So, your New York personal injury lawyer is on the verge of settling your case. Finally, many months or even years after your accident, you are going to get some compensation for your injuries, your lost income, your permanent disabilities, etc., etc., etc. You know what I mean. This has been the worst thing to ever happen to you. Now you see the light at the end of the tunnel.
But wait. Your personal injury lawyer says there is one more stumbling block to a successful resolution of your case: “Liens”. He says he has got to investigate the “liens” on your case. What is that? How can it affect your settlement?
First, if you are only hearing about “liens” at the end of your case, your lawyer has not done a very good job of keeping you informed. He or she should have told you about that little problem – and yes it is a problem – long ago. Better late than never!
So what is a “lien” on a personal injury case? Let me use an analogy: You are about to enjoy a lovely meal you have been cooking all day for you and your spouse. You prepared just enough for two. As you sit down to enjoy the fruits of your labor, there is a knock on the door. You open. The man at the door says, “is dinner ready”? You respond, “but we did not invite you”! He responds, “no invitation required”.
Yes, a lien is like an uninvited dinner guest. Just as you are about to settle your case and enjoy the fruits of your attorney’s hard efforts, perhaps after months or even years of “discovery”, including depositions, and maybe part of a trial, the “lienholder” comes along and demands his fair share of the settlement. What are the lienholder’s rights? What are yours?
It depends. There are several kinds of liens: Health insurance liens, workers’ compensation liens, Medicare liens, Medicaid liens, and others. But they all have one thing in common: The lienholder has a legal right to claim part of your settlement, and if your lawyer does not accommodate them, he and you both can end up owing not only the lien amount, but penalties and interest for failing to honor the lien.
Your lawyer’s job (among other things) is to thoroughly research any liens that might exist against your settlement. Some would-be lienholders claim “liens” that are not enforceable. Your attorney should send those lienholders to hell. Some lienholders claim more than they are entitled to. Your attorney should put them in their place. Finally, most liens are negotiable. Your lawyer should try to negotiate the lien down to the lowest possible amount.
Here’s how the most common kinds of liens work:
Workers’ Compensation Lien: If you were hurt on the job, the workers’ compensation insurer who paid your medical bills and lost income has an absolute right to a lien against your settlement. But they have a right generally to recover only about 2/3 (sometimes less) of the money they spent on you. If your settlement is relatively small compared to the lien, your lawyer should be able to negotiate a further lien reduction.
Private Health Insurance Lien: If a private health insurer paid your medical bills related to the accident, they might claim a lien, but they won’t actually have a right to one unless they are a “self-funded ERISA” policy. Your lawyer needs to investigate this. Some insurers will CLAIM they are self-funded ERISA policies, but if your lawyer does a little digging, he will find out they are not.
Medicaid Lien: If Medicaid paid your medical bills, they have a lien, but it can be negotiated or, if Medicaid refuses to reduce it, you can challenge them in court. They are entitled to repayment only to the extent of a ratio based on the actual settlement versus the total value of the claim including the pain and suffering. So, for example, if they claim a $100,000 lien for medical payments on a claim that settled for only $100,0000 (because of liability issues) and your pain and suffering is valued at $300,000, then they are entitled to only about ¼ of their full lien, or $25,000. And in any event, your lawyer should always be able to get Medicaid to reduce its lien by at least 1/3.
Medicare Lien: A Medicare lien is a harder nut to crack than a Medicaid lien. They do not have to negotiate with you at all. They can insist on full payment of every last dime they paid for your treatment related to the accident. BUT they often claim money for treatment that had nothing to do with the accident. Your lawyer needs to review carefully the medical bill payments they claim they made and ensure that they are all for treatment related to the accident.
Well, those are the main types of liens. As you can tell, liens involve complex legal issues, and require your personal injury attorney to engage in smart negotiating, and if necessary, bring on legal challenges. That’s why you need to have a TOP NY personal injury lawyer for all that. Hey, I happen to know one . . . The publication Best Lawyers in America named me “Personal Injury Lawyer of the Year” for the Syracuse metropolitan area this year. Just saying . . . .
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Syracuse NY Personal Injury Lawyers
Michaels & Smolak, P.C.