In a personal injury case, a “lien” gives an entity the right to a specific portion of a plaintiff’s settlement. A debt may sometimes be owed by the plaintiff to an entity, such as Medicaid, for benefits paid on behalf of the plaintiff. For personal injury attorneys, it’s imperative to investigate any potential outstanding liens placed on their clients. Lien claimants will recuperate the debt owed by the plaintiff for said services out of their final settlement. Generally, health insurers, Medicare and Medicaid require that their insured report any personal injury claims. Some personal injury attorneys will choose to let their clients handle the act of reporting on their own. Agencies that require reporting often program their computer systems to flag any payments made for medical treatment and may reach out to injury victims to ask if they have a personal injury claim. If they failed to report to said agencies, they risk losing their insurance. Practical personal injury attorneys will protect their clients by reporting their claims to these agencies.
In New York, liens may belong to physicians, Medicare and Medicaid agencies, certain disability policies, additional No-Fault benefits such as APIP or OBEL, workers’ compensation coverage, and private health insurance in certain instances. If a client’s health insurance does not cover their medical treatment, their physician may still treat them so long as they sign a lien, which gives the physician the right to recuperate the costs of their services from their settlement. This is a simple example of how liens work.
Personal injury attorneys have an obligation to investigate whether or not their clients have liens placed on them. If clients aren’t made aware of the liens placed on them and how they will affect their final settlement (especially before they accept a settlement offer), they’ll most definitely be confused and likely angry that they aren’t getting their full settlement check. A prudent personal injury attorney will calculate the amount their client owes in liens and fight for that additional amount. They can also negotiate with a lien claimant. Since lien claimants want compensation for their services, informing them that you will not take the case (unless they negotiate) can sometimes be a solid way to have them reduce debt owed. It’s also a good idea to keep in touch with lien claimants throughout the process of a personal injury case, giving them an idea of how the adjuster may be assessing the value of the case. The lien claimant may be much more willing to negotiate if they are kept in the loop.
Liens can become complicated in personal injury matters. It’s not recommended that victims of personal injury handle their own liens or try to get away without reporting to those agencies that require it.