Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
Detailed Answer
1. Identify All Medical Providers and Liens
Begin by collecting statements from every medical provider involved in your care. Hospitals, physicians, physical therapists and imaging centers may each assert a lien or bill. In Michigan, the Hospital Lien Act (MCL 550.451) allows hospitals to claim a lien on any judgment or settlement that arises from injuries giving rise to hospital services. Verify that each claimed lien is valid, itemized and properly recorded.
2. Obtain Payoff Statements and Verify Amounts
Request written payoff statements from each provider or their lienholders. Ensure the amounts include only services related to your injury. Look for billing errors, duplicate charges, or unapproved rate increases. Michigan’s no-fault statute, MCL 600.2912a, caps fees for certain services under personal protection insurance; use that to challenge excessive bills.
3. Negotiate Reductions
Medical providers often accept less than the billed amount to close out liens. You can:
- Propose a percentage reduction based on the age of the debt or hardship.
- Leverage group-payor discounts you’d receive from private insurance.
- Offer prompt payment or lump-sum settlements in exchange for a lien release.
Many hospitals and treatment centers have hardship programs or unpublished policies that allow reductions up to 30–50% of billed charges.
4. Allocate Settlement Funds Properly
When negotiating a global settlement, allocate specific amounts to medical bills and other damages. This prevents providers from re-litigating the entire fund. Under MCL 600.2157, the court may order how funds are disbursed to satisfy liens. Hold disputed funds in escrow until you secure written releases.
5. Secure Lien Releases
Obtain a signed, written release from each provider or lienholder before distribution. A proper release confirms the lien is satisfied in full and prevents future claims. Retain copies for your file and provide proof of payment to the court or opposing counsel.
6. Address Federal and Governmental Subrogation
If Medicare, Medicaid or other third-party payors covered your care, they have a right to recover conditional payments. Initiate a Medicare conditional payment search through the Medicare Beneficiary and Supplier Locator or contact the Medicare Secondary Payer Recovery Contractor. Negotiate or appeal any overcharged amounts before final settlement.
Helpful Hints
- Keep meticulous records of all communications, bills and payoff quotes.
- Ask providers for written hardship or discount policies.
- Work with a settlement administrator or attorney experienced in lien resolution.
- Use escrow or a trust account to hold funds until liens clear.
- Review your settlement agreement to ensure proper allocation and releases.