Detailed Answer
When you reach a settlement in a personal injury or accident case, North Dakota law allows medical service providers and hospitals to place liens on your recovery to secure payment for care they’ve already given. Understanding how these liens work helps you negotiate a fair net award and avoid surprises at closing.
1. Understanding Medical Liens Under NDCC 32-03.2
Under North Dakota Century Code § 32-03.2 (see NDCC 32-03.2-02), a medical service provider or hospital may file a lien against any personal injury settlement or judgment. To perfect the lien, the provider must:
- Give written notice to you and your attorney within 60 days after the last date of treatment.
- File a notarized lien statement in the district court of the county where treatment occurred.
- Include the patient’s name, the treatment dates, and the amount owed.
2. Prioritizing Liens and Outstanding Bills
Liens take priority over unsecured creditors but share equally pro rata if multiple liens exist (NDCC 32-03.2-03). After you reach a settlement, the settling party must withhold lien amounts before you receive funds. Your attorney or claims adjuster parcels out payment first to perfected liens, then to other creditors.
3. Negotiating Lien Reductions
In many cases, you can negotiate with lienholders to reduce the billed amount:
- Request an itemized statement showing billed vs. adjusted rates.
- Highlight any write-offs or in-network discounts you’d receive from an insurer.
- Offer to pay a lump sum or percentage (often 30–60%) of the lien to close the account.
Most hospitals and providers prefer a quick, partial payment to waiting for full payment over years.
4. Handling Medicare and Medicaid Subrogation
If Medicare or North Dakota Medicaid paid for your care, federal and state law give them subrogation rights. You must report any settlement to Medicare under the Medicare Secondary Payer Act. Medicare may place a recovery claim. Consult the CMS Recovery Portal to request a conditional payment amount.
Similarly, North Dakota Medicaid may file a lien under NDCC § 50-24.1. Contact the ND Department of Human Services for a lien statement.
5. Allocating Settlement Funds
After you negotiate and satisfy liens, you’ll split the remaining net proceeds with your attorney according to your fee agreement. Typical fee arrangements run 33–40% of the recovery after liens and costs.
Disclaimer: This article provides general information on North Dakota law. It does not constitute legal advice. Consult a qualified attorney for help with your specific situation.
Helpful Hints
- Gather all medical bills and Explanation of Benefits (EOBs) before settlement talks begin.
- Verify that providers filed liens correctly and within the 60-day window.
- Ask providers for a written lien payoff figure that includes all fees and interest.
- Consider mediation if you and a lienholder cannot agree on a reduction.
- Notify Medicare and Medicaid early to avoid unexpected reimbursement demands.
- Keep settlement checks in escrow until all liens resolve.