What Is a Medical Lien and Why Would You Need It?

An injury to the body, such as those due to a car accident, can send you to an emergency room. In critical conditions, doctors will provide treatment without asking for information about your insurance or how you’ll pay for their services.

Unfortunately, the medical cost of treating some personal injuries can run into tens of thousands of dollars. If you’re not in a financial position to settle the bill, the healthcare provider can initiate a medical lien. But what is a medical lien, and why would you need it? Let’s explain.

What Is a Medical Lien?

A medical lien is a legally binding agreement between you and the medical provider. In this agreement, a healthcare provider seeks to recover the cost of their medical services from a potential settlement. Simply put, the doctor or hospital places a demand for repayment against the personal injury lawsuit you file. You are essentially getting treatment on credit. Please note that the agreement must follow some strict protocol to be considered enforceable. But whether it is unenforceable or not, you will still be liable for the expenses.

Doctors strive to meet the statutory requirements because a lien agreement against your settlement guarantees that they’ll recover their money if a settlement succeeds. Before signing the agreement, a patient can consider negotiating a medical lien, preferably with the help of their personal injury attorney. It is possible for the medical provider to consider reducing the amount you owe them.

Why Would You Need a Medical Lien?

As we mentioned earlier, healthcare providers establish medical liens when patients are unable to pay their medical expenses. Maybe you don’t have health insurance, and you suffered injuries because of someone else’s negligent actions. Personal injury law gives you the right to hold the other party liable for your medical expenses. If you are insured, you don’t need a medical lien unless you have reached your maximum insurance limit and haven’t cleared your medical bills.

What Else Do You Need To Understand?

Suppose your healthcare policy is enough to cover the treatment cost. It is important to keep in mind that your insurance company may recoup those medical expenses from your settlement. Your insurer works through a legal process known as subrogation. However, some states prohibit health insurers from inserting subrogation clauses into their insurance policies. As such, you should check whether this applies to your state.

We hope this post has helped you answer the question, “What is a medical lien, and why would you need it?” But lien law is a complex subject. If you have other questions, it is best to consult your attorney.