Detailed Answer
When you settle a personal injury claim in Vermont, medical providers and insurers may assert liens against your recovery for unpaid treatment. Handling these liens properly ensures a smooth distribution of funds and protects you from future claims. Below is an overview of Vermont’s lien laws and practical steps to address outstanding medical bills when negotiating your settlement.
1. Identify All Possible Liens
Under Vermont law, hospitals, certain healthcare providers and Medicaid can file liens on any tort recovery. Key statutes include:
- Hospital Liens: 18 V.S.A. § 1851 allows hospitals to record a lien for patient care. (18 V.S.A. § 1851)
- Other Provider Liens: 18 V.S.A. § 1854 covers liens by physicians, dentists, chiropractors and physical therapists. (18 V.S.A. § 1854)
- Medicaid Liens: The Department for Children and Families can assert subrogation under 33 V.S.A. § 4606. (33 V.S.A. § 4606)
2. Demand Itemized Statements
Request detailed billing statements from each lienholder. Compare billed amounts to usual and customary rates. This reveals any coding errors or out-of-network charges that may be reduced.
3. Negotiate Reductions
In many cases, lienholders will accept less than the full billed amount to avoid litigation. Send a written offer explaining your position, citing comparable fee schedules or Medicare rates. Document all communications.
4. Allocate Settlement Funds
When you receive your settlement, establish an escrow or qualified settlement fund. Distribute funds in this order:
- Attorney fees and costs.
- Statutory liens (hospital and provider liens under 18 V.S.A. ch. 101).
- Medicaid subrogation.
- Your net recovery.
5. Include Release Language
Ensure your settlement agreement includes a clause that all known lienholders will be paid from escrow. Specify that any unclaimed balance after lien deadlines returns to you. This prevents future claims.
Disclaimer: This article provides general information under Vermont law and is not legal advice. Always consult a licensed Vermont attorney about your specific situation.
Helpful Hints
- Start lien investigations early; some providers have short filing deadlines.
- Request Medicaid’s subrogation demand before finalizing the deal.
- Use certified mail when sending settlement and lien correspondence.
- Keep clear records of all offers, acceptances and escrow transactions.
- Review Vermont statutes online to stay current on lien deadlines.