As a personal injury lawyer, I work very hard to get you as much of your settlement money as possible. The, of course, involves making sure that any settlement or judgment is reasonable and adequately compensates an injured person for their losses. But, another goal is reducing liens and other rights to reimbursement that can reduce the amount of the settlement that goes to the injured person. Many third parties may have a legal right to a portion of an injured person’s settlement proceeds, even though they were not involved in the accident. Here’s what you need to know about liens, subrogation, and rights to reimbursements and how your personal injury attorney can help with them.
What is a Lien?
A lien is claim on an assert for a debt. With respect to settlements, a lien is a third party’s legal entitlement to be paid from the settlement for a debt owed by the injured party. Common liens include those asserted by medical providers.
What is Subrogation?
A related but somewhat different concept involves subrogation. Subrogation is the right of a third party to step into the injured person’s shoes to pursue the injured party’s claims. Subrogation allows an insurance company to act in your place, suing the at-fault party for you, and taking their portion of the settlement money.
How Can a Lien Affect My Personal Injury Case?
Many different parties can have a legal right to be reimbursed from a settlement for injuries. These include healthcare providers (medical bills), state agencies (past-due child support), Medicare and Medicaid, ERISA Plans that are self-funded (a type of group health insurance), Tricare/VA (for medical care), and many others. Handling the liens in a personal injury case can be overwhelming, and an excellent personal injury attorney will dedicate substantial time to ensuring that the liens are valid and then working to reduce any valid liens so that recovery to the client is maximized. Because the consequences of improperly handling a lien can be significant, it is best to hire an experienced personal injury attorney. Below is a bit more information on the most common types of liens.
Types of Liens and Subrogation
- Medical Providers: A medical provider who treated your injuries, which were caused by the at-fault driver, may have the right to be reimbursed from your settlement money. This could include hospitals, doctors, physical therapists, chiropractors, and other healthcare providers.
- Health Insurance: Kansas and Missouri do not allow health insurance providers to be reimbursed from a settlement. This is because a person with health insurance has already paid for the benefit of that insurance (through premiums or through employment). However, exceptions include Self-Funded ERISA Plans and Medicare/Medicaid.
- Self-funded ERISA Plans: These are insurance plans in which an employer directly pays the benefits through the employer’s assets.
- Medicare/Medicaid: Medicare and Medicaid are government-funded healthcare programs. If you have used these services, the government will have a right to reimbursement from your settlement money. In fact, Medicare has what is called a “super lien” that must be paid first before all other liens.
- VA or Tricare: Veterans Affairs health care (VA) and care for active-duty military (called Tricare) may also have a right to reimbursement. You are obligated to tell these providers that you are opening a personal liability claim.
- Workers’ Compensation: If your injury or accident happened at work, workers’ compensation may have provided you with benefits through your employer. If so, they may have a right to reimbursement for their costs.
- Past-Due Child Support: Those who have missed child support payments, perhaps even because of their injuries, may need to pay the outstanding support from their settlement. Future child support payments are not deducted.
- Case Advances: A third party may pay you an advance on your settlement. If so, they have rights to reimbursement when you do get the settlement.
Protect Your Settlement Against Liens
An experienced personal injury attorney can help protect your settlement from third parties, in part by ensuring that any liens are valid, and in part by negotiating and reducing any valid liens. If you have been involved in a car accident, or if you want to talk with an attorney about protecting a settlement from the claims of third parties, call Aaron House today for a free consultation at 816-875-4260.