You’ve been involved in an accident. You’ve paid premiums that generated profits for an insurance company and its executives but now the carrier wants more from you. Here is what you need to know about medical lien claims, a system of legally approved clawbacks from your recovery in your personal injury case.
Health insurance policies are entitled to claw back payments for medical care from the person who caused injury. By law, these claimants against your recovery get a free ride on your attorneys’ fees and case costs. You pay; they don’t. Medicare and Medi-Cal, on the other hand, recognized the cost of the effort to obtain settlements. Medicare bears a full and fair share; Medi-Cal bears a lesser share of the charges.
Medical insurance liens, by definition, are specious because they’re fabricated amounts that don’t fully resemble the insurance company’s financial position in your case. Although a sum was paid in reimbursement, you’re never told what side deals the insurance company made with the hospital or medical conglomerate providing services. Suffice to say, the numbers generated by the carrier benefit the carrier.
Remember that the lien collection companies pay their employees a commission for collecting from you. They have monthly, quarterly, semi-annual and annual quotas that must be met and bonuses for exceeding the quotas. You’ll get a better lien reduction at the end of a month or quarter when the collection agents need to meet collection goals or move their winnings to a higher level. Simply being a tough negotiator and dragging out a “We’re not paying” position can get a better deal. Results differ in every case but fighting for the best result is worth the effort.
California law allows you to recover damages, reduced by the percentage of your own fault in causing your injuries. Reimbursement claimants stand in the shoes of the plaintiff and in cases of comparative fault that means reducing the lien by the same percentage as you. For example, the Made Whole Doctrine limits a lienor’s rights when the plaintiff gets a disproportionately small recovery. This might be $100,000 in medical care, substantial past wage loss, or loss of earning power. It could also be permanent disability and pain and suffering but the defendant only has a $50,000 policy and financially cannot contribute to a final settlement. The concept holds that clawback rights do not exist until the victim has been fully compensated for their losses and supports the plaintiff’s demand for a full waiver.
Normally Medicare’s liens are surprisingly reasonable and the rule of thumb is that they are approximately 20% of the full retail charge. Many clients are frightened by a huge retail medical bill after surgery and weeks of hospitalization, only to learn that the Medicare lien is much less. Medicare does a good job of negotiating payments to hospital and doctors and gets fair and reasonable rates.If any of this information goes over your head, you’re not alone. The medical liens process, the insurance industry, and systems are set up in their favor. That’s why the mission of the Alexander Law Group is helping those navigate and make better, informed decisions when they’re in need.
We’re always here to answer your questions and we never charge for doing so, and only get paid when we collect for our clients. Contact us today for a free consultation.