Detailed Answer
When negotiating a settlement for a personal injury claim in Minnesota, you must address medical liens and unpaid bills before you receive your net recovery. Minnesota law gives certain providers and insurers the right to claim repayment from your settlement proceeds.
1. Identify All Potential Liens and Subrogation Claims
Start by collecting itemized statements and lien forms from each medical provider. Under Minn. Stat. § 514.01, health care providers can assert a lien on your cause of action for rendered services. Auto insurers that paid no-fault benefits may seek reimbursement under Minn. Stat. § 65B.44.
2. Verify and Quantify the Amounts
Review each bill for accuracy. Ensure the services relate to your injury and that charges match usual and customary rates. Dispute any errors or outdated charges directly with the provider.
3. Negotiate Reductions
Providers often accept a reduced payment in full satisfaction of their lien when you pay promptly. Negotiate a percentage reduction—many hospitals and clinics have hardship or self-pay discounts. Document any agreements in writing.
4. Use an Escrow or Trust Account
Place the disputed or negotiated lien amounts into an escrow account until you obtain lien releases. This protects you if a provider later contests the settlement distribution.
5. Obtain Lien Releases
Before disbursing settlement funds, secure lien releases or waivers from each party asserting a claim. A valid release confirms they will not pursue payment beyond the settlement allocation.
6. Allocate Settlement Documents
Work with your attorney to draft a settlement agreement that itemizes payment to each lienholder and specifies your net recovery. Clear language prevents future disputes.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a licensed attorney to address your specific situation.
Helpful Hints
- Gather all medical bills and insurance subrogation statements early in the claims process.
- Get lien reduction agreements in writing before settlement.
- Confirm statutory deadlines—Minnesota providers must file liens before settlement proceeds are distributed.
- Use a trust or escrow account to hold disputed funds.
- Ask your attorney to draft settlement releases that address all lienholders.