If you are working with your lawyer towards a full and complete settlement award, it’s important to realize that your take home number will be less than the total amount in the award. For starters, you’ll have to pay your lawyer. Most lawyers operate on a contingency fee, meaning they get a percentage of your winnings (typically about one-third), so they have a vested interest in getting you as much money as possible.
However, your lawyer may not be the only one that you’ll have to settle up with after a personal injury award has been granted. In today’s blog, we explain why you may have a medical lien attached to your award, and what you can do about it.
Medical Liens In A Personal Injury Case
If you are injured and require medical attention, odds are you’ll visit the hospital or the emergency department and receive care. You’ll be billed for this service, and in most instances, your health insurance provider will pick up a portion of the tab. However, if it turns out that someone else was at fault for your injuries, your health insurance company can put a lien on your award amount to recoup costs that they incurred as a result of paying for medical services.
It may sound a little complex and like the insurance company is coming after money that you rightfully deserve, but it’s important to remember that you don’t get to have someone else foot the bill and then collect money for those bills. We find it easier for people to wrap their heads around this when we use an example.
Let’s say you were injured by another party and underwent emergency surgery. You were billed $5,000 for medical services. You had a $200 deductible, and after that was met your insurance company agreed to pay 80 percent of your bill. This means that they ended up paying $3,840 for your care, and you ended up being on the hook for a total of $1,160. When your claim is awarded, you are granted $5,000 for medical expenses (your total payout may be much higher, but you are given $5,000 to cover the $5,000 of medical expenses you incurred).
Your insurance company may place a lien on your award as a means of recouping what they paid for your medical services. After all, you personally only incurred $1,160 worth of medical expenses, it doesn’t make sense that you would receive $5,000 in an award for medical expenses. You would be required to use a portion of that $5,000 award to pay back the insurance company for their role in paying for your medical services.
When it comes to medical liens, it’s important to understand what they can be used to collect. An insurance company cannot place a lien on any out of pocket expenses you incur prior to the satisfaction of your deductible. Also, they cannot place a lien on you if your case proves to be unsuccessful. If you don’t win your claim, insurance is on the hook for the expenses they paid, and rightfully so. But if the insurance company pays for your medical expenses and you end up being reimbursed for your medical expenses, expect the insurance company to come knocking with a lien.
Medical liens are not the only type of lien that can be placed on your personal injury award. Other less common types of liens include:
- Veteran Affairs
- Child Support Payments
- Car Insurance-Related Liens
You may not be happy that a portion of your injury award is going to an insurance company, but it’s important to realize they too were financially burdened by someone else’s actions, and they can rightfully collect compensation, and that compensation is typically paid to you first. You’re only paying them back for expenses they paid for on your behalf and never truly incurred yourself. With all that said, this is why it’s so important to have a lawyer who understands the true medical costs of your injury so that you aren’t shortchanged when it comes time to collect on your injury claim.
For more information about liens, or for help with your personal injury case, reach out to Dean and the team at Margolis Law Office today.
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