Detailed Answer
When you negotiate a personal injury settlement in Pennsylvania, unpaid medical bills or liens can reduce your net recovery. Understanding how Pennsylvania law treats these liens helps you maximize your settlement.
1. Identify Existing Liens and Outstanding Bills
Request detailed billing statements from all healthcare providers, hospitals, and insurers involved in your care. Pennsylvania’s Hospital Lien Act (77 P.S. §§ 1801–1807) grants hospitals a lien on settlement proceeds. (See 77 P.S. §§ 1801–1807.)
Under the MCARE Act, some healthcare providers file separate liens. Providers must comply with Subchapter E notice requirements. (40 P.S. § 1303.535 et seq..)
2. Verify and Challenge Lien Amounts
Review each bill for accuracy. Confirm dates of service, procedure codes, and total charges. Under Pennsylvania law, overbilling or duplicate charges may be challenged or renegotiated.
3. Negotiate Reductions with Providers
Many providers accept a percentage of billed charges—often 25% to 50%. Present your settlement range and request a discounted payoff. Providers often prefer a lump-sum payment over waiting for full balance collection.
4. Allocate Settlement Funds and Use Escrow
When drafting your settlement agreement, earmark funds to satisfy liens. Consider placing lien amounts into an escrow account. This ensures prompt payment and shields you from future collection efforts.
5. Leverage Statutory Deadlines and Priority Rules
Hospital liens under the Hospital Lien Act generally take priority over other claims. Providers who miss filing deadlines may lose lien rights. Check deadlines carefully: hospitals typically must file within 6 months of discharge; some providers under MCARE must file within 90 days of last treatment.
6. Document Every Agreement
Obtain written lien waivers or satisfaction letters after payment. Keep all correspondence and receipts. Clear documentation prevents providers from reopening old claims.
Helpful Hints
- Request lien statements early—ideally before reviewing settlement drafts.
- Note statutory deadlines: hospital liens (6 months), provider liens (90 days).
- Negotiate aggressively—most providers will accept reduced payoffs.
- Use an escrow arrangement to secure lien payoffs and prevent disputes.
- Obtain all releases, waivers, and satisfaction letters in writing.
Disclaimer: This article provides general legal information about Pennsylvania law and does not constitute legal advice. Consult a qualified attorney for guidance tailored to your situation.