For the next two blog posts, we will talk a little about personal injury settlements and liens. Many of our personal injury clients have questions about settlements and liens, and we thought it would be helpful to address these questions in a blog series.
No one plans on being in a personal injury accident. Unfortunately, car and motorcycle accidents, falls, and animal attacks happen every day. In November 2013, the National Highway Traffic Safety Administration (NHTSA)[i] reported that in 2012, roughly 2.3 million vehicle accidents caused injuries. That’s approximately 6,300 injury-causing car accidents every single day!
What Are Liens?
Someone who has been injured will seek medical help and receive bills for this help. This is where, in many cases, the term lien comes in. A lien is medical expenses an entity pays, e.g., Medi-Cal or your private health insurance. Upon settlement of the personal injury case, these expenses must be paid back to the entity. In California, you may have to pay back private health insurance companies when they pay for your treatment.
So let’s say that you suffer neck/back pain and a broken arm from a car accident that was not your fault. If you are insured, your insurance will likely pay for the treatment you receive. Generally, however, your health insurance plan has the right to be reimbursed for the treatment it covers when the injured/insured party makes a liability insurance recovery. In other words, if you sue the driver who rear-ended you in the above scenario and agree to a settlement with the other driver, your health insurance plan will be reimbursed for their “losses” or payments made for your treatment.
“Losses” in this context means that the health insurance plan does not pay the physicians or hospital what the physician or hospital would bill to someone completely uninsured. They may have a pre-arranged agreement that the hospital will be paid 25 cents per dollar of what they typically charge. For example, when you arrive at the emergency room and are given an examination by an ER physician, the hospital may bill $350. However, because of the pre-arranged agreement with the health insurance provider, they only pay $100 for this exam. The health insurance company now has a lien for $100 on your personal injury case.
In our next post, we will discuss the different types of liens. As you may expect, they don’t always involve a healthcare provider. Every case is unique and should be examined by a knowledgeable and trustworthy personal injury attorney. If you have questions about personal injury cases or liens, please get in touch with Eason & Tambornini, A Law Corporation today.
[i] U.S. Department of Transportation, National Highway Traffic Safety Administration. (2013) Traffic Safety Facts, Research Note: 2012 Motor Vehicle Crashes: Overview. (Report No. DOT HS 811 856) http://www-nrd.nhtsa.dot.gov/Pubs/811856.pdf
