A lien is a legal order put on the property of a person for satisfying the debt owed by the person to a third party. If you have received personal injury settlement, then there could be certain parties who could have a lien on this amount. Here are the possible candidates that can hold a lien over your settlement.
Health Insurance Providers
Liens on personal injury settlements could form part of the insurance plan, especially insurance plans for workers compensation that an employer has to take. In the plan there might be a clause asserting the lien on the settlement of the injured party. Such plans could include workman’s compensation, ERISA plans, and government plans for employee insurance.
In some instances, the victim will not have health insurance, or the particular plan may not cover the medical costs. In such cases, healthcare providers will have to recover their bills through liens on the settlement amount the victim receives, either through a court order or from the insurance company.
The lien can be made even through prior arrangement, where the injured party who does not have health insurance, or has a minimal insurance, will sign a consensual lien, with the healthcare provider, agreeing to repay the medical bills, out of the settlement amount awarded by the court, or through a settlement process. These agreements are often ambiguous or vaguely worded and therefore victims should consult their attorneys before signing them.
It is not uncommon for someone who has a fantastic attorney for that same attorney to try to confuse or persuade the victim to sign paper work that is not helpful to them. You should not sign anything you do not understand. You do not need to gamble in your life.
Medicare and Medicaid
A statutory lien is imposed by the federal government on Medicare payments. Medicare is not supposed to pay bills when the payments are expected from insurance plans or from workers compensation. Under Medicaid, even when the victim who is under Medicaid does not make a claim, the state can do so. If Medicaid has paid the medical bills of the victim, the state has to be reimbursed from the settlement, and it can impose a lien to recover such amount.