A lien is a legal claim against your property, generally the settlement or award for a personal injury case, for services rendered after the date on which the lien is signed; treatment that is provided after the patients has been stopped, discharged, or the in the event the insurance company has denied medical coverage. The lien form must be signed, first by the patient, then by the attorney or representative of the patients personal injury claim. In most cases, medical lien matters will be put on the "back burner", and determined once the case-in-chief is decided. The medical facility will only pursue the case for their medical lien after a court decides or a settlement is reached between the patient and the insurance company, wherein the insurance provider is liable to the patient for a specified amount.
Most people involved in a motor vehicle accident retain a lawyer and bring a personal injury claim/lawsuit against the person that injured them.
- If no-fault/PIP benefits have been cut-off by the carrier or the policy has been exhausted, and the patient has no other medical coverage available, the medical provider can continue to treat the patient on a lien basis.
- The medical provider is not obligated to continue to treat the patient.
- If the medical provider properly secures a lien, the medical provider is entitled to have its medical bills paid from the settlement of the patient’s personal injury claim/lawsuit
- The medical provider’s bills will not be paid until the patient’s claim/lawsuit has been resolved. This can be a number of years.
- Attention should be paid to the amount that the medical provider allows the medical bills/lien to accrue to because a lien does not always guarantee payment.
- If the patient loses their lawsuit, the medical provider will not get paid.
- If the lien gets too high, the patient may refuse to accept a reasonable offer to settle the lawsuit because after the lien is paid, the patient will net very little money.
- The patient’s attorney may try to negotiate down the amount of the lien with the medical provider in order to effectuate a settlement.
- There may be other medical providers who also have liens on the claim/lawsuit, and there may never be enough from the settlement to resolve all liens.
- If the patient is an infant, under the age of 18, the Court must approve the settlement and has the right to order that the lien not be paid.
- If the insurance policy against which the injured party brought his claim is small, there may not be enough money to satisfy the lien.
Securing a Lien
- The patient must sign a Lien Agreement to the benefit of the medical provider.
- The Lien Agreement must be served upon the patient’s attorney in a manner that evidences proof of receipt (Certified Mail Return Receipt, FedEx).
- Every effort should be made to get the patient’s attorney to sign the lien acknowledging the medical provider’s right to receive payment.
- Efforts can include the refusal to continue medical treatment to the patient unless the attorney signs the lien.
- The Lien Agreement should also be served upon the insurance carrier and defense counsel for the defendant in the patient’s personal injury lawsuit/claim.
- The identity of the defendant’s attorney and insurance carrier can be ascertained through correspondence the medical provider will receive for the patient’s medical records or through Court websites.
Value of the Lien
- The Lien will not be paid unless the patient prevails on the lawsuit.
- New York’s No-fault law limits recovery in automobile personal injury lawsuits only to those persons who are “seriously injured” by someone else. Many injured people never recover anything in their claim.
- Insurance Law 5102(d) defines a ‘serious injury” as one that results in:
- Significant disfigurement;
- A fractures;
- Loss of a fetus;
- Permanent loss of use of a body organ, member, function or system;
- Permanent consequential limitation of use of a body organ or member;
- Significant limitation of use of a body function or system; or
- A medically determined injury or impairment of a non-permanent nature which prevents the injured person from performing substantially all of the material acts which constitute such person’s usual and customary daily activities for not less than ninety days during the one hundred and eighty days immediately following the occurrence of the injury or impairment.
- The minimum insurance limits in New York State are $25,000/50,000.
- This means that there is $50,000 available for each accident and no one person can get more than $25,000