien basis, meaning that they will be reimbursed from your settlement and agree not to bill or pursue collection until the case is settled.

One benefit of the hospital lien statute is that each state may require, depending on the amount of the settlement, that the providers take a reduction of the amount of their bill, and that this amount that they are entitled to under the lien statute will resolve their bill in full.  In other words, a provider who asserts a lien and is paid from a settlement cannot later attempt to collect the full amount of the bill.

 

Health Insurance Liens 

 

Often, health insurance companies will assert a right to reimbursement on a personal injury judgment or settlement.  However, Missouri and Kansas have laws prohibiting health insurance providers from taking money from your settlement.  The reason these liens are prohibited is that you, by paying premiums and/or working for an employer, have already paid for the benefit of receiving the healthcare.  If a health insurance company were to be reimbursed from a settlement as well, they would have been paid twice for the contractual agreement they had reached with you.  There are, however, several exception provided under federal law. These exceptions, which are listed below, will be discussed in more depth in upcoming blog posts.

 

Health Insurance Exceptions Under Federal Law 

 

Although Missouri and Kansas both have laws prohibiting healthcare insurers from asserting a right to subrogation on a personal injury settlement, federal law allows specific types of health insurers to assert such rights.  The reasoning is that either taxpayers or your employer directly funds these insurers, and therefore, these third parties have a right to be repaid.

These exceptions include:

  • Medicare: Taxpayer-backed health insurance for those who are 65 and older (although, arguably, if you have paid for Medicare from your paychecks, then Medicare should not have any right to reimbursement).
  • Medicaid: Taxpayer-backed health insurance for low-income Americans (while this right of reimbursement makes more sense because these benefits have not been paid for, allowing Medicaid to be reimbursed continues to inflict harm upon those who are the poorest in our society (and who have now also been injured).
  • Self-funded ERISA Plans: Specific health benefits provided by your employer, not an insurance company. Not all ERISA plans result in liens; rather, only “self-funded” plans result in liens.  Sadly, ERISA was originally enacted to protect employees, and employers who have provided health benefits to an employee in return for an employee’s service should not be entitled to reimbursement.  Unfortunately, Congress and the Supreme Court have continued to construe ERISA in favor on employers, and Self-Funded ERISA Plans are given some of the broadest subrogation rights in our legal system, often to the enormous disadvantage of injured people, even when those injuries are catastrophic.
  • Tricare or VA Liens: Health insurance for active-duty military and veterans.  This is one more way that our service members are disadvantaged—even though they have paid for their healthcare benefits by virtue of their service to our country, they must pay for any benefits provided by Tricare or the VA because of their injuries.

There are many different types of liens that can be asserted on a personal injury settlement.  In reality, much of an excellent personal injury attorney’s time is spent confirming that any asserted liens are valid, and then working to minimize those liens to the extent possible.

 

Contact A Personal Injury Lawyer 

 

If you have been injured in an accident, chances are good that someone will try to assert a lien on your settlement.  Liens can turn otherwise straight-forward cases into difficult cases, and resolving liens can be a cumbersome and overwhelming process.  If you have been involved in an accident, or if you want to talk with an attorney about making sure any liens are handled appropriately, call Aaron House today for a free consultation at 816-875-4260.

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