Uninsured and injured? Understand California Medical Liens and Settlements
Have you ever been hit with unexpected medical bills after an accident, and you didn’t have health insurance to cover them? That’s where California medical liens on settlements can change the game for uninsured plaintiffs in personal injury cases.
These liens can significantly affect the money you take home after a settlement.
It’s not easy to wrap your head around these rules alone, so roping in a California personal injury attorney who has dealt with these liens before can be a lifesaver. They can help you understand your rights and work through the settlement process so you’re not left struggling with bills when your case is supposed to be over.
Quick Summary:
- Medical liens in California are often employed when injured individuals cannot pay their medical bills due to a lack of insurance or funds. They allow them to receive care and defer payment until a personal injury settlement is reached. Not all healthcare providers accept medical liens, typically due to concerns about the uncertain outcome of the patient’s legal case, which forms their basis for eventual payment.
- Two primary types of liens exist in California: statutory liens, governed by law and often linked to government or hospital claims, and contractual liens, arising from agreements between the injured party and the medical provider. Health insurance companies and auto insurance policies might also have provisions to recover costs via liens if they initially cover medical expenses, and healthcare providers may enter into treatment agreements on a lien basis with uninsured accident victims.
- Medical liens dictate that medical providers will be paid from personal injury settlements before the plaintiff receives the remainder. These liens potentially influence how settlements are distributed and the plaintiff’s immediate access to medical care during their case. Understanding these liens’ structures is essential as they obligate the patient to repay healthcare costs paid by a provider, usually at a negotiated rate, from the compensation received in a lawsuit outcome.
- Though not all doctors accept medical liens, those who do require a robust case-to-trust repayment will occur. Patients are advised to engage with personal injury attorneys early to aid in negotiating liens and forging assurances for medical providers. California law, particularly Civil Codes 3045.4 and 3040, restricts the amount hospitals and health insurance companies can claim from settlements, encouraging fairness and ensuring that patients are not unduly burdened financially.
- California sets a four-year statute of limitations for medical lien enforcement through legal action from the date of the lien agreement. However, some contractual liens may have no expiration if funds are held in trust. Hospitals and Medi-Cal have specific time frames (one and three years, respectively) to pursue reimbursement legally, and overall, injured parties generally have two years from the accident or injury discovery to file personal injury lawsuits in court.
What is a California Medical Lien?
Medical providers often issue a medical lien when someone gets hurt in an accident but can’t cover their medical expenses due to a lack of health insurance or financial constraints. It’s important to know that not all healthcare professionals in California are open to working with medical liens because they worry that the injured person’s personal injury case might not succeed.
What Types of Medical Liens Are Common in California?
There are generally two types of medical liens: statutory and contractual. The law establishes statutory liens, while contractual liens arise from agreements between patients and doctors. Statutory liens mainly apply to government and hospital interests.
On the other hand, contractual liens result from specific contracts between two parties. Most medical liens fall into this category based on one of the following factors:
Health Insurance
Many health insurance companies include clauses in their agreements that require you to reimburse them for any medical benefits they’ve paid if you later receive compensation from a third party in a personal injury settlement.
Auto Insurance Medical Payments
Suppose your auto insurance covers medical costs related to your accident, and it’s determined that another driver is at fault. In that case, you might need to repay some or all of the benefits you received from your insurance after you’ve settled your claim.
Treatment Agreements
When someone gets injured in a car accident without having medical insurance, some healthcare providers may agree to treat them on a lien basis. In such cases, the doctor or care provider agrees to provide immediate treatment without upfront payment, with the understanding that they’ll be compensated when a settlement is reached.
If you’re uncertain whether a medical lien is the right choice for your situation, contact our experienced California personal injury attorney. We can guide you and help you determine if a medical lien is appropriate for your case.
How Do Medical Liens Work in California?
When a medical provider agrees to treat you on a lien basis, the initial step is to enter into a legally binding contract known as a lien agreement. Once you’ve signed this contract, the medical provider takes action to formalize the lien by sending a notification to the insurer and other relevant parties.
This notification allows the insurance company or the other party to directly compensate the medical provider from your settlement or jury award before you receive your final compensation amount. California also has a provision for “statutory liens,” which empower hospitals to place medical liens against those at fault.
This arrangement ensures that injured individuals can access emergency medical services. To establish a statutory medical lien, medical providers must provide written notice of their charges to the party at fault. After you’ve received compensation for your medical expenses, the medical provider has up to one year to recover their costs.
In cases where Medi-Cal, California’s Medicaid program, covers the plaintiff, the California Department of Health Care Services (DHCS), which administers the program, has the authority to take legal action on behalf of the plaintiff and even assert its lien on the monetary recovery.
Can a California Medical Liens Affect My Personal Injury Case?
Indeed, although not always in the ways it may initially seem. Instead of directly influencing the result of a personal injury claim, a medical lien can impact an individual’s access to necessary healthcare throughout their personal injury case. Consequently, it can also affect their ability to settle the medical bills resulting from that care.
How Does California Medical Lien Affect Your Personal Injury Case?
A medical lien can impact the outcome of your personal injury settlement by granting your healthcare provider the authority to seek payment for their services directly from your settlement amount. This arrangement is based on a binding contract between you and your healthcare provider.
In this contract, the provider agrees to offer treatment at a reduced rate or no cost. In contrast, you agree to allow them to recover their medical fees from the settlement or judgment you receive in your lawsuit against the responsible party. Think of a medical lien as a way to receive necessary medical treatment on a “credit” basis.
If you fail to repay it, the healthcare provider can take legal action against you to recover their expenses. Additionally, these liens ensure you don’t receive a financial windfall from your case.
Without a lien, you would typically receive treatment from the healthcare provider and then seek compensation for your medical costs from the liable party’s insurance company. Medical liens are most commonly utilized by individuals who have suffered injuries in accidents and:
- underinsured
- unable to pay for their deductible or copay
The healthcare professional who agrees to offer medical care in return for a medical lien is referred to as the medical lienholder.
Will All Doctors Accept a California Medical Lien?
Only some healthcare professionals are open to collaborating through a medical lien. When they agree, they’re offering you medical services on credit, and you’re responsible for repaying them.
Healthcare providers typically consider working on a lien basis if they have confidence in the success of your case and your ability to secure compensation. In such situations, having our California personal injury on your side can be beneficial, as we can reassure the medical provider about the strength of your case.
We can explain that your injury resulted from someone else’s negligence or wrongdoing, making your case more likely to succeed. Convincing a medical provider to work on a lien basis may be more straightforward in cases involving strict liability. For instance, if you were injured in a dog attack, the strict liability statute holds dog owners financially responsible for injuries caused by their pets, making it easier to secure their cooperation.
Are California Medical Liens Negotiable?
Our experienced personal injury attorney can assist you in finding a healthcare provider who offers favorable lien terms even before you commit to signing an agreement. If you’ve already signed a lien agreement, rest assured that we can still negotiate with the lienholder to potentially reduce the amount you owe under the lien or establish a manageable payment plan.
It’s worth noting that California Civil Code 3045.4 limits the amount a hospital can recover from your injury settlement. The hospital is entitled to only 50% of your compensation after deducting your attorney’s fees and other legal costs.
Your attorney will handle these deductions and distribute the appropriate share to the healthcare provider. However, when negotiating subrogation with an insurance company, our legal team will carefully reference the relevant California laws to ensure the best possible outcome for your settlement.
California Civil Code 3040
California Civil Code 3040 limits the amount health insurance companies can reclaim from your award. The sum they are entitled to retrieve is determined by either the actual cost of the medical services they covered or a specific percentage of the settlement amount, depending on various factors.
The insurance company will be reimbursed the lesser of the two. Your medical expenses depend on how the health insurance company compensates the healthcare provider. Providers who receive capitation payments from insurers for each patient they treat are typically only entitled to up to 80% of their usual charges.
However, if the insurer pays them on a non-capitation basis, the physician can receive payment based on the medical bill. When you collaborate with a personal injury attorney, the insurer may be able to reclaim up to one-third of the settlement. In contrast, the insurance company can recoup up to half of your compensation if you choose not to enlist a lawyer.
Made Whole Doctrine
The Made Whole Doctrine safeguards your entitlement to your settlement when it’s insufficient to cover all your losses. This principle ensures that your insurer cannot recoup medical expenses until you’ve been fully compensated for your injuries, or until you’ve been “made whole.” If the responsible party cannot provide you with complete compensation, your insurance company cannot pursue payment from your settlement.
Common Fund Doctrine
Under the Common Fund Doctrine, a health insurer can seek reimbursement. Still, it’s typically a reduced amount based on the reasonable fees and expenses you had to cover for your attorney.
This doctrine ensures fairness, as you and the insurance company benefit from the settlement. Therefore, the insurance company should contribute to the attorney’s costs in securing that settlement.
This principle is a safeguard, preventing you from bearing the entire burden of your attorney’s fees without the assistance of insurance companies with subrogation rights. In essence, it promotes a fair sharing of the costs incurred in obtaining the settlement.
What is California’s Statute of Limitations for Medical Liens?
In California, the Statute of Limitations for Medical Liens is four years from the signing of the lien agreement. During this period, healthcare providers can pursue payment through legal action if you fail to fulfill your obligations. Understanding that this limitation pertains explicitly to the provider’s ability to enforce the lien in court is essential.
Once the four-year period expires, the provider loses the special lien rights, allowing direct collection from your settlement funds. However, some agreements may create an indefinite obligation, with no statute of limitations, if you hold settlement funds in trust for the medical provider. In such cases, legal action remains a possibility at any time.
For statutory liens, hospitals have a one-year window to seek payment, while Medi-Cal has three years to take legal action against the at-fault third party. Lastly, the standard statute of limitations for initiating a lawsuit in California personal injury cases is two years following the accident or the discovery of the injury.
Stuck with California Medical Liens on Settlements? Call Us Now!
California medical liens can be confusing and leave you feeling overwhelmed. At Conlogue Law LLP, we understand the complexities of personal injury cases involving uninsured plaintiffs. Our experienced attorneys can help you navigate California medical liens on settlements and fight for the maximum compensation you deserve.
Our law firm can also represent you in maritime accidents, airplane crash accidents, premises liability, and product liability. Call us now for more information and take advantage of our free consultation. We can answer your questions and discuss your options. Take the first step toward a brighter legal future.
