Liens play a big role in many Massachusetts personal injury cases. They’re legal claims against the funds that you may recover in a personal injury settlement, often made by third parties, such as healthcare providers and health insurance companies, that have paid for your treatment related to the injury. If your personal injury case has a lien, you’ll be responsible for sharing a portion of the settlement or judgment with the lienholder.
In some cases, liens can be disproportionately high, potentially leaving you with little to no compensation. That’s where lien reductions come in. With help from a skilled personal injury attorney, you may be able to reduce the lien amount and retain more of your compensation.
If you’re filing a personal injury case with a lien or suspect a lienholder may place one on your settlement, it’s important to understand the workings of these legal claims and how you may reduce them. Our knowledgeable personal injury lawyers at the Fogelman Law Firm can help you understand your options and work toward retaining as much of your compensation as possible.
What is a Lien in a Personal Injury Case?
When someone is injured and incurs medical expenses, those bills are often paid by health insurance providers, state or federal benefit programs like Medicaid or Medicare, or sometimes directly by the injured party themselves.
However, when the victim receives a settlement or judgment in a personal injury case, the parties that initially covered those costs have a legal right to be reimbursed. This reimbursement is secured through a lien.
For example, suppose a person is injured in a car accident and needs emergency medical care. When all is said and done, their medical costs come out to $50,000. Their health insurance provider pays that amount through their policy, covering most of those bills, usually minus copays and deductibles. Since the victim’s insurance paid for the medical treatment, they have a lien on any settlement or award that person may receive from the at-fault party.
So, when the settlement comes through, the insurer is entitled to recover the amount it paid on behalf of the injured person from the settlement. If the person were to fail to satisfy those liens, they could face legal consequences, including the possibility of litigation.
Types of Liens in Personal Injury Cases in Massachusetts
Multiple types of liens can arise from a Massachusetts personal injury case. The most common types include:
Health Insurance Liens
Medical liens in personal injury settlements are common. Health insurers often have a contractual right to reimbursement, which is called “subrogation.” This lien allows the insurer to recover the medical treatment costs that it covers for the injured party.
Medicare and Medicaid Liens
Government programs, such as Medicare and Medicaid, are also entitled to reimbursement through personal injury settlements or judgments. Under federal law, Medicare must be repaid when it covers medical expenses related to an injury, and the same is true for Medicaid, although it may fall under both state and federal regulations.
Workers’ Compensation Liens
If your injury happens at work and you receive workers’ compensation benefits, the workers’ compensation insurer may assert a lien on any third-party personal injury recovery. For example, suppose an employee on a construction site is injured due to a third-party contractor’s negligence. In this case, the workers’ compensation provider may seek reimbursement from the settlement or judgment.
Hospital and Provider Liens
In some instances, hospitals and healthcare providers may place liens directly on a settlement for unpaid medical bills. Massachusetts law allows medical providers to file a lien against personal injury settlements to recover costs associated with treatment provided to the injured party. If the hospital or healthcare provider takes this route, they must give proper notice as required by law.
Liens Reductions and Negotiations
While legal consequences can arise if you don’t address a lien on your personal injury settlement, liens aren’t always set in stone. Under Massachusetts law, there is a possibility of lien reductions, especially when the total amount of the lien would consume a disproportionate share of your recovery.
Oftentimes, personal injury lawyers will handle this part of the process, too. If there’s a lien on your settlement or judgment, your attorney may negotiate with lienholders to reduce the lien amounts. This can help ensure you receive a fair portion of the settlement after you pay your medical expenses.
Factors That Influence Lien Reductions
Multiple factors play a role in Massachusetts personal injury lien reductions, including:
Proportionality and the “Made Whole” Doctrine
Under the “made whole” doctrine, an injured party shouldn’t be required to fully repay a lien if it would leave them with little to no compensation for their injury. While this doctrine isn’t applied universally in all cases, it can be a helpful tool in negotiating lien reductions.
Legal Fees and Costs
When a lienholder recovers part of a settlement in a Massachusetts personal injury case, they may be required to share in the legal fees and costs incurred by the victim to obtain the settlement.
For example, let’s say a lienholder demands $10,000 from a $50,000 settlement. If the victim’s attorney charges a 33% contingency fee, the lienholder could be asked to reduce their claim by their share of the legal fees (33%), effectively lowering the lien to $6,700.
Hardship and Equitable Reductions
In cases when paying the full lien amount would cause financial hardship to the injured party, lienholders may agree to reduce the lien. Hospitals, healthcare providers, and even government agencies may be persuaded to accept a lower amount, especially when the victim’s recovery is modest or their future financial outlook is dire.
Negotiating with Private Insurers
Healthcare insurance companies and other private entities often have more flexibility when it comes to negotiating liens. With help from a skilled attorney, you may be able to secure a significant reduction through negotiation. This is often more doable when the insurer has limited prospects of full recovery or when the settlement amount is relatively small compared to the total damages.
How to Reduce Liens in Personal Injury Settlements
If you’re filing a personal injury case with a lien or suspect a lien will be placed on it, there are specific steps to follow. A skilled personal injury attorney can help you navigate lien reduction for personal injury cases in Massachusetts, which may include:
- Identifying all liens early: It’s crucial to identify all potential lienholders early in a personal injury case. Your attorney can help you do this by reviewing medical bills, insurance coverage, and governmental benefits to determine which entities might have a right to a lien.
- Notifying lienholders: When your case is settled, you must notify lienholders. If you don’t, you could run into complications, including the possibility of legal action to enforce the lien after the settlement is distributed.
- Negotiating the lien amount: Lienholders are often willing to accept a reduced amount, especially when there’s a reasonable argument that the full lien would leave you without adequate compensation. So, your attorney can negotiate with the lienholder to attempt to lower the amount.
- Documenting all agreements: If and when a lienholder agrees to a reduction, it’s important to document that agreement in writing. This helps ensure clarity about the amount to be paid from the settlement and avoids future disputes.
Get Personalized Assistance With Your Personal Injury Case and Lien Negotiations
Liens are an important aspect of many personal injury cases in Massachusetts. If your personal injury case has a lien, it can greatly impact the final settlement amount you may receive. However, given that these liens are often negotiable, help from an experienced personal injury attorney is a must-have. Your attorney can help you work toward reducing that lien to ensure you retain a fair portion of your compensation.
If you need help with your personal injury case or negotiating associated liens, our experienced team at the Fogelman Law Firm is here to help. Contact us today at (617) 559-1530 or complete our online contact form.
