Manhattan NY Injury Lawyer Explains Liens on Personal Injury Case Settlements
June 24, 2024 by Cornelius Redmond, Esq.
Consider your New York personal injury lawyer is on the verge of settling your case. After months or even years of dealing with your accident, you’re finally about to receive compensation for your injuries, lost income, and any permanent disabilities. This has been a difficult journey, but now there’s light at the end of the tunnel.
But hold on—your lawyer mentions one more hurdle: “liens.” They need to investigate the “liens” on your case. What are these liens, and how might they affect your settlement?
First off, if you’re only now hearing about “liens,” your lawyer hasn’t kept you well-informed. This issue should have been discussed much earlier, but better late than never.
So, what exactly is a “lien” in a personal injury case? Think of it this way: you’ve spent all day cooking a lovely meal for you and your spouse, with just enough food for two. Just as you sit down to eat, there’s a knock at the door. A man stands there and says, “Is dinner ready?” You respond, “But we didn’t invite you!” He replies, “No invitation needed.”
A lien is like this uninvited dinner guest. Just as you’re about to settle your case and enjoy the results of your lawyer’s hard work, a “lienholder” shows up demanding a share of the settlement. What rights does this lienholder have, and what are yours?
It varies. There are several types of liens: health insurance liens, workers’ compensation liens, Medicare liens, Medicaid liens, and others. They all share one thing: the lienholder has a legal right to claim part of your settlement. If your lawyer doesn’t address these liens, you both could owe not only the lien amount but also penalties and interest for not honoring the lien.
Your lawyer’s job includes thoroughly researching any liens on your settlement. Some lienholders claim “liens” that aren’t enforceable—your lawyer should dismiss those. Others claim more than they’re entitled to—your lawyer should challenge these claims. Most liens are negotiable, and your lawyer should aim to reduce them as much as possible.
Here’s a rundown of the most common types of liens:
Workers’ Compensation Lien: If you were injured on the job, the workers’ compensation insurer who paid your medical bills and lost income has a right to a lien on your settlement. However, they typically can only recover about two-thirds (or sometimes less) of what they spent on you. If your settlement is relatively small compared to the lien, your lawyer should negotiate a further reduction.
Private Health Insurance Lien: If a private health insurer paid your medical bills, they might claim a lien, but they’re only entitled to one if they are a “self-funded ERISA” policy. Your lawyer needs to investigate this, as some insurers might falsely claim to be self-funded ERISA policies.
Medicaid Lien: If Medicaid paid your medical bills, they have a lien, but it can often be negotiated. If Medicaid refuses to reduce it, you can challenge them in court. They are only entitled to repayment proportionate to the settlement compared to the total value of the claim, including pain and suffering. For instance, if they claim a $100,000 lien for medical payments on a claim that settled for $100,000 but your pain and suffering is valued at $300,000, they are entitled to only about a quarter of their full lien, or $25,000. Your lawyer should always be able to reduce a Medicaid lien by at least one-third.
Medicare Lien: Medicare liens are tougher to negotiate than Medicaid liens. Medicare can insist on full repayment of every cent they paid for your accident-related treatment. However, they often claim payments for treatments unrelated to the accident. Your lawyer needs to scrutinize the medical bill payments to ensure they are all for accident-related treatment.
These are the main types of liens. As you can see, handling liens involves complex legal issues and requires skillful negotiation and legal challenges. That’s why you need a top-notch New York personal injury lawyer. Incidentally, I was named “Personal Injury Lawyer of the Year” for the Syracuse metropolitan area by Best Lawyers in America this year. Just saying…
If you or your loved one has been injured due to someone else’s negligence, feel free to call me anytime for a free consultation.
