In the event of personal injury, you are entitled to damages covering pain and suffering, lost earning capacity, diminished quality of life, and medical expenses. Whether you win a court case or (more likely) settle out of court, the way your medical expenses are handled will have an impact on where the rewarded amount goes.
Healthcare providers, insurers, and other parties will likely seek reimbursement for the costs they incurred treating you for your injuries. These claims are referred to as liens. Any lien made against your settlement must be paid, though their amounts may be negotiable.
Hospital and Healthcare Provider Liens
Hospitals and doctors may have had to treat you at their own expense. If this is the case, they are entitled to reimbursement. The way this is handled depends on the state and who is making the lien. In Illinois, the amount caps out at 40% of your settlement if both a provider (such as a hospital) and a professional (such as an individual doctor) have a lien against your settlement. This amount is reduced to one third if only a provider or professional (not both) makes the lien.
In order to make these claims enforceable, healthcare providers must follow specific protocols. Otherwise, the lien isn’t enforceable.
This doesn’t mean you wouldn’t be responsible for the amount, however, nor does the 40% limit keep you from having to pay amounts beyond that. The upside is your attorney may be able to negotiate that amount down, so there is a good possibility that you won’t have to pay the full amount out of pocket.
Health Insurance Liens
If your medical costs were covered by health insurance, your insurance provider will be able to make a lien against your settlement. Most insurers require you to report personal injuries, and if you don’t, they will send you a letter asking you if your injury resulted from an accident. You must reply to this letter—otherwise, you may lose your rights to healthcare insurance and other benefits.
The amount required by your insurance provider may be influenced by various factors. For instance, if you were partially at fault for your accident, then the amount the insurance company could receive would be reduced. Coverage from automobile insurance can also prevent a health insurance lien from exceeding your settlement.
Your attorney may also be able to negotiate for a lower amount, especially since your insurer will only be paid if you win or settle the case. If the amount they require is too high, you might not pursue damages, and they won’t get paid. As such, it may be possible to work with them to reduce the lien.
Medicare, Medicaid, and other government organizations may have paid the cost of your medical bills, so they would also be entitled to reimbursement. Unlike healthcare and insurance liens, the amounts in these liens cannot be reduced, so they must be paid in full.
In any case, your attorney will typically handle the process of paying personal injury liens, so you likely won’t have to deal with the math yourself. What’s more, experienced attorneys, like us at Hart David Carson LLP, can negotiate to help you get the maximum amount for your injury.