ClaimClinic: Handling Liens
After you have settled your case, you may receive a notice from your health insurance company stating they have a right to be re-paid the benefits they paid for your medical treatment. Even if you have not received a notice, you need to be prepared for a notice of this type sometime in the future. While it may be a little disheartening to have to take some of your settlement money and pay a health insurance company back, remember that your settlement included the full price of your medical expenses. So if you got to keep your whole settlement and not pay back the health insurer, you would essentially be double dipping on your medical expenses. Additionally, keep in mind that health insurers only pay a reduced amount of your total bill and your Demand used the full face value of the bill. So even if you have to pay back the health insurer 100%, you are still making money on the difference between the face value of the bill and what the health insurer paid.
Liens are a very complicated area of law and if you intend to really argue over whether repayment is even proper you should retain a lawyer for this purpose. The issue is different for each state and there is Federal law that may supersede State law.
You should always try to negotiate down the lien amount with the adjuster handling the lien for the health insurer or medical provider. You can almost always get the amount reduced. Before trying to negotiate, make the lien adjuster show you the exact language in the health insurance policy giving them the right to get reimbursed and have them send you an itemized list of all payments they made so you can make sure they are all related to your accident treatment.
Many states have statutes (i.e. laws) that give hospitals the right to place a lien against your personal injury settlement. Statutory liens are some of the strongest liens in existence. Your state, if it has such a law, will have a list of requirements the hospital must meet to have a valid, enforceable lien. If you are interested in negotiating down a hospital lien, your first step should be to examine your state’s lien law and then research whether the hospital followed all the requirements exactly.
Balance billing is a growing trend among hospitals treating personal injury patients. Balance billing is where the hospital sends your bill to an insurance company (health insurer or other driver’s insurer) and gets paid a reduced amount. The hospital then goes after you for the reduction amount, or the difference between the face value of the hospital bill and what the insurance company paid.
This is not legal in some states. Nevertheless, it has not stopped hospitals from trying it.