In the aftermath of an accident or injury, one of the most pressing concerns for many individuals is how to cover the costs of medical treatment. Medical expenses can quickly add up, leaving victims worried about their financial future. This is where the concept of medical liens comes into play. At Rocky Mountain Personal Injury Lawyers, we understand the complexities of medical liens and are here to provide you with a comprehensive guide to navigating this often-overlooked aspect of personal injury settlements.
What Is a Medical Lien?
A medical lien serves as a contractual agreement between an injured person and a medical provider, typically a hospital, where the provider agrees to cover the cost of medical treatment until a personal injury settlement is awarded. Once the settlement is received, the provider is repaid from the settlement funds. This arrangement is especially common when the injured person lacks medical insurance or immediate funds to cover medical expenses.
However, it’s important to note that not all medical liens are without potential drawbacks.
The Possible Drawbacks of Medical Liens
Medical liens can sometimes lead to unexpected consequences. Interest may accrue on the lien, leading to a substantial increase in the total amount owed if the settlement takes a significant amount of time to be finalized. Additionally, opposing parties or insurance companies may use high medical bills as a basis to challenge the need for full compensation, potentially affecting the final settlement amount.
The Role of Medical Insurance, Medicaid, and Medicare
For those with medical insurance, Medicaid, or Medicare coverage, these options can often alleviate the need for medical liens. Medical insurance will typically cover immediate costs, and if a settlement is awarded, the insurance provider may seek reimbursement through a process called subrogation. Subrogation allows insurance providers to recover expenses they paid for medical treatment from the settlement funds.
Negotiating Medical Liens
Negotiating medical liens is a possibility. These negotiations can occur both before and after the lien agreement is signed, contingent upon mutual agreement. Since a medical lien is essentially a contract, it’s advised to have an experienced personal injury lawyer assist in these negotiations. A skilled attorney can help ensure you’re not signing away rights you may not fully understand.
Colorado’s New Law: A Boon for Injury Victims
Colorado’s House Bill 21-1300, effective from September 7th, 2021, has brought significant changes to medical liens in the state. The new law provides additional protections for injured parties:
- Informed Choices: Before a medical lien can be established, the injured party must be informed about alternative methods of payment, such as workers’ compensation, health insurance, and Medicare.
- Settlement Amount vs. Lien Amount: If a settlement is less than the medical lien amount, the injured party is not responsible for the excess lien amount. While the lien holder may claim the entire settlement, the excess won’t be owed.
- Third-Party Lien Assignments: Lien assignments to third parties, often debt collectors, cannot be used against you during settlement negotiations. This ensures you receive compensation for the full lien amount rather than a reduced sum.
- Protection from Debt Collectors: Medical liens can no longer be assigned to debt collection agencies, safeguarding your credit score and financial future.
Seek Expert Legal Counsel
At Rocky Mountain Personal Injury Lawyers, we believe in providing comprehensive support to our clients. Medical liens can be intricate and overwhelming, but with the right legal guidance, you can navigate these complexities confidently. Our experienced team is dedicated to ensuring you receive fair compensation and are aware of your options, including medical liens and their implications.
Remember, knowledge is power, and our goal is to empower you to make informed decisions about your personal injury claim. If you’re facing medical liens or other challenges related to a personal injury settlement, don’t hesitate to reach out to us for expert legal counsel. We’re here to help you secure the compensation you deserve while navigating the intricacies of the law.
