Disclaimer: This article is for informational purposes only and does not constitute legal advice. Always consult a qualified attorney about your specific situation.
Detailed Answer
Before you receive net proceeds from a Tennessee personal injury settlement or judgment, you must satisfy any medical bill liens. In Tennessee, two primary types of liens may apply:
- Hospital Liens: Under the Hospital Lien Law, a public or private hospital that provides emergency care may assert a lien on your recovery. See Tenn. Code Ann. § 29-26-119.
- TennCare (Medicaid) Liens: If you received Medicaid/TennCare benefits for your injury-related medical bills, TennCare has a statutory lien on your recovery. See Tenn. Code Ann. § 71-5-117.
1. Identify and Quantify All Medical Liens
Your attorney will request lien statements from every medical provider who treated you. This includes hospitals, labs, rehabilitation centers, imaging facilities and doctors’ offices. Each provider must supply an itemized bill and lien affidavit.
2. Check for TennCare Payment
If TennCare paid any bills, your attorney must notify the Bureau of TennCare in writing within 30 days after settlement or judgment. The bureau will calculate its lien amount according to Tenn. Code Ann. § 71-5-117.
3. Negotiate Reductions
Many medical providers will accept a reduced amount in full satisfaction of their lien, especially when presented with a lump-sum payment. Your attorney can leverage volume discounts and Medicare rate schedules to negotiate a lower payoff.
4. Escrow and Approval
Once you reach a tentative settlement, your attorney places the gross settlement funds in trust or escrow. The court or claims administrator will verify that all liens are addressed before approving disbursement.
5. Issue Payments and Obtain Releases
Your attorney issues payments directly to each medical provider and to TennCare, if applicable. Upon receipt, providers must execute a lien release. You should collect all release forms before obtaining your net settlement.
6. Final Disbursement
After liens are paid and releases secured, the remaining funds are distributed to you, your attorney (for fees and costs), and any other entitled parties.
Helpful Hints
- Compile all treatment records and bills early to avoid last-minute delays.
- Ask your attorney about letters of protection for providers who agree to defer payment.
- Allow at least 30 days for TennCare to confirm its lien amount.
- Document every negotiation and ensure you receive written lien reductions.
- Never disburse settlement proceeds until all lien releases are in hand.