Many clients are surprised to learn that in cases involving personal injury caused by some other person, the government, medical insurance companies, hospitals and other healthcare providers can assert a claim against the financial recovery that is made in the case. The legal terminology describes this as either a “lien” on the recovery, a “right of subrogation,” or a “third party right of recovery.” However it is described, it is something that must be addressed in each case. Ignoring these claims can result in long-term legal trouble for the unwary. The liens and subrogation rights most often seen are these:
Government Liens, such as Medicare, Medicaid (called “AHCCCS” in Arizona) and the Veteran’s Administration. Federal and state statutes give these medical care providers a right of recovery from personal injury settlements. There are specific procedural requirements governed by laws and regulations that must be followed in order to properly address the claim being made and in order to minimize the amount that must be repaid out of any personal injury settlement.
Health Insurance Liens can arise from the health insurance contract, itself. Most health insurance policies contain provisions that require the covered person to pay back the health insurance company for payments made for health care related to the injuries sustained in an accident. However, not all claims by health insurance companies that rely on their insurance contract are valid under Arizona law and must be carefully scrutinized to determine their validity.
Hospital Liens are also very common in injury cases that involve hospital care, including emergency department care. By statute, a hospital (and other providers, as well) can assert a lien on a personal injury recovery for any amounts that are still due on the patient billing, even if the hospital/health provider has been paid by the victim’s health insurance company. Once again, there are very specific procedures that must be followed by the entity asserting this lien in order for it to be considered valid.
Worker’s Compensation Liens can occur if the victim is injured on the job and has received payment for care and/or lost wages through worker’s compensation insurance. The worker’s compensation carrier has a right to be paid back out of a personal injury recovery for all of the money it has spent.
A key role of the personal injury attorney representing a victim is to carefully scrutinize all lien claims, determine their validity and, if valid, negotiate with the lien holder for a reduction in the amount that must be repaid. Proper representation of a victim does not mean just maximizing the financial recovery made in the case. It also entails minimizing the victim’s obligations to pay back healthcare providers, thus resulting in the largest net recovery possible for the victim.
If you have questions about medical liens, subrogation or third party recovery claims, please give us a call or Contact Us online.