A lien is a legal claim against some property of another person, generally a settlement or damages award for a personal injury case, and a medical lien is a lien made in connection with unpaid medical bills. For example, person A may have been injured in an automobile accident with person B, and sought medical treatment from Hospital X. If Hospital X is not paid for the medical services they provided, the will file a medical lien on any settlement or award person A might receive.
Medical liens are typically imposed when a medical service provider gives reasonable and necessary medical treatment to a patient and fails to be paid for that service. The filing of medical liens usually happens in conjunction with a personal injury case that gives rise to the need for the treatment, or shortly thereafter when it becomes clear that the provider will not be paid otherwise. In most instances, insurance companies are the ones against whom the lien is filed. It is unusual, but not unheard of, for a medical service provider to file a lien on an individual patient.
However, many medical providers prefer to go through some debt collection process instead of securing a medical lien. In most cases, medical lien matters will be put on the “back burner” during the related personal injury case, and determined once the case-in-chief is decided. Using the example from above, Hospital X will not be able to argue the case for their medical lien until the court decides that person B or their insurance provider is liable to person A, and in what amount.
The popular notion is that a medical lien will be paid in full, but this rarely happens. The end recovery is usually a percentage of the total lien amount, averaging around 60%. Different states determine how this amount is calculated, but the two most common ways are:
- Comparables: This is the result of comparing similar expenses for the same medical service in the same geographical area to determine what the average cost should be.
- Statute: Some states have specific statutes that outline, in detail, how to determine how much a medical service provider is entitled to through a medical lien. In most states, the amount is pegged in one way or another to what a Medicare recipient would receive for the same medical service.
If you are a medical service provider and have not received the payment you are entitled to for services you performed, or a medical lien has been placed on your claim, it is strongly recommended that you contact a qualified collection attorney. Only an attorney will be able to adequately explain the issues and assist in defending your rights.