Medical Liens in Personal Injury Cases
Medical liens in personal injury cases can substantially reduce the amount an injured person ultimately receives from a settlement. Hospitals, government programs, health insurers, and medical providers may have reimbursement rights connected to treatment received after an accident, and valid claims generally must be addressed before affected settlement funds can be distributed.
Because medical liens can significantly affect your net recovery, identifying and reviewing them early is important. Grissim & Waterman can evaluate the medical liens and reimbursement claims affecting your personal injury settlement, challenge improper charges, and pursue available lien reductions. Contact us for a free consultation about your Tennessee personal injury claim.
What Is a Medical Lien in a Personal Injury Case?
A medical lien is a legal claim against money recovered through a personal injury settlement or judgment. It may allow a healthcare provider or other entity to recover payment for medical treatment connected to the injuries that produced the legal claim.
The term is also commonly used more broadly for reimbursement interests asserted by health insurance, Medicare, Medicaid, and other payers, although the precise legal right differs depending on who is seeking repayment.
Medical liens in personal injury cases are important because the gross settlement amount and the amount the client receives are not necessarily the same. Attorney fees, case costs, valid medical liens, and other reimbursement obligations may need to be addressed before the remaining compensation is paid to the client.
How Do Liens in Personal Injury Cases Affect a Settlement?
Liens in personal injury cases can take a significant portion of a settlement, particularly when medical treatment was extensive or several entities seek repayment.
For example, an injured person might have a hospital lien, a private health insurance reimbursement claim, and a Medicare or TennCare interest connected to the same accident. Those claims must be evaluated individually rather than simply subtracting every amount demanded.
Without proper verification and lien negotiations, an injured person may receive substantially less from a personal injury settlement than expected. In some cases, claimed medical expenses and reimbursement obligations can approach or even exceed the settlement funds available.
An attorney from Grissim & Waterman can review which claims are valid, which charges relate to the accident, and whether reductions are legally available before calculating the client’s net recovery.
Who Can Assert Medical Provider Liens in Personal Injury Cases?
Several types of entities may have payment or reimbursement rights after a personal injury case, including:
- Hospitals that meet Tennessee’s statutory requirements
- Healthcare providers with unpaid bills or payment agreements
- Private insurers asserting contractual reimbursement or subrogation rights
- TennCare for certain medical assistance payments
- Medicare for qualifying conditional payments
Because these rights arise under different contracts, state law, and federal law, the existence of one medical lien does not establish that every claimed amount must be paid in full.
How Do Tennessee Hospital Liens Work?
Tennessee law gives qualifying hospitals a lien for reasonable and necessary charges for hospital care, treatment, and maintenance provided because of the illness or injury underlying a legal claim.
Are Tennessee Hospital Liens Capped?
Yes. Under Tennessee Code § 29-22-101, a hospital lien does not apply to more than one-third of the damages recovered through a judgment, settlement, or compromise. The statute also makes the hospital lien subordinate to an attorney’s lien.
The one-third rule applies specifically to hospital liens created under Tennessee’s Hospital Lien Act and should not be considered as a blanket cap on Medicare recovery claims, TennCare interests, private insurance reimbursement rights, or every unpaid medical bill.
How Does a Hospital Perfect a Medical Lien in Tennessee?
A hospital must comply with statutory filing requirements to perfect its lien.
Under Tennessee Code § 29-22-102, the hospital must file a verified written statement before or within 120 days after the patient is discharged. The statement must include information such as the patient’s identity, admission and discharge dates, the lien amount, and the parties believed to be liable for the injuries.
For Tennessee residents, the statute requires filing in the circuit court clerk’s office in the county where the hospital is located and in the patient’s county of residence, which is another reason why proper lien verification should occur before settlement funds are distributed.
How Do TennCare and Medicaid Liens Affect a Personal Injury Settlement?
TennCare has statutory rights to recover certain medical assistance payments when an enrollee obtains compensation from a responsible third party.
Tennessee Code § 71-5-117 gives the state subrogation rights for the cost of care or treatment for which medical assistance was provided and treats acceptance of medical assistance as an assignment of certain third-party insurance benefits to the state.
TennCare describes this as its right to reimbursement when it has paid for medical care, and another person or insurance company owes money because of the injury or illness.
Does TennCare Have to Be Checked Before Settlement?
For a personal injury case involving a TennCare enrollee, Tennessee law requires the plaintiff’s attorney to provide written notice to the appropriate TennCare entity before entry of the judgment or settlement to determine whether a subrogation interest exists.
The statute generally gives the relevant entity 60 days to respond, although it may take up to 120 days to provide the amount when additional time is necessary.
How Do Medicare Liens Work in Personal Injury Cases?
Medicare may make conditional payments for medical treatment when another payer, such as liability insurance, is ultimately responsible. When the beneficiary later receives a settlement, judgment, award, or other qualifying payment, Medicare may seek reimbursement for related conditional payments, also known as a Medicare Secondary Payer recovery claim.
Can Unrelated Medicare Charges Be Removed?
Potentially. Medicare’s recovery process allows a beneficiary or representative to review conditional payment information and dispute claims that are unrelated to the injury underlying the settlement.
The Medicare Secondary Payer Recovery Portal can also be used to review conditional payment information, dispute unrelated charges, submit settlement information, and request a final conditional payment amount when appropriate.
Starting this process early can reduce the risk of delaying settlement distribution while the final amount is determined.
Can Health Insurance Claim Part of a Personal Injury Settlement?
Yes, depending on the health insurance plan and the law governing it.
A health insurer that paid medical expenses related to the accident may assert a right of reimbursement or subrogation against the personal injury settlement. Your attorney should review the actual plan documents and plan language before accepting the amount demanded.
Different rules may apply to different insurance arrangements, particularly employer-sponsored plans governed by federal law. For that reason, private insurers’ reimbursement claims should be reviewed individually rather than treated as ordinary hospital liens.
What Are Letters of Protection?
Some injured people receive medical care from medical providers who agree to postpone payment until the personal injury case concludes. This arrangement is often documented through a letter of protection.
The healthcare provider may agree to continue treatment with the expectation that unpaid bills will be addressed from an eventual injury settlement.
A letter of protection is not the same as a statutory Tennessee hospital lien, TennCare subrogation interest, or Medicare recovery claim. The patient’s obligations depend on the agreement and circumstances of the case.
Can Healthcare Provider Liens Be Negotiated Down?
Some medical liens and reimbursement claims can be reduced, although a lien reduction is never automatic.
The available negotiation strategy depends on the type of medical lien, applicable law, contractual rights, settlement amount, attorney fees, medical expenses, and circumstances of the personal injury case.
Medical providers may sometimes agree to accept less than the outstanding balance. Other claims are governed by statutes or federal reimbursement procedures that provide their own methods for calculating or challenging the final amount.
Therefore, effective lien negotiations begin by determining what type of claim exists and what legal rules govern it.
When Should Lien Negotiations Begin?
Early identification is usually preferable to discovering outstanding liens after a case settles.
A personal injury attorney can identify potential lienholders while the claim is pending, request relevant records and plan documents, verify lien amounts, and determine what additional information will be needed once the settlement amount becomes known.
What Happens When There Are Multiple Liens?
Multiple liens can substantially reduce the client’s final amount.
Suppose a car accident victim has unpaid hospital treatment, Medicare conditional payments, and a private insurer seeking repayment. Each claim may involve a different legal right, priority, or method for determining the amount due. Their lawyer should identify the outstanding liens, determine whether each is enforceable, review treatment related to the accident, challenge unrelated charges, and pursue appropriate reductions before calculating net recovery.
These issues can become especially important in a personal injury case with limited insurance coverage and extensive medical care, because the total claimed obligations may consume much of the settlement.
What Is Net Recovery After Medical Liens?
Net recovery is the amount the client ultimately receives after applicable deductions from the settlement funds.
Depending on the case, deductions may include:
- attorney fees;
- case expenses;
- valid medical liens or reimbursement claims; and
- other authorized payments connected to the claim.
A large medical lien can make the difference between a substantial gross settlement and a much smaller payment to the injured person. Therefore, negotiating liens where legally appropriate can increase the amount of compensation the client receives.
Can Medical Liens Delay Settlement Payment?
Yes. A case can settle before all reimbursement amounts are finalized.
When that happens, your attorney may need to determine or resolve outstanding liens before distributing affected settlement funds. As Medicare recovery issues, TennCare subrogation inquiries, disputed hospital liens, or incomplete billing records can all contribute to delays, it is best to address them before the case concludes.
How Can a Personal Injury Lawyer Handle Medical Liens?
An experienced personal injury attorney can evaluate the medical liens and reimbursement rights associated with a personal injury claim rather than simply paying every demand presented.
Depending on the case, your attorney may:
- identify which liens exist;
- determine whether statutory liens were properly perfected;
- request itemized statements and medical records;
- review health insurance plan documents;
- identify unrelated charges;
- verify Medicare conditional payments;
- determine whether TennCare has a subrogation interest;
- pursue available lien reductions;
- conduct lien negotiations; and
- calculate the client’s anticipated net recovery before final distribution.
Resolving medical liens correctly protects settlement funds while ensuring that valid legal obligations are addressed.
Free Consultation About Medical Liens in Personal Injury Cases
Medical liens in personal injury cases can have a major effect on what an injured person keeps after a settlement. Hospital liens, private insurance claims, Medicare recovery claims, TennCare interests, and provider balances each require a different analysis, and the amount initially demanded is not necessarily the final amount that must be paid.
Grissim & Waterman represents injured people throughout Tennessee. If you have further questions about a medical lien, unpaid bills, or how reimbursement claims could affect your personal injury settlement, we can review your claim, identify outstanding liens, and determine what can be done to protect your net recovery. Call 615-255-9999 to book a free consultation with an experienced personal injury attorney in Nashville.
