The insurance company wants to settle my case, but tells me there may be some liens which have to be paid out of my settlement. What do I do?
When you are involved in an accident, there are several potential sources which may pay your medical bills. But many of these expect to be repaid when you settle the case with the person or corporation who caused your injury. The most common sources of payment for your medical bills before the case settles with the at-fault party are 1) worker’s compensation (if you are on the clock at the time of the accident), 2) your PIP coverage under your auto insurance (if you are in an automobile accident), private health insurance, health insurance covered under (Federal Employee Health Benefits Act) if you are a federal employee, Medicaid, or Medicare. Sometimes, a combination of these different sources pay your medical bills.
Many individuals believe that the insurance company of the person who caused the accident should be all the bills as they occur. In Kansas, this is not the way auto accident bills are paid initially.
In many situations, various insurers will attempt to place a lien on your settlement. If you have no means of payment, the hospital may file a lien on the settlement proceeds. When a lien if filed, the insurance company with whom you are settling will usually insist that the entity claiming a lien is made a payee on the settlement check. This will likely delay your ability to access the settlement proceeds until you agree to pay the lienholder back in full or negotiate an amount the lienholder will accept. This is where hiring an attorney is extremely beneficial. Often times, getting an insurance company to pay policy limits on a case where there are significant medical bills is not difficult. The real challenge is protecting the settlement proceeds from the various entities claiming liens. Obviously, the less you pay them, the more it leaves for you. At Patterson Legal Group, we have an employee who serves as benefits coordinator to help ensure that you receive adequate compensation for your injuries.
There are many different statutes and complicated rules governing these liens. It is important to note that just because someone claims a lien, it does not mean it is legally valid. For example, sometimes private health insurance companies are not entitled to be paid back from a settlement with the at-fault party. However, this regulation is sometimes over ruled by federal law if the health insurance is formed under federal law known as ERISA (Employee Retirement Income Security Act). Sometimes insurance companies claim they have ERISA rights when they don’t.
Your own automobile insurance company is not entitled to assert a lien if the settlement you received does not account for all of your damages. Even if there is a valid lien filed, an attorney has many different arguments which can be used to reduce the amount of a lien. Therefore, just because a lien is being claimed on your settlement proceeds, does not mean it has to be paid back. You should always consult with an attorney in cases where liens are being asserted. Patterson Legal Group, LC has extensive experience in this area and it may be to your benefit to sit down for a no cost consultation.