After an accident, the injured victim will seek medical treatment. Emergency care, medical imaging, and surgeries can cost a lot. When health insurance is available, these expenses will be covered by the health insurance company. This creates a lien, which is a legal right that a creditor has in another’s settlement until that debt is satisfied. The lien is created for the expenses provided for the medical treatment to the injured victim and is attached to the settlement or judgment.
Liens are formed in three ways. First, they can be made by contracts as treatment is sought with a medical provider. These are agreement made to pay the medical provider from the settlement funds. Second, liens are created through statutes. For example, California Civil Code § 3045.1 places a statutory lien for any emergency care rendered by a hospital. Private health insurance companies, on the other hand, are contractual. Within the policy, the insurance companies have a contractual subrogation right for reimbursement for all payments made towards medical treatment where a third party is at-fault and there is a recovery from the third-party.
Although there may be a lien on a settlement or judgment, these liens can be reduced. Some examples of reduction are for costs, attorney fees, or public policy, such as the made whole doctrine which limits the lien claimant’s reimbursement where the injured victim has not fully recovered by the third-party settlement or judgment. Other policies such as the common fund doctrine limits an insurance company’s ability to recover funds from the injured victim’s settlement or judgment by implemented a pro-rated share of the fees and costs among the lien claimants. The doctrine is incorporated into insurance contracts. Though, insurance policies covered by the Employee Retirement Income Security Act (ERISA) are not provided discounts for attorney fees.
Other reductions can be made for unrelated charges, unreasonable charges, reduction for comparative fault, apportionment for claimants, and deductions for our-of-pocket payments.
In short, regardless if the claim is reported to the health insurance company, there is a contractual duty by the victim to repay the amount paid by the health insurance company.
Consult with a Car Accident attorney
Dealing with private health insurance liens can be tricky. But there are many tactics in reducing the total lien amount. Work zealously and diligently in negotiating the final lien amount early on in the case to ensure maximum recovery. Lawyers are not experts in math, but they are experts in the law. An attorney should be consulted.
Do not wait, never hesitate, and reach out to a professional attorney who is ready to work for you.
Location: Los Angeles, CA 91403
Consultation: Free - 60 minutes
Tel: (310) 363-0551
Email: jonathan [ at ] ellisbakh.com
Jonathan Bakhsheshian , Esq.
is an associate attorney at Ellis & Bakh, LLP where he specializes in wrongful death and catastrophic injury litigation.
He obtained his Bachelor of Arts in Philosophy at the University of California, Los Angeles and earned his Juris Doctorate from Pepperdine University School of Law. At Pepperdine, Jonathan was the Lead Articles Editor of the Pepperdine Dispute Resolution Law Journal and a lead member of the negotiations and mediations Team. He competed in several nationwide and international negotiation and mediation competitions. Jonathan continued his studies at the number one, nationally-ranked Straus Institute for Dispute Resolution and obtained his Masters in Dispute Resolution.
In addition to his classroom training, Jonathan externed for the United States District Court, Central District of California; United States Attorney’s Office, Department of Justice; Honorable Judge Robert Kwan, Bankruptcy Judge of the United States Bankruptcy Court for the Central District of California; Los Angeles Superior Court; and for the Los Angeles District Attorney’s Office.
Jonathan is dedicated to the principal and philosophy that every injured victim is entitled to the best representation, regardless of their personal financial status or complexity of their case. Jonathan prides himself on being a tough, creative, and fair legal advocate for all of his clients.
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