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The Role of a Medical Lien in California Personal Injury Cases

Medical liens in personal injury cases.
A medical lien in a personal injury case is when a health provider treats a patient at a reduced rate or without charging upfront, but retains the right to get paid directly from the settlement or award that a plaintiff receives. The biggest advantage of a medical lien is that injured victims have the ability to receive the treatment they need right away without worrying about the cost or how they might pay for the treatment.

What is a Medical Lien?

Medical providers typically grant a medical lien when an individual has been injured in an accident but does not have health insurance or cannot afford the medical treatment and care they need. It is also important to note that not all doctors, hospitals, or therapists are willing to work with a medical lien in California because of the possibility that a personal injury case may not be successful. Medical liens are best avoided unless you have no other way of getting the treatment you need right away. Lien agreements are negotiable, but they are binding contracts. That means having your injury lawyer review it before you sign or agree to anything is important. Another critical point to bear in mind is if you do not recover compensation that can cover your doctor’s costs, the doctor or medical provider can exercise the lien against you. If you are unsure if a medical lien is the way to go for you, contact an experienced California personal injury lawyer who can help you understand whether you should use a medical lien in your particular case.

Will All Doctors Accept a Medical Lien in California?

Not all doctors or medical providers may be willing to work with a medical lien. When they do, it means that they are extending you credit for medical services, and you need to pay them back. Medical providers will only work on a lien basis if they believe you will win your case and secure compensation. In such cases, it may help to have a lawyer who can assure a medical provider that your case is winnable. Your lawyer will be able to inform the medical provider that someone else’s negligence or wrongdoing caused your injury. If your case involves strict liability, convincing a medical provider to work on a lien basis might be easier. For example, if you were injured in a dog attack, dog owners can be held liable for damages with a strict liability statute, which states that owners of dogs must be held financially responsible for injuries and damages their pets cause.

How Do Medical Liens Work in California?

When a medical provider agrees to treat you on a lien basis, the first step for you is to sign a lien agreement. This is a legally binding contract. Once you sign the contract, the medical provider will “perfect” the lien by sending a notice to the insurer and other involved parties. This allows the insurance company or the other party to pay the medical provider directly from a settlement or jury award before you receive the compensation amount. California law also allows for “statutory liens,” under which hospitals are allowed to place medical liens against the at-fault parties. In this manner, the injured victims can receive emergency care services. For a statutory medical lien to be placed, medical providers must provide written notice of the charges to the at-fault party. After you receive compensation for your medical expenses, the medical provider will have one year to recover their costs. If the plaintiff is under Medi-Cal, California’s Medicaid program, the California Department of Health Care Services (DHCS), which administers the program,  can sue the at-fault parties on the plaintiff’s behalf and even assert its lien on your monetary recovery.

Should You Opt for a Medical Lien?

Typically, you should use a medical lien only when there is no other way for you to get treatment if you do not have health insurance or cannot pay your deductibles. The main advantage of health insurance is that in-network medical providers cannot charge you more than what has been agreed upon in their contract. If you have a good health insurance plan, the payments would often be lower than those you would likely owe under a lien. One common misconception is that higher medical bills might get you a bigger personal injury settlement. However, it is important to note settlements and awards are based on the value of the medical services provided and not on the amount you pay. Because you are eventually liable to pay for the medical services you received, getting a medical lien should be your last resort. If you are unsuccessful with your lawsuit and cannot pay the lien, your doctor or medical provider could sue you. If this happens, an experienced California personal injury lawyer can negotiate with the medical provider to reduce the lien amount on your behalf, even if they were not involved in the lien agreement. Under California law, the statute of limitations for medical liens is typically four years after the failure to pay. However, if your agreement specifies that you are holding settlement money in trust for the medical provider if you fail to pay, there is no statute of limitations, and your medical provider can file a lawsuit against you at any time.

Should You Retain a Lawyer to Negotiate Your Lien Agreement?

Retaining the services of an experienced and knowledgeable California personal injury lawyer to negotiate your lien agreement would be in your best interest because a contractual medical lien is legally binding. It typically grants medical providers the right to be paid before others once they are awarded a settlement or judgment. They also have the right to recover additional amounts from you and the right to have disputes resolved via arbitration than a jury. In many cases, lien agreements provide substantial advantages to the medical provider. Having a resourceful lawyer on your side to negotiate and help draft the lien agreement could result in a far better outcome for you, not just financially but also in terms of getting the treatment you need to recover from your injuries. If you have suffered any injury and believe you may have a legal case, contact Bisnar Chase for more information before entering into a medical lien agreement.

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California Personal Injury Blog