Our last post gave you an overview of personal injury settlements and liens. We discussed what liens were and where they came from. In this post, we will discuss the different types of liens. We’ll look at a few of the most common lien situations and how they relate to personal injury cases. Please remember that every case is unique and should be individually examined by an experienced personal injury attorney.
Types of Liens
Liens Imposed by Medi-Cal/Department of Health Care Services (DHCS) or Medi-Care
Medi-Cal and Medi-Care are not the same, but they have many similarities. For example, they operate on tax dollars, require mandatory claims reporting, and have similar resolution processes. If you were injured in an accident that was not your fault, Medi-Cal or Medi-Care would cover your medical expenses as they would typically, depending on your status and your upfront costs on the plan. However, both are entitled to be repaid directly from any third-party (the at-fault driver) settlement you receive for that accident.
Once the claim against the at-fault driver has been filed and these agencies have been notified, they will begin sending out their notice of lien and the charges associated with that lien. They will continue to send updated copies every few months with any new or additional charges. It’s essential to review the liens as they come in and contest any charges unrelated to the accident.
As your case progresses and nears a settlement, your attorney will notify Medi-Cal or Medi-Care of the proposed settlement figure. Attorneys have many strategies and options for requesting reductions in the total repayment amount for medical liens, and this process will play itself out over the life of your case. In this case, once the settlement is reached, the automobile insurance carrier will need proof of the amount paid to Medi-Cal or Medi-Care. Then, two checks will be issued: one to reimburse Medi-Cal or Medi-Care and the other to you/your attorney for the balance. The attorney receives both checks and mails one to Medi-Cal or Medi-Care.
Employment-Based Health Insurance Liens
If you are covered under an insurance plan provided by your employer, then you are likely in California Civil Code 3040 and 3045 liens. Your private employment-based insurance will make immediate payments when charged for your emergency room visit. However, attorneys are not necessarily required to notify the health insurance companies that they paid for treatment resulting from a third-party accident. The insurance company will review all charges they receive, and if they determine, via insurance payment codes, that the billed treatment resulted from an accident, they will investigate. The lien will exist, however, with or without notice even after the case is completed so long as it falls within the contracted time- this varies by plan and would need to be reviewed. It is likely best to have your attorney square away all liens for you. Otherwise, you could risk spending any settlement monies and having a lien holder come after you for the funds they realize they are owed.
California 3040 and 3045 liens vary depending on whether an HMO or a PPO health plan insures you. The hospital or provider can also bring these liens directly, with the health insurer being out of the loop. Generally, 3045 liens deal with emergency medical treatment provided immediately after an accident. Three thousand forty liens deal with the follow-up treatment with your regular primary care doctor. The reductions available for 3045 liens are fewer because the therapy is considered the most crucial. Three thousand forty liens have more wiggle room and will be more accommodating to reductions and unique circumstances in some instances. As with Medi-Care and Medi-Cal, the private health insurance company or the hospital or provider will, once engaged in the case, begin sending lists of charges that are part of the lien. Once the case is near resolution, your attorney will begin negotiating the lien. Sometimes, the private health insurance company will not need to be listed on the settlement check or get their check from the auto insurance company. They will instead accept a check written directly from the client’s trust account where the single settlement check was deposited.
Contractual Liens
This category of liens may be surprising, considering you probably have yet to learn you are on the hook to repay these expenses. This is why you must consult an attorney in personal injury accidents. This type of lien relates to your auto insurance policy. When you purchased your policy, you may have also purchased some personal injury protection plan that included a set dollar amount that could be used to pay for injuries related to car accidents. This limit is usually $5,000.
If you get hurt in a car accident and seek a treatment not covered by your health insurance provider, you can have your bill sent directly to your auto insurance company for payment. While this may sound great, auto insurance companies have the right to be reimbursed out of settlement monies, just like health insurance companies. When you signed your auto insurance documents, you agreed to pay the premium and repay the insurance company once a settlement is reached. Thankfully, auto insurance companies usually accept about half the money spent on treatment. So, depending on how much you pay in premiums, it may or may not be worth it.
Workers’ Compensation Liens on Your Personal Injury Case
Another lien is a Workers’ Compensation Lien. If you are hurt on the job, your injury treatment will be through the workers’ compensation system, not your private health insurance. However, the workers’ compensation carrier has a right to be reimbursed for their payments. For example, workers’ compensation will pay for your treatment if you are rear-ended in a work vehicle. If you sue the other driver and obtain a settlement, workers’ compensation has a right to be reimbursed out of that settlement. Once a settlement is reached, the workers’ compensation carrier will either get a separate check or can be paid from the client trust account.
Voluntary Liens
Let’s say that you seek chiropractic treatment after your accident. Most insurance plans do not cover chiropractic treatment, but chiropractors often provide treatment on a lien basis. This voluntary lien requires the patient’s signature, usually the personal injury attorney. This makes the patient/client and the attorney aware of the lien. Some of the liens above will not apply if you do not collect on the personal injury case. Still, these monies are owed to the chiropractor regardless of whether or not the patient recovers any monetary reward. These liens are most frequently seen at chiropractors’ offices, independent physical therapy offices, and other small-shop providers. These liens often can be reduced, but it is ultimately up to the provider and the language in the contract that was executed. These providers have no right to be named on the settlement check and can be paid from the client’s trust account.
Understanding liens and how they relate to your personal injury case is complicated. It’s usually harder to resolve liens than to prove the actual case. In severe cases, a limited amount of money is generally available from liability insurance, and securing that payment is easy. The hard part is negotiating the medical liens so everyone gets a fair share. You must hire a personal injury attorney at the onset of the problem. Not only will you potentially save time and money, but you’ll also save yourself from unnecessary stress. Contact Eason & Tambornini, A Law Corporation, to discuss liens and your personal injury case.
For Medi-Care: 42 U.S.C § 1395y(b)(8)- Required Submission Of Information By On Behalf Of Liability Insurance (Including Self-Insurance), No-Fault Insurance, And Workers’ Compensation Laws And Plans. For Medi-Cal (DHCS)- Welf. & Inst. Code § 14124.73(a)- Requires “beneficiary” to notify Medi-Cal within 30 days of filing an action.
