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Personal Injury Settlement Liens

Personal Injury Settlemen…

On average, a personal injury claim can run for a year or more, but when the outcome to the plaintiff is favorable by a settlement agreement or jury or judge award, it all feels worth it. However, an unknown aspect may come to light once the award has been made or settlement has been agreed upon. This is often the issue of liens to be paid. This article will discuss who may have a lien on a personal injury settlement.

According to the Cornell Law School Legal Information Institute [Lien | Wex | US Law | LII / Legal Information Institute (cornell.edu)], a lien is defined as “a security interest or legal right acquired in one’s property by a creditor. A lien generally stays in effect until the underlying obligation to the creditor is satisfied”. Generally, a lien is a court order placed on a party’s personal property to satisfy a debt owed to another. Regarding a settlement, the personal property is the settlement award. However, this is restricted to what is owed to the lienholder. 

The Alaska Statutes provide hospitals, physicians, and nurses with a lien upon any sum awarded to the person if services were furnished to them. Below are some of the parties who may have a lien on a personal injury settlement:

  • Healthcare providers - the most common lien holders in personal injury settlements are healthcare providers. In many cases, especially in Wasilla car accident, the injured party may not have health insurance or health insurance may not cover the medical bills that result from their injuries. As a result, the healthcare providers seek to recover all the medical bills by way of the settlement lien. However, there are circumstances where an injured person may only be able to repay a partial lien; this may be when the injured person has no insurance at all. It must be noted that liens can be made by way of prior agreement, where the injured person signs an agreement with the healthcare provider while receiving treatment or medical care. 
  • Health insurance carriers - the personal injury settlement liens may be inside the health insurance plans of specific employers. As a result, the plans give the right to have a medical lien on an injured person’s settlement. Most valid liens include government employer insurance plans, workman’s compensation, etc. 
  • Automobile insurance carriers - Some car insurance plans allow insurance companies to be entitled to reimbursement from a settlement payment for services that exceed $5000. 
  • Medicaid and Medicare - Applicants for Medicaid must give their rights to payments for medical care from a third party to the state. So even if the injured party does not pursue a claim, the state has the power to pursue the claim. In cases where Medicaid has paid the medical bills, the state is legally required to be delivered from whatever compensation is awarded in the case and will thus impose a lien on the settlement. First, however, it has to be clear that the medical liens apply to Medicaid payments linked to the injury. 

For more information on liens on a personal injury, settlement speak to your personal injury attorney. 


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