This is a general guide to responsibility for repaying medical liens out of a personal injury recovery. Most clients do not realize that most HMO's and PPO's will pay their medical bills but later ask to be reimbursed from the clients auto accident settlement.
This will set out some general rules.
1
Find out What Entity Paid Your Medical Bills
There are many possible sources to pay medical biils. Amongst them are the client's own med-pay insurance on their auto policy, a health insurance policy thru work also known as an ERISA plan, a self paid health insurance plan, Medicaid or Medicare, or CHAMPUS or the V.A. Occasionally, cleints will sign a medical lien with a Dr. or chiropractor.
Although it is not well known, many times insurers have boilerplate language in their health insurance policies that gives them the right to reimbursement if they pay your accident bills and then you recover from a third party.
Medicare, Medicaid and CHAMPUS may demand reimbursement based on a Federal Statute.
Look at the bills they paid and make sure they are accident related. Many times insurers ask for reimbursement for bills totally unrelated to your accident.
2
Ask Why They Feel Entitled to Money Back and Consult with an Attorney
In every case, if an entity requests reimbursement, you should ask them to point out to you the language in the insurance policy or public statute that gives them that right. Get a copy of the policy or statute and read it.
Lien law is very complicated and new legal cases can change it almost daily.
An attorney experienced in lien law may well find ways to reduce or eliminate the lien asserted even if the face of language in an insurance policy or statute that gives the entity the right to recover. In many cases, an attorney may even eliminate the lien entirely.
This can be very valuable. Lets say you have a case that settles for 100K, the attorney fees are 33K and there are medical bills of 200K . An attorney can often perform a valuable service by reducing the lien drastically or eliminating it altogether. If he gets the insurer to waive it, you would clear 66K or so on a case where the lien would otherwise consume the entire recovery.
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