Health Insurance Liens: What Are They and Why They Matter

If you have been injured in an accident and your health insurance has provided medical treatment related to that accident, you may be required to repay your health insurance company for those expenses out of any recovery you receive in a personal injury lawsuit. This is known as a health insurance lien, and it is an important factor to consider in any personal injury case.

​

In the case of private health insurance, the right to reimbursement is generally contractual. This means that the terms of your insurance policy will dictate the circumstances under which the health insurance company is entitled to repayment. In the case of government-funded health plans such as California's Medi-Cal and the federal Medicare program, the right to reimbursement is statutory. This means that the law itself requires you to repay the health insurance plan for any accident-related medical expenses they have paid.

​

Failure to resolve a health insurance lien upon the conclusion of your personal injury case can have serious consequences. If you do not satisfy your obligation to repay your health insurance company, you may later be pursued for the amount of the lien, plus interest. In cases involving government-funded health plans, severe penalties can also be imposed.

 

The good news is that health insurance liens are usually negotiable, meaning the health insurance carrier will, in most cases, accept something less than the entire amount as payment in full. Sometimes, the health insurance carrier will reduce its lien to account for a "proportionate share" of attorney fees and costs.  The reasoning for this is that if the carrier is benefiting from the work of the plaintiff’s attorney, they should be required to bear some of that cost.  Other times, it is possible to get the health insurance carrier to reduce the amount of their lien based on arguments that charges for medical services not related to the accident were included in the lien, or that the treatment was not entirely accident-related.

 

In conclusion, health insurance liens are an important consideration in any personal injury case. Failing to address them can have serious consequences, including being pursued for the amount of the lien, plus interest and maybe even penalties. The good news is that health insurance liens are often negotiable following the resolution of a personal injury case. Navigating the complex arena of health insurance liens required a skilled and experienced personal injury attorney. 

​

If you have been injured in an accident, contact Phillips & Associates for a free consultation.  We will act swiftly to protect your rights, advance your case, and ultimately work toward recovering fair and just compensation for your injuries.