How Do Medical Liens Affect Personal Injury Settlements?

Navigating the aftermath of a personal injury in New Jersey can be overwhelming, especially when it comes to understanding medical liens. These claims, pursued by healthcare providers and insurance companies, are a standard part of personal injury settlements, ensuring the reimbursement of medical costs. If you have been injured due to someone else’s negligence, securing a skilled Morris County Personal Injury Attorney is crucial to ensure that all medical liens are fair and directly related to the injuries sustained, enabling you to focus on recovery without an undue financial burden. 

What is a Medical Lien?

When accident victims in New Jersey face financial hardship in covering their medical expenses, healthcare providers often offer treatment in exchange for a medical lien. This is a legally enforceable contract where the healthcare provider essentially extends credit for services rendered.

Medical liens enable healthcare and insurance providers to reclaim the costs associated with the victim’s treatment. By establishing a medical lien, providers secure their payment from any personal injury settlement the victim may receive. Failure to properly resolve these medical liens can result in outstanding financial obligations that negatively impact your credit score.

How Do Medical Liens Affect My Final Settlement Award?

When a personal injury settlement is less than the total medical lien, the healthcare provider is legally entitled to the full amount. This means the victim may be responsible for paying the remaining balance directly to the provider. For instance, imagine your medical treatment after an auto accident amounts to $40,000, and your health insurer paid $20,000. If you secure a $60,000 settlement from the negligent party, your health insurer has the right to recover the $20,000 it covered.

Ultimately, medical liens can considerably diminish your financial settlement. These liens grant healthcare providers a legal claim to receive payment directly from your settlement funds before you do. Consequently, medical expenses and, in some cases, insurance claims are settled first. The remainder, after these payments and your attorney’s fees, is what you will receive.

Are Medical Liens Negotiable?

Generally, a personal injury attorney can engage in negotiations with lien holders to reduce the outstanding amounts, which could result in a larger take-home award for you. Medical liens can usually be negotiated at any stage of a personal injury claim.

Before you sign a medical lien agreement, the terms are open for negotiation, similar to any other contract. However, many healthcare providers may be hesitant to alter their standard lien offers. An experienced personal injury attorney at Lutz Injury Law can help you fight for more favorable and reasonable lien terms.

Even after a medical lien agreement is entered, it remains negotiable and can be modified if both parties consent. For example, if a victim incurs substantial medical expenses but subsequently does not win their personal injury claim, an attorney can help you negotiate with the lienholder to reduce the outstanding balance or establish a manageable payment plan.

Healthcare providers normally negotiate these types of liens rather than pursuing legal action or resorting to collection agencies. Therefore, victims are strongly advised to connect with an attorney to facilitate negotiations following a personal injury settlement.

At Lutz Injury Law, we are prepared to help you safeguard your rights and interests. Our legal team is committed to guiding you through this complex process. Contact our firm today to schedule a consultation.