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Private Medical Insurance Liens Against Your Personal Injury Settlement

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Posted in on August 18, 2017

You may be surprised to learn that your health insurance provider has the right to assert a lien for the repayment of benefits paid on your behalf with regard to your personal injury case. This is what’s called demand for subrogation.   Subrogation is premised upon the concept that a person should not have their medical bills paid twice, once by his/her health insurer, and a second time in the form of a settlement or judgment for damages. Massachusetts General Laws Chapter 111, §§70A-70D set forth the procedure whereby a health care provider may perfect a lien. The statute expressly provides that written notice of a lien must be sent via certified mail return-receipt requested to the injured party, his or her attorney, and the insurer prior to the third-party settlement. If you fail or refuse to pay the insurance lien, you can be sued by your private insurance company for repayment of the lien amount and denied future coverage.

It is crucial to obtain a copy of the contract language from your health insurance plan to determine what rights your health insurance company may have. Most contract language limits recovery to third party liability cases and insurers do not have a right to settlement funds from Uninsured Motorist cases or Underinsured Motorist cases.

Prior to the completion of your personal injury case it is important to ensure that you have exhausted your Personal Injury Protection (PIP) Coverage on your automobile insurance policy including MEDPAY, and that the bills reportedly paid by your private health insurance provider have, in fact, been paid and are related to the injuries you sustained in the accident.

When it comes to the payment of liens, attorneys can often negotiate a reduction of the lien amount held by your private health insurance company, ultimately giving you a greater net recovery.

Negotiating with a Health Maintenance Organization (HMO) is often easier than with a Preferred Provider Organization (PPO) since HMOs operate by paying hospitals, doctors, and other health care providers a specific amount each year for every patient they see, regardless of the amount of treatment any single patient receives. When you negotiate a medical lien reduction with an HMO it is important to understand that they’ve already paid the provider their fee.  PPOs differ from HMOs in that a PPO pays providers separately for each of the services they provide but the providers agree to accept lower fees in exchange for being part of the PPO network (with the potential for attracting more patients). Basically, HMOs negotiate with their own money, whereas PPOs negotiate with the medical provider’s money.

At Baker, Braverman and Barbadoro, P.C., we have experienced personal injury attorneys that can both handle your personal injury case and successfully negotiate your lien allowing you to  keep more of your settlement. – Christine T. LaRose.