Understanding Medical Liens and How They Affect Your Settlement

Disclaimer: I am not a lawyer. This article is for general information only and is not legal advice. If you have a pending claim, consult a licensed New Hampshire attorney about your specific situation.

Detailed answer — what a medical lien is and how it can change your settlement

If you were injured and a medical provider treated you, that provider may try to recover the cost of treatment from the money you receive in a personal injury settlement or judgment. That attempt to secure payment from your claim is commonly called a medical lien. In New Hampshire, various entities—hospitals, clinics, health insurers, and state Medicaid—may assert claims or liens for treatment costs. To review New Hampshire statutes and rules related to creditor rights and state recovery efforts, see the New Hampshire RSA index: https://www.gencourt.state.nh.us/rsa/html/.

Types of claims that commonly reduce your settlement proceeds:

• Provider liens or asserted liens: a hospital or physician may record a claim or send a written notice asserting they are owed from your recovery.
• Private health insurer subrogation: your insurer that paid your medical bills may seek reimbursement from your settlement (subrogation).
• Medicare or Medicaid recovery (federal and state): if Medicare paid for treatment, it may seek conditional payment reimbursement; New Hampshire Medicaid may also seek recovery through the state’s recovery unit. See New Hampshire Department of Health and Human Services: https://www.dhhs.nh.gov/.
• Worker’s compensation or other statutory liens: if a workers’ comp carrier or other statutory program paid benefits, it may have a right to be repaid.

How a valid lien affects your settlement amount

When a lien or reimbursement claim exists, the lien-holder will typically demand payment from the settlement before you receive money. That reduces your net recovery. Important points:

• Gross recovery vs. net recovery: Your settlement (the gross recovery) is first allocated to pay attorney fees, costs, and legitimate lien claims, leaving you with the net amount.
• Priority and enforceability: Not all asserted liens are valid or enforceable. Priority depends on applicable law and contract terms. A valid federal or statutory lien (for example, Medicaid or Medicare recovery) can have strong legal mechanisms for collection.
• Negotiation is common: Many providers and insurers accept less than the full billed amount if you (or your attorney) negotiate, especially where payment from a settlement is the only realistic recovery source.
• Conditional payments (Medicare): Medicare may issue a conditional payment letter and demand reimbursement for amounts it paid on your behalf. You must account for that before finalizing a settlement to avoid future liability to Medicare.

Typical sequence when settling a case with medical liens

1. Identify all potential liens and subrogation claims. Ask for written lien statements and itemized bills.
2. Confirm which liens are legally valid in New Hampshire and whether they attach to a personal injury recovery.
3. Negotiate lien amounts. Many providers will accept reduced payoffs (commonly a percentage or discounted lump-sum) because collections from a personal injury award are uncertain.
4. Obtain written releases or lien satisfactions before sending money out or closing the case.
5. Set aside disputed amounts in escrow until the dispute is resolved if necessary.

Hypothetical example (simple math to show the effect)

Suppose you settle for $100,000. You have:

• Attorney fee (contingency) — 33.3% = $33,300
• Case costs and expenses = $2,000
• Medical lien (provider asserts) = $20,000 billed

Scenario A — provider accepts 50% of billed lien: lien paid $10,000.

Net to you = $100,000 – $33,300 – $2,000 – $10,000 = $54,700.

Scenario B — provider refuses to negotiate and insists on full $20,000:

Net to you = $100,000 – $33,300 – $2,000 – $20,000 = $44,700.

This shows how negotiations over liens materially change what you receive.

New Hampshire-specific considerations

New Hampshire law governs how liens, subrogation, and state recovery efforts operate in the state. For legislative text and statute chapters that may apply to creditor or state recovery rights, consult the New Hampshire Revised Statutes Annotated at: https://www.gencourt.state.nh.us/rsa/html/. For state Medicaid recovery rules and contact information, see the New Hampshire Department of Health and Human Services: https://www.dhhs.nh.gov/. For Medicare conditional payment and recovery information, see the Centers for Medicare & Medicaid Services guidance: https://www.cms.gov/.

Helpful hints — practical steps to reduce or resolve medical liens

• Tell your attorney about every bill and every payer (private insurer, Medicare, Medicaid, workers’ comp). Full disclosure helps your attorney identify lien holders early.
• Request written lien statements and itemized bills from every provider. Don’t accept a generic demand without documentation.
• Ask for a formal repayment demand or subrogation statement from insurers and the state Medicaid recovery unit. For state claims, contact NH DHHS for their procedures: https://www.dhhs.nh.gov/.
• Negotiate. Many providers accept a reduced lump-sum payment tied to immediate collection from your settlement.
• Get releases in writing. Before the settlement funds are distributed, secure a signed release or lien satisfaction from the payer you paid.
• Consider escrow for disputed claims. If a lien is contested, ask the court or opposing party to place disputed funds in escrow until resolution.
• Watch Medicare/Medicaid deadlines. Failing to address conditional payments or state recovery claims can lead to later demands or offsets.
• Ask how the contingency fee applies. Confirm whether your attorney’s fee is taken from the gross or after certain deductions—your fee agreement should explain this clearly.
• Keep clear records of all communications, bills, and payments related to liens.

When to get legal help

If multiple liens, large bills, or government recovery claims (Medicare/Medicaid) affect your case, consult a New Hampshire personal injury attorney quickly. An attorney experienced with medical liens can often negotiate reductions, structure releases correctly, and protect your net recovery.

Final note: Laws and procedures change. The links above point to New Hampshire state statute resources and state/federal agencies. Speak with a licensed New Hampshire attorney for advice about your case.