How Much Will Your Healthcare Provider Take from Your Settlement?
November 14, 2016 in Educational
If you’re pursuing a personal injury claim, be aware that your healthcare provider will likely want a chunk of your settlement. And, it’s more than just a bill in the mail—they can actually place a lien on your settlement, which can be enforced by a court. The most common health-related liens that can take away from your settlement proceeds are:
Medicare and Medi-Cal
While Medicare and Medi-Cal differ in how they are administered and whom they are administered to, they are similar in that they are both government funded “secondary payers” (meaning they are intended to be the last in line to compensate health providers).
When you file a personal injury claim—whether you hire an attorney or not—you have an affirmative duty to notify Medicare or Medi-Cal, so they know there may be another source available to pay for your medical care. They will pay your medical bills up front, but will compile a list of treatments and services that they deem to be related to your personal injury claim. Once you resolve your case, you will notify them of the money awarded, your attorney’s fees, and any costs that were advanced, after which time they will generate a final amount for you to reimburse.
We’re seeing a relatively new phenomenon of health insurance providers writing a right to reimbursement (sometimes outwardly referred to as a lien) into HMO and PPO policies. While you may not have an affirmative duty to notify your health insurer of a personal injury claim, they will usually know when you are pursuing a claim based on your doctors, providers, and key words in your medical records.
Again, your health insurance will pay the costs up front, and then claim certain services they’ve paid for in a lien. In the end, it’s your attorney’s job to resolve the claim and minimize your liability. Oftentimes, the total sum can be reduced by your attorney fee percentage and a “pro-rata” (or “portioned”) share of the legal costs.
There are also many other things your attorney can do to lower your lien, such as bringing in case details, out-of-pocket medical expenses, lost earnings, insurance policy limits, and various other factors.
Liens placed under the Employee Retirement Income Security Act (ERISA) are the most difficult for personal injury attorneys to work with, because they come from self-funded plans with federal involvement. ERISA plans are essentially exempt from any obligation to reduce their reimbursement claims. A great attorney might still be able to manufacture some leverage, but an ERISA lien will usually end up taking a sizable piece out of your settlement.
An Attorney is Your Greatest Ally in Resolving These Liens
Personal injury settlement liens are yet another set of reasons why you need an attorney to oversee your claim. If you try to manage the case yourself, you could fall into a worst-case scenario of being hit with health-related liens that effectively wipe out the compensation from your settlement.
If you have been recently injured and would like a consultation to explore whether you have a viable personal injury claim, contact Belgum, Fry & Van Allen today.