What is a Medical Lien?

Medical bill with stethoscope

After a serious personal injury or car accident, you may be in need of urgent medical care. Emergency services can be shockingly expensive: the average ER bill for the US in 2019 was around $1,150. If you need extensive treatment and imaging, this can add up to thousands or even tens of thousands of dollars more. You may be wondering how these medical bills are addressed in the case of a personal injury or motor vehicle accident. In most cases, your provider will enact what is known as a “medical lien.” 

What is a Medical Lien?

If you do not have health insurance or are otherwise unable to pay your bills at the time of treatment, your doctor may place a “medical lien” on your final settlement amount. This is a legal claim on the amount owed in medical bills to be paid to the provider after you have settled your case. In Colorado, a provider can enact a lien by having you sign a document before receiving treatment or by simply asserting their rights under state law. 

Do All Healthcare Providers Use Medical Liens?

No. Liens are still a risk for healthcare providers, since not all personal injury cases result in settlement. In the event that a patient loses his or her lawsuit, he or she will still be obligated to pay any outstanding debts. However, financial circumstances may mean the provider will have to agree to a minimal payment plan or even send the debt to a collections agency, after which it is highly unlikely they will receive the full amount owed. For this reason, there are many providers who will not operate on a lien basis. 

If you have received emergency medical care and your doctor chooses not to enact a lien, you will be expected to pay in a timely manner. If you  do not have insurance or you cannot afford to pay the balance after insurance, you may speak with your attorney about other options, such as a letter of protection. 

Letters of protection are another legally binding agreement between a patient and their doctor. They guarantee a repayment of debts once a settlement has been reached. This may be a means of avoiding more aggressive tactics of recovering your debt, such as being sent to collections. 

Medical Liens With Insurance?

If you have health insurance, you will not necessarily need to have a lien placed on your settlement. Your insurance should cover a majority of the medical bills after your deductible has been met, leaving you with a more reasonable balance. If the balance owed is high, you may work with your provider to develop a payment plan or other solutions to pay down the debt. 

What is Insurance Subrogation?

In the event that your medical insurance does pay for the majority of your outstanding healthcare bills, you may find that your settlement is still affected through what is known as “subrogation.” Subrogation is the means by which your insurance carrier reclaims the amount paid out after a settlement has been reached. 

For example, let’s say you were injured by another driver in a car accident. Your medical bills reached $20,000, and your insurance covered 80% or $16,000. You decided to sue the person who hit you and were ultimately awarded $50,000. Through subrogation, the insurance company can exercise a legal claim to $16,000 of this settlement amount to recoup what it paid originally. 

While this may seem unfair, it is actually justified. The cost of your medical care will be figured into your final settlement amount. Any reimbursement for medical bills should go to the entity who paid them. 

Accident Attorney in Colorado

If you are in need of a qualified personal injury and car accident attorney in Colorado, contact Dave Roth with the Roth Group. Dave is a compassionate lawyer with exceptional negotiation skills. He can help you avoid being pressured by your insurance company and healthcare providers so you can focus on recovery. Call or go online today to schedule a free consultation.