Detailed answer — what typically happens to medical or chiropractor claims when you settle

When you recover money in Maryland for an injury (by settlement or verdict), people and entities that paid or provided your medical care may have legal or contractual claims against some or all of the money you receive. Those claims are commonly called liens, subrogation claims, or repayment demands. Which claims can be deducted from your settlement depends on the type of payer, any applicable Maryland law, and the contracts or insurance rules that apply.

Common categories and how each usually works

• Private health care providers (doctors, chiropractors, clinics):

  Most private providers do not automatically have a statutory lien on your settlement simply because they treated you. Instead they have a right to be paid for services under a contract or to sue you for unpaid bills. A chiropractor may try to place a lien or seek payment out of settlement proceeds by agreement with you or by filing a collection action if unpaid.

• Hospitals and certain emergency providers (statutory liens):

  Maryland law includes provisions that allow certain hospitals and health-care facilities to assert liens in limited circumstances. The exact procedure and scope are set out in Maryland’s Health–General statutes and related court rules; some hospitals use statutory hospital-lien procedures to assert claims against personal-injury recoveries. For the Health–General statutes, see the Maryland Code, Health—General (online): https://mgaleg.maryland.gov/mgawebsite/Laws/Articles/health%20-%20general.pdf

• Private health insurers (subrogation/reimbursement):

  If a private insurer paid for care, the insurer frequently has contractual rights to be reimbursed from any third‑party recovery (this is called subrogation or reimbursement). The enforceability, dollar amount, and priority of that claim depend on the insurance policy language, any applicable state rules, and whether the plan is governed by federal ERISA rules.

• Medicare and Medicaid (federal and state recovery rules):

  Federal law gives Medicare a right to be reimbursed from settlements for treatment it paid that duplicated the third‑party recovery (see Medicare Secondary Payer rules and 42 U.S.C. § 1395y). Maryland Medicaid (Medical Assistance) also may assert a claim for repayment. These governmental programs often require a prompt notice of settlement and will issue a demand for repayment. See Medicare recovery information (U.S. Code and CMS): https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1395y&num=0&edition=prelim and CMS guidance: https://www.cms.gov

• Workers’ compensation or no‑fault insurers:

  If workers’ compensation or an automobile no‑fault insurer paid medical bills, they typically have statutory subrogation or lien rights that will require repayment from any third‑party recovery. Those statutes and procedures are separate from ordinary medical provider claims.

How liens and subrogation claims are often handled in Maryland settlements

1. Before settlement, ask every medical provider and insurer for a written statement of their claim or lien amount. Do not assume the billed amount equals the enforceable lien. Many claims can and should be negotiated down.
2. Insurer and government claims (Medicare/Medicaid) often require formal notice and have specific deadlines and procedures. Medicare, for example, will issue a demand and may require a Medicare Set‑Aside or direct repayment from proceeds.
3. Some Maryland hospitals may use a statutory lien procedure. Check with the hospital billing office and your lawyer to confirm whether a statutory hospital lien applies in your case and what steps are required to remove it.
4. Attorney fees and litigation costs usually come off the gross settlement first, then valid liens are paid from the remainder. In many jurisdictions, it’s common for plaintiffs’ counsel to negotiate reductions with lienholders or seek an equitable reduction of liens when payment would otherwise leave the injured person with little or no recovery after attorney fees. Whether and how much a lien can be reduced depends on the lienholder’s legal rights and any applicable Maryland rule or case law.
5. Never sign a full‑release and accept funds until you know (in writing) how liens and statutory claims will be resolved or until disputed liens are escrowed or otherwise protected. Your attorney typically will require lien releases or payoffs from the settlement provider(s) before distributing funds to you.

Practical examples (hypothetical)

Example 1: You have $100,000 settlement. Your attorney’s contingency fee (33%) plus costs leaves a net of $60,000. A private insurer demands $20,000 in reimbursement and a chiropractor demands $6,000. You may be left with $34,000 unless the insurer and chiropractor accept less after negotiation. If Medicare has a claim, it may demand repayment and that will reduce your net further unless you negotiate.

Example 2: Same facts, but you or your attorney successfully negotiate the chiropractor’s lien down to $1,500 and the insurer to $10,000 because they prefer a quicker recovery. Your net recovery increases accordingly. This kind of negotiation is common.

Key Maryland legal sources to check

Start by reviewing Maryland statutes and state agency rules that govern hospital liens, Medicaid recovery, and insurance reimbursement. Maryland’s official code site is a good place to begin: https://mgaleg.maryland.gov/mgawebsite/Laws/Articles/health%20-%20general.pdf

For Medicare and federal repayment rules see U.S. Code and CMS guidance: https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1395y&num=0&edition=prelim and https://www.cms.gov

Helpful hints — what to do next

• Do not cash or accept settlement funds until all lien issues are in writing and resolved, or the settlement funds are placed in escrow to protect your interests.
• Get written, itemized statements of all medical bills and written lien statements from any provider or insurer claiming repayment.
• Ask whether any insurer claim is governed by ERISA (that affects your rights and procedures).
• Notify and ask Medicare or Medicaid for a conditional payment search and the amount they claim is repayable; follow their required procedures. See CMS for details: https://www.cms.gov
• Negotiate — many lienholders will accept less than the billed amount if presented with a realistic offer and the cost of litigating their claim.
• Ask your attorney about escrow options: funds can be held while lien disputes are resolved so you can get part of your recovery while protecting claimants’ rights.
• Keep good records: correspondence, demand letters, itemized bills, and payoff statements make negotiation and resolution much faster.
• Consider getting specific legal advice: a Maryland attorney experienced in personal injury, subrogation, and lien resolution can protect your recovery and handle negotiations with Medicare, insurers, and providers.

Important disclaimer: This article explains general legal concepts under Maryland law for educational purposes only. It is not legal advice and does not create an attorney‑client relationship. Laws change and each case is different. Consult a licensed Maryland attorney about your specific situation before signing releases or accepting settlement funds.