For instance, if the settlement with the at fault insurance carrier is 1000 and the med bill lien is 800, is the provider entitled to the full 800? It makes no sense that the attorney and client would share the remaining 200. Is the doctor only entitled to only 1/2 of the remaining amount after attorney fees?
I believe the formula to which you are referring is statutory liens created under Civil Code Section 3045.4; however, I do not believe it applies to voluntary liens.
I agree with the other answer so far in that a) you should talk to your attorney about this, b) not all liens are negotiable, but many are, and c) attorneys' fees are usually charges based on the gross recovery, not the amount recovered after medical charges.
For your information, below is Civil Code Section 3045.4:
"Any person, firm, or corporation, including, but not limited to, an insurance carrier, making any payment to the injured person, or to his or her attorney, heirs, or legal representative, for the injuries he or she sustained, after the receipt of the notice as provided by Section 3045.3, without paying to the association, corporation, public entity, or other institution or body maintaining the hospital the amount of its lien claimed in the notice, or so much thereof as can be satisfied out of 50 percent of the moneys due under any final judgment, compromise, or settlement agreement after paying any prior liens shall be liable to the person, partnership, association, corporation, public entity, or other institution or body maintaining the hospital for the amount of its lien claimed in the notice which the hospital was entitled to receive as payment for the medical care and services rendered to the injured person."
Each insurance company has its own way of working out liens. It also depends on California State law as well as the adjuster on the file. Discuss the numbers with the attorney. When dealing with injury cases and the law in general, one would think that fairness and common sense should always apply. You may be finding out that this is not always the case. Most personal injury attorneys are well versed in the manner in which liens are handled and resolved. Good luck with your case.
First, you are right. It doesn't make sense in your example that someone would ever agree to a settlement where $200 was split by the attorney and client. However, this is why most health care providers and lien holders will reduce their lien in order to help resolve the case.
Next, in terms of your specific question as to whether the provider is entitled to the full amount they paid, it depends on what type of lien holder they are; do they have an ERISA lien, a hospital lien, a statutory lien as with Medicare or Medicaid, or do they have some other form of lien or right to subrogation or reimbursement? There are different laws that govern different types of lien holders.
The bottom line is that your attorney should negotiate down any existing liens no matter their type or form to ensure that the settlement is fair to all involved, including you, the client.
Attached is a link to a YouTube video that I have created addressing liens and a link to my blog where I address lien issues and other questions injury victims may have.
Practically speaking, nearly all liens are negotiable. Some can even be completely extinguished. The complexity comes in the type of lien which is being claimed and whether the lien claimant is one who will likely pursue the lien by suing the injured person. You should consult with your attorney or a lien consultant if your attorney is not very knowledgeable in this area.
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