When a personal injury case settles, there are often claims to resolve with entities who assert that they have a lien, a right of subrogation, or a right to reimbursement from the settlement proceeds. Some of these claims may be enforceable; however, there may be viable defenses that may reduce or eliminate liens for others.
Frequent claims that we see here at ZipLiens are hospital liens. These liens arise when clients treat at a hospital for injuries related to their personal injury claim. Once treatment is complete and the case has settled- hospitals expect reimbursement via the settlement proceeds. If a client does not have health insurance, or if the client’s health insurance did not cover all of the treatment, hospitals attach their lien to the settlement proceeds.
Lien resolution serves as the conclusion to the outstanding hospital bills for the injured client. At ZipLiens, our goal is to try and reduce the liens as much as possible. The negotiations and subsequent reduction of the hospital lien put more money in the client’s pocket.
Hospital Liens Vary by State
If a client treats for an injury at a hospital and 1.) does not have health insurance to cover treatment and 2.) is unable to pay the hospital bill out of pocket, the hospital will assert a lien for the hospital to recover the costs associated with the client’s stay and care.
Hospital lien laws vary depending on the state. In some states, hospitals must perfect the lien by filing a notice with the local court. The hospitals must follow the requirements of the Hospital lien statutes of the state to have a perfected lien. If the hospital does not comply with the statutes, then their lien is not enforceable. This does not mean that the client is now not responsible for the bill; it only means that the hospital does not have a lien against the client’s settlement proceeds.
Hospital Liens v. Health Insurance
When asserting a lien, hospitals are hopeful that they will come away with more money from your injury case settlement. When hospitals bill health insurance, they receive a contractual rate that is much lower than the actual costs of the services provided. When hospitals don’t have an obligation to accept health insurance’s contractual rate, they will most likely try to recover the full amount of the original bill from the settlement proceeds.
At ZipLiens, we excel in getting hospitals to lower their billed charges by using the “reasonable cost of care” formula. With this formula, we present to the hospital what the billed charges were and then compare them to the actual cost of care of the services provided along with what a reasonable profit for those services would be by using the Hospital and Hospital Health Care Complex Cost Report (Form CMS-2552-96). Using the reasonableness report, ZipLiens can analyze the hospital bill and determine a fair payment amount for the lien. This often results in a significant discount of the hospital lien for the client.