Liens and Subrogation in Personal Injury Claims
One of the biggest sources of stress in the aftermath of an accident is how you will be able to pay your bills and additional expenses arising from your injuries. Recovering compensation for your injuries can be a lengthy process. As you wait for a settlement or your case winds its way through the courts, you may be unable to pay a variety of the costs you incur.
If you are unable to cover the costs on your own, parties such as medical providers, private insurance companies, state and federal programs, and others may place a lien on the proceeds of your personal injury settlement or trial award. These parties can claim a portion of your recovery through a process known as subrogation.
Liens and subrogation are additional wrinkles in your personal injury claim. You don’t want to win your case only to have to start giving away the money you need to move on with your life. It is crucial to work with an experienced lawyer who can help you navigate the complexities of your case, identify potential lienholders and subrogation claims, and seek to reduce what you have to pay.
Many law firms consider their job complete when they achieve a settlement or win in court on behalf of their clients. At the Whitley Law Firm, we handle all aspects of a client’s case to the very end. This includes resolving any liens and subrogation claims with the goal of helping you hold on to as much of your recovery as possible.
Please contact the Whitley Law Firm at (919) 785-5000 to speak to a qualified personal injury lawyer in Raleigh, Kinston, or New Bern, North Carolina. It won’t cost anything to see if we can help.
What Is a Lien?
A lien is a claim against someone’s assets, such as a house, a car, etc. Creditors frequently impose liens to secure payment of debts.
In the context of personal injury law, liens are typically placed on the potential recovery of compensation. When the plaintiff’s case is successfully resolved (either via settlement or a verdict at trial), one or more lienholders may have a claim to part of your recovery.
Multiple third parties may have a lien claim on your settlement or award, including:
Doctors and Medical Providers
One of the biggest financial burdens faced by personal injury victims is the cost of medical care. Even if you have health insurance, the expenses associated with catastrophic injuries can be immense.
If you are unable to pay your medical bills, providers such as doctors, hospitals, and others may claim a lien against the compensation you recover. This is known as a physician lien.
When your case is successfully resolved, a portion of the proceeds will go to the healthcare provider(s) who treated you after the accident. However, your obligation to pay the physician lien is contingent on whether the provider has “perfected” the lien.
A lien is considered perfected if:
- The practitioner provides you or your lawyer with all medical records in your case
- The practitioner provides you or your lawyer with all of the medical bills you have incurred
- You or your lawyer has been notified of the lien in writing
All three of these conditions must be met for the physician lien to be perfected and the provider(s) to have a valid claim for payment. The Whitley Law Firm will aggressively challenge any liens from medical providers that are not perfected.
Health Insurance Companies
Your health insurance policy will cover some of the costs associated with treating injuries after an accident. However, copays and uncovered costs can quickly add up, creating significant financial burdens.
North Carolina prohibits private health insurers from including clauses related to subrogation. However, this does not always stop insurance companies from attaching a lien to a plaintiff’s recovery. It is crucial to contact a personal injury lawyer who can review your case and determine if a health insurance company has any legal right to part of your settlement or judgment.
Many employers provide health insurance through a self-funded health plan subject to rules established by the Employee Retirement Income Security Act (ERISA). ERISA health insurance plans are exempt from individual state insurance regulations. As such, employer-sponsored ERISA plans are not subject to the North Carolina law that prohibits subrogation.
ERISA liens can have a significant impact on how much you are able to keep of a personal injury settlement or judgment. It is crucial to seek knowledgeable legal guidance for assistance with your claim.
State and Federal Health Insurance Programs
Participants in North Carolina’s State Health Plan (such as teachers and other employees of the state) should be aware of liens placed on the compensation they recover in personal injury claims. By law, State Health Plan liens are perfected automatically, leaving plaintiffs with little room to challenge the validity of the lien. However, the State Health Plan cannot claim more than 50 percent of the proceeds.
Similarly, federal employees whose medical expenses after an accident are paid by the Federal Employees Health Benefits (FEHB) program could face liens on a settlement or judgment. FEHB is a federal program, so the insurer (usually Blue Cross Blue Shield) is not subject to the North Carolina law prohibiting subrogation clauses in insurance policies.
Whitley Law Firm can help you navigate the challenges of liens placed by the State Health Plan or FEHB and preserve as much of your recovery as possible.
Workers’ Compensation Programs
Depending on your employer, you may qualify for workers’ compensation from one of the following if you are injured at work:
- North Carolina Industrial Commission – Most private businesses in North Carolina are required to carry workers’ compensation insurance.
- Federal workers’ compensation – Employees of the federal government can file a claim with the Office of Workers’ Compensation Programs for benefits. Different agencies administer claims for different types of federal employees.
If you file a workers’ compensation claim at the state or federal level, the insurer (either a private insurance company or the federal government) will likely place a lien on your personal injury recovery.
A workers’ compensation attorney at the Whitley Law Firm can petition the Superior Court of North Carolina to try to reduce the lien claimed by your employer’s insurance company. Reduction of the lien may only be possible if a settlement is reached with a negligent third party liable for your workplace accident.
If federal workers’ compensation benefits cover the cost of medical treatment and other expenses related to an on-the-job injury, the federal government takes priority for reimbursement. Plaintiffs are guaranteed to keep at least one-fifth of the proceeds from the settlement or judgment, but a federal workers’ comp lien can significantly reduce your total award.
Medicaid is a federal health insurance program for low-income individuals. If you are insured through Medicaid and your benefits cover the cost of treating injuries sustained in an accident, Medicaid may place a lien on your personal injury settlement or judgment.
A Medicaid lien is capped by law at one-third of your financial recovery. In addition, plaintiffs in North Carolina can file a petition to have the lien further reduced. Attorneys at the Whitley Law Firm will explore all of your options for reducing what Medicaid can claim from your personal injury compensation.
Senior citizens, those receiving Social Security Disability benefits, and others may qualify for health insurance through Medicare. If Medicare benefits are used to pay for injuries in an accident, a Medicare lien will be attached to your recovery.
Medicare liens are relatively uncommon, applying only in cases involving the elderly and other qualified individuals. However, a Medicare lien can quickly gobble up a significant amount of your settlement or judgment, as claims by Medicare get priority for repayment.
Active-duty military, retired military, and their dependents are eligible for health insurance coverage through the federal TRICARE program. If you are insured through TRICARE and your benefits are used to treat your injuries after an accident, TRICARE could place a lien on the compensation you recover through a personal injury settlement or award.
Unlike with other federal programs, TRICARE liens are not capped. However, with the assistance of a qualified attorney, they can be reduced or adjusted in the interest of fairness.
Division of Vocational Rehabilitation Services
The North Carolina Division of Vocational Rehabilitation Services (DVRS) provides services to help disabled individuals reenter the workforce. Personal injury victims may qualify for DVRS services if they are unable to work after an accident.
DVRS can place a lien on your personal injury recovery for reimbursement of vocational rehabilitation services you receive. The maximum amount of a DVRS lien is one-third of the recovery. The division may also agree to reduce or waive the lien if it creates a hardship for the plaintiff.
Child Support Liens
Plaintiffs who owe past-due child support may have a lien placed on the settlement or judgment by (a) the co-parent of their child or children or (b) the North Carolina Department of Health and Human Services. Child support liens are only paid after all other lien claims (from physicians, insurers, government programs, etc.) are satisfied.
What Is Subrogation?
Now that you know the third parties who may attempt to place a lien on your personal injury settlement or trial result, it is important to know the process these parties use to try to get payment. With subrogation, these parties assert their claim to part of the money you recover when a personal injury claim is settled or a lawsuit is successful.
In subrogation claims, doctors, insurers, and other third parties argue that they incurred expenses because of the plaintiff’s injuries, which resulted from the negligence of the defendant. As such, third parties (known as collateral sources) argue that they are entitled to a portion of the proceeds from any settlement or lawsuit as reimbursement for expenditures they make for the benefit of the plaintiff.
Subrogation claims may arise in any type of personal injury case, including those involving:
Collateral sources may have a legitimate claim to part of the money you receive in a settlement or awarded to you by the courts. However, in other cases these claims are invalid, especially when physicians fail to complete the process of perfecting a lien and when insurance companies violate the North Carolina law banning subrogation.
Without knowledgeable legal representation, you may pay a lien that is excessive or that you may not be required to pay. The money from a personal injury settlement or judgment is crucial for overcoming the costs of the accident and taking back your life. You shouldn’t have to be forced to use the proceeds for debts that could be negotiated down or waived altogether.
How Whitley Law Firm Can Help with Liens and Subrogation
Attorneys at the Whitley Law Firm can assist you with two of the most important aspects of liens and subrogation in your personal injury case:
- Confirming the validity of the medical provider and subrogation liens and aggressively challenging claims that are unvalidated.
- Seeking reductions and/or lien waivers to increase your net recovery.
Many law firms focus on maximizing compensation for their clients. However, once the case is resolved, it is just as important to ensure that you get to keep as much of the money you need and deserve.
Contact a Lien and Subrogation Lawyer Today
At the Whitley Law Firm, we closely evaluate each and every lien claim made against your future settlement or judgment. We determine if the lien has been perfected and, in cases where you do have to pay, negotiate on your behalf to try to limit the money you owe.
Furthermore, our team will evaluate your case for free. You only pay if we win, and our fee structure is reasonable and transparent.
All of these factors make it possible for you to pursue justice for a personal injury without having to worry about incurring any upfront costs or facing unexpected fees as your case progresses.
If you are facing a lien or subrogation claim in a personal injury matter, contact the Whitley Law Firm by calling (919) 785-5000 today. Our attorneys serve clients in Raleigh, Kinston, New Bern, and all of North Carolina.