When a patient suffers a serious injury caused by a medical error, they may still be worrying about who will pay the medical bills to fix the injury. It is unfortunate that cost has to be such a concern for injury victims who need care through no fault of their own. Even if you don’t have the money to pay for medical treatment after suffering a malpractice injury, the hospital may treat you with a medical lien in place to recover costs.
If you have a medical lien after suffering a medical injury, your lawyer can help you settle the amount so you can still recover compensation for your injuries. If you want to know more about medical liens and how they can affect your medical malpractice lawsuit, contact an experienced medical malpractice law firm for more information.
What Is a Medical Lien?
A lien is a security interest that is used to secure payment for a debt. One of the most common types of liens is a home mortgage. A mortgage is an agreement between the lender and the property buyer where the lender keeps a security interest in the property until the mortgage is paid off.
Another type of lien is a tax lien, where the IRS or state tax agency puts a lien on the taxpayer’s property to secure payment of unpaid income tax. The property owner cannot sell or transfer the property that has a tax lien until the lien is removed.
A medical lien is commonly used where medical care is provided that is related to an injury that is allegedly caused by someone else. For example, if you suffer a slip and fall injury at a supermarket and need medical care, the hospital could treat you with a medical lien on any medical expense damages that you recover from the supermarket.
Also known as a hospital lien or a healthcare lien, it can be a lien by an insurance provider, medical group, healthcare provider, or hospital to recover the costs of emergency care, medical services, or other healthcare costs. The healthcare provider or hospital could then claim a portion of the jury award or settlement amount that the patient receives after the injury.
When a patient shows up to the hospital for medical care, as part of the intake, a medical lien is something the hospital is considering. The hospital may ask if the injury or condition is caused by an auto accident, workplace injury, or if there may be a 3rd party liable for the injuries. This is to put them on notice of a possible 3rd party claim which may lead to a medical lien for your immediate medical care.
Medicare and Medicaid Liens
Medicare and Medicaid also have recovery claims for care related to a personal injury accident. According to the Centers for Medicare & Medicaid Services (CMS), Medicare may not pay for a beneficiary’s medical expenses when payment “has been made or can reasonably be expected to be made under a workers’ compensation plan, an automobile or liability insurance policy or plan (including a self-insured plan), or under no-fault insurance.”
For example, if you are injured because of a surgical error and are seeking treatment, the surgeon who caused the injury should be responsible for paying for any necessary care caused by the accident. If the surgeon will not pay promptly or there is a dispute, a Medicare patient can receive care and the provider will bill Medicare as the primary payer. Medicare can pay conditionally, with a right of recovery if there is a settlement, judgment, award, or payment.
Medicare indicates that the secondary payer recovery claim is sometimes called a Medicare lien, but is actually a Medicare recovery claim. Medicare can recover from any entity, including the beneficiary, medical care provider, physician, attorney, or insurer that has received a primary payment.
What Is Subrogation?
Subrogation is the right of another party to request reimbursement from the at-fault party after they have paid for care. For example, your car insurance provider generally has a right of subrogation after they’ve paid your medical bills and car repairs to seek reimbursement from the at-fault driver or the driver’s insurance company.
Medicare has similar subrogation rights for medical care. Once Medicare has paid for your medical care, they can seek reimbursement from the party at fault for causing your injuries. Medicare subrogation is set according to a formula. The amount the injury victim receives is reduced by the beneficiary’s reasonable procurement costs, such as attorney’s fees and legal expenses.
Under 42 CFR 411.3, ” Medicare reduces its recovery to take account of the cost of procuring the judgment or settlement, as provided in this section, if (i) procurement costs are incurred because the claim is disputed; and (ii) those costs are borne by the party against which CMS seeks to recover.”
Can a Lawyer Negotiate Medical Liens?
In most cases, your lawyer can negotiate medical liens. Your lawyer can negotiate to reduce the amount of the lien so the injury victim can keep more of their settlement award. Many many providers have an interest in negotiating the medical lien, even if it means accepting a lower amount. Negotiating the lien can help the medical provider recover their money more quickly and avoid the time and expense of trying to recover the money through legal proceedings.
For example, a patient had to receive $100,000 worth of medical care after a medical malpractice injury in a Chicago hospital. The injury victim takes their case to court with a medical malpractice lawsuit. As a result of the lawsuit, the injury victim receives an award of $150,000, allocated as $80,000 for medical expenses, $20,000 in lost wages, and $50,000 for pain and suffering. The injury victim’s lawyer could negotiate with the medical provider to reduce the bill by 20% so the injury victim only has to pay $80.000 and can keep the remaining $70,000.
If the injury victim did not win their personal injury lawsuit, then accepting any amount for the lien can be better than trying to recover payment through collections. The injury victim may not have enough money to cover the entire amount of the medical lien and the medical provider risks going through the costly process of getting a court judgment or going to collections only to discover that there is not enough to cover the costs. A medical provider could even lose money by going through the courts because they have to pay the court fees and legal expenses to recover money that just isn’t there.
State Medical Lien Laws
Medical liens are different in every state. Each state has its own laws and regulations for medical liens and hospital liens for patients who need care and may be receiving compensation through a medical malpractice or personal injury lawsuit. Talk to a medical malpractice attorney to understand how your state’s medical lien laws can impact your malpractice award.
Hospital Liens in Chicago
Under Illinois Statute 770 § 23/10(a), “The total amount of all liens under this Act, however, shall not exceed 40% of the verdict, judgment, award, settlement, or compromise secured by or on behalf of the injured person on his or her claim or right of action.”
In order for a healthcare provider to attach or protect a lien, the lien has to include a written notice with the following information:
- Name and address of the injured person
- Date of the injury
- Name and address of the health care professional
- Name of the party alleged to be liable for making compensation to the injured person (in a medical malpractice lawsuit, this may be the doctor or hospital responsible for causing the injury)
The lien notice has to be served both on the injured person and the party allegedly responsible for the injury.
If you have any questions about if the hospital has a lien against you for treatment after a medical malpractice injury or how much you may have to pay after a medical malpractice settlement, talk to your Chicago medical malpractice law firm for legal advice.
Maryland Medical Liens
Under Maryland Code §16-601(a), “A hospital which furnishes medical or other services to a patient injured in an accident not covered by the Maryland Workers’ Compensation Act has a lien on 50% of the recovery or sum which the patient or, in case of death, the heirs or personal representative of the patient collect in judgment, settlement, or compromise of the patient’s claim against another for damages on account of the injuries.”
The medical lien applies to the “reasonable and necessary” charges for treatment, care, and maintenance provided to the patient. However, the charges cannot exceed the amount allowed by the state’s Workers’ Compensation Commission for services.
To perfect a hospital lien in Maryland, the hospital has to file a notice of lien with the court and send a copy to the person alleged to be liable for the injuries. The notice has to have the following information:
- Name and address of the injured patient
- Date of the accident
- Name and location of the hospital
- Amount claimed
- Name of the person alleged to be liable for the injuries.
Medical Liens in Pennsylvania
Only a handful of states do not have statutory provisions for medical liens and hospital liens, including Pennsylvania. This does not mean that Philadelphia hospitals can’t place a lien on your personal injury claim or try to recover payment through collections. Hospitals and medical providers in Pennsylvania can still recover charges for medical care under a lien but there are no specific rules and restrictions for hospitals. For example, unlike Illinois and Maryland, there is no statutory limit to the percentage of the judgment that is recoverable.
How Much Is a Hospital Lien?
The hospital lien can be very expensive. Medical care in the United States is very high, even compared to other developed countries. Medical care for surgery and hospital care in the U.S. can easily amount to hundreds of thousands of dollars. According to HealthCare.gov, the average cost of a 3-day stay in the hospital is around $30,000.
If the patient cannot pay for the care with Medicare, Medicaid, or personal health insurance, the hospital will use a lien to try and recover the money if the injury was caused by someone else.
According to the Kaiser Family Foundation (KFF), “About half of U.S. adults say they have difficulty affording health care costs.” Older adults with Medicare still have trouble paying the costs of care not covered by Medicare, including dental care, hearing services, and prescription drugs.
According to the Commonwealth Fund, the U.S. spends more on health care as a percent of GDP than any other developed country. From 1980 to 2018, the U.S. spent almost 17% of GDP on healthcare, with Switzerland in second with 12.2%. Other countries, including Canada, Norway, Netherlands, the U.K., and New Zealand spent closer to 10% of GDP on healthcare. Patients in the U.S. also spend more on out-of-pocket costs for care than most other developed countries.
Can a Medical Malpractice Lawyer Help?
You may have never thought about a medical lien before suffering a serious injury caused by medical malpractice or a personal injury accident. Medical insurance can be a complicated matter and the laws are changing all the time. Healthcare providers may have different rules and even prices for patients based on who is paying.
A medical malpractice attorney can help by explaining the process of a medical injury lawsuit, who will pay your medical bills, and how you can recover compensation for your injuries. Your attorney can also negotiate on your behalf, to maximize your settlement award so you see more of the money that you are owed after a medical injury.
Contact experienced medical malpractice attorneys who can look at your case, answer your questions, and help you understand your legal options to file a claim against a doctor or hospital after a medical error. Contact Gilman & Bedigian online or at 800-529-6162 for a free consultation.