After getting your personal injury settlement award, you may find that you do not get to keep all the money. This might happen because there may be parties who are holding liens on your award. Here are four examples of such parties:
Health Care Providers
If you don't have health insurance, then you can arrange a consensual lien (also called Letter of Protection) with a hospital when receiving treatment. The letter specifies that you intend to use your settlement award to pay for your medical bills. You can also make the same arrangement if you have health insurance, but it is inadequate for your injuries. Therefore, it is only reasonable to assume that your healthcare provider will seek to recover their money when you finally receive the settlement.
Workers ' Compensation
Workers' compensation will want a share of your settlement if you receive it from a third party. Consider a situation where you are employed as a driver, and you are injured in an accident caused by another motorist. Since you are injured on the job, workers' compensation will pay you for your injuries. If you decide to go after the other party too, and manage to get a settlement, then you will have to refund the money you obtained from workers' compensation.
Medicare and Medicaid
When you sign up for Medicaid, the state assumes your rights to medical care payments received from third parties. Therefore, the government will place a lien on your settlement (only the portion related to your injuries) when you receive it. Interestingly, even if you don't pursue the payments, the state can lodge the claim on your behalf and pocket it. The federal government has a comparable arrangement for Medicare, which shouldn't pay for your injuries when they have been paid for by workers' compensation or insurance.
Auto or Private Health Insurer
If you have private health insurance, and they paid for your medical bills, then they may also place a lien on your settlement. The same is true with your car accident insurer. This is necessary to prevent you from benefiting from your injuries; health insurance isn't meant to benefit you, but rather to help you get well. If the insurance pays for your injuries, and you also get a compensation award, then you are clearly benefiting from it if you get to keep both.
Fortunately, there are measures you can take to reduce the effect of liens on your settlement award. For example, insurers often negotiate for special medical care rates for their clients. Therefore, the face value of your bill may not be what the insurer paid for it. If that is the case, then you only have to refund the discounted rate your carrier paid for your treatment, and not the face value amount of the bill. Discuss these issues with your attorney, like Vaughan & Vaughan, to see what can be done.
Share17 March 2015
When I was injured in a slip and fall accident a few years ago, my family and friends had a hard time relating to the things I was going through. While some people thought that my decision to file a lawsuit was frivolous, others were under the impression that I would walk away as a millionaire. Their lack of personal experience with this type of legal problem left me feeling alone during one of the most difficult times in my life. That is why I decided to start this blog so that accident victims from all over would have somewhere to come to get the information and support that they need. I truly hope that this page can be that place for you.