Someone has caused you injury, and you need medical treatment. Let’s say you do not have health insurance, and you were transported to a hospital by ambulance; treated for traumatic injury in the emergency room which may include diagnostic testing, prescription medication, recommended follow ups, or even an overnight stay. You could be unconscious and really have no choice but to undergo this treatment, or even if you do have conscious awareness of your health insurance status and financial capabilities to pay for such treatment following an auto accident or horrific injury, you may find yourself throwing that financial awareness out, and recognizing that this medical assistance is a physical need, and again, you have no choice. Following the incident, you are billed thousands of dollars for that ambulance ride, and thousands more for the treatment received in the emergency room. You have no way to pay the bill, you are threatened by collections, and you still need follow up treatment that you cannot pay for. This was not your fault. Someone else put you in this situation. The doctors took it upon themselves, based on your condition, to do this work, but regardless, you must pay.
This is just one example of how a medical lien comes into play in these personal injury cases. Then there is the health insurance lien: one most people do not see coming. If you do have health insurance, and that ambulance, emergency room, and follow-up treatment is paid for, you may not get a bill, but rather a letter from your health insurance provider seeking information for “subrogation.” In essence, they want to be reimbursed for the payments they have made. You have a contract with this company: you pay premiums, and they pay for the medical treatment. So what is going on?
There are many types of medical liens, many of which you are obligated to pay, by law, regardless of how fair or unfair you may believe it is, and regardless of whether or not you were aware of this obligation. There are multiple state and federal laws that come into play, specific rules that must be followed. If you receive compensation from the wrongdoer, for these injuries you may find that hospitals, doctors, health insurance companies, the government, your employer, and possibly other entities all have their hands in the pot, claiming entitlement to your compensation money. How do you know they are actually entitled to a portion of your recovery? Did those entities follow procedure? What if there is no more money left, none for you, and still lien holders seeking reimbursement? What are your options when months following settlement or judgment on your case, someone tells you they are entitled to a portion of your recovery? Must you pay? Why wasn’t this included as part of your compensation and paid for by the wrongdoer? How do you know you are keeping track of the laws, the procedures, and all those hands that are legally in your pot? This is just one of many reasons you need an attorney for your personal injury case.
A lien is defined under California Civil Code Section 2872 as “a charged imposed in some mode other than by a transfer in trust upon a specific property by which it is made security for the performance of an act.” A medical lien is considered a “special lien” as defined under California Civil Code Section 2875 as “one which the holder thereof can enforce only as security for the performance of a particular act or obligation, and of such obligations as may be incidental thereto.” In other words, a medical lien in one held by a medical provider, or payor for medical services for treatment undergone as a result of an injury caused by another, a “third party” that can be enforced against your judgment or settlement in a personal injury claim against that third party.
TYPES OF MEDICAL LIENS
A hospital, and any connected treatment thereto (such as diagnostic testing, physician’s billing, anesthesia, and follow up treatment) has an automatic lien under law against recovery for reasonable and necessary charges for services rendered.
A doctor’s lien is typically one in which you and your lawyer, (if you have one) enter into contract with a doctor to provide treatment and wait until settlement for payment. Usually a doctor will not agree to treat you on a lien unless you have a lawyer, and will require payment at the time of service. The doctor’s bill must be paid at some point in time, whether there is a settlement or not and will be the patient’s responsibility. If you do not succeed in your personal injury claim, you could be looking at thousands of dollars coming out of your pocket to pay that doctor’s bill. A qualified attorney will be able to explain the likelihood of success of your case (and I assure you, you may think your case is a slam dunk obvious winner, but there is a lot you do not know) so that you can get the treatment you need, without running these risks.
Health Insurance Liens
Medi-Cal: Under the Welfare and Institutions Code Section 14124.71 California Department of
Health Services has a right to assert a lien against recovery for payments made to providers for services rendered. Medi-cal will make certain reductions in its lien amount, or waive the lien entirely under certain situations, or may not be entitled to reimbursement at all.
Medi-Care/Medi-Caid: Under 42 Federal Regulations Section 411.37 the Center for Medi-care/Medi-Caid services is entitled to assert a lien against recovery for payments made to providers for services rendered, and has a cause of action against the third party insurance company to recover these amounts. As with Medi-Cal, the Center for Medi-Caid/Medi-Care services may reduce or waive its lien under certain circumstances. Both Medi-Cal and Medi-Caid/Medi-Care liens will be reduced for the cost of “procurement.” In other words, if you hired an attorney for your personal injury case, the government will reduce its liens amount to account for its share of attorney’s fees.
County Indigent Services: Under the Welfare and Institutions Code Section 1700 et. Seq. The county has an automatic lien under law for services paid for against third party recovery, and has a cause of action against the injured and the third party to recoup these amounts. However, this lien only applies to personal injury judgments, and does not apply in the case of settlement. Mares v. Baughman (2001) 92 Cal. App. 4Th 672, 676-679; Newton v. Clemon’s (2003) 100 Cal.App. 4Th 1, 8-9. The county has no obligation to reduce this lien in any circumstance. Government Code 23004.2(a).