Health Insurance and Medical Liens

March 10, 2021
Health Insurance and Medical Liens

It is a basic aspect of personal injury law that if a business or individual causes harm to somebody, that business or individual should, at a minimum, be responsible for payment of all medical bills resulting from the injury. It is therefore, no wonder that medication in a case of personal injury is a prevalent category of damages.


Medical bills, on the other hand, may pose some important questions. What if the injured person's medical bills have already been covered by a health insurance company? Is it still possible for the claimant to sue the responsible party for the amount of the medical bills?' If that's the case, wouldn't the claimant be having a 'windfall’? But shouldn't the responsible party be held accountable for the damage they cause? Let's take a deeper look at how health insurance works in a personal injury case, as well as medical liens.


Is it possible to sue the at-fault party for medical expenses covered by health insurance?

In brief, yes, but the claimant is unlikely to obtain the full amount expected to cover the claimant's medical expenses. Consider the case of Jeff, a fictional construction worker who is injured at work when he is hit by an earth-mover driven by a coworker. Jim goes to the hospital because he has health insurance. Along with a number of minor injuries, Jeff's right shoulder is severely damaged, needed surgery. Over the course of months, the surgeons conduct the surgery, and Jeff regularly visits a physiotherapist to strengthen his shoulder. Jeff's health insurance covers all of his medical treatment related to the accident, which totals $24,000 after deductibles.


Jeff hires a lawyer and files a case against the construction firm. Jeff's health insurance company will file a lien against the suit.


What Are Medical Liens and How Do They Work?

In simple language, a medical lien is a payment request that may be placed against a personal injury claim. From the above example by placing a lien, Jeff's health insurance provider argues, "Jeff is the person who was injured and it’s his privilege to sue. But Jeff did not pay for the medical treatment he got on his shoulder. We did it. So, if he is reimbursed for the medical treatment he rendered, the money should be sent to us rather than directly to him.”


When a lien is issued by a health insurance company to recover any money it has spent on your medical care after an accident, you (or your lawyer) will have to pay for the lien under a process known as subrogation.

What are Hospital Liens?

In certain states, hospitals have the right to file a lien to recover any costs associated with the treatment of a patient who has been involved in an accident. Some medical practitioners can request that you sign a lien letter agreeing to a lien against any personal injury settlement. In order to be valid, medical provider liens must normally obey a specific legislative policy.


Government Liens

When the government pays any portion of your medical care after an accident, it is usually entitled to reimbursement if you later get your money from another party for your injuries according to the specific type of government program like Medicare and Medicaid Liens, Veteran's Administration, etc.

How to Negotiate and Release a Lien?

It is entirely possible to convince a medical lien holder to accept less than the sum they paid in return for the lien being released. Inquire with your counsel about the possibility of reducing the lienholder's claim.


If you would like to more about health insurance and medical liens, please contact the Personal Injury Attorney in New Haven, CT


All people are equal before the law. A good attorney.