Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult an attorney licensed in Pennsylvania for guidance.
Detailed Answer
1. Identify All Potential Liens
Start by listing every party that provided medical treatment or paid benefits on behalf of the injured client. Common lienholders include:
- Hospitals, physicians, and other health care providers
- Personal Injury Protection (PIP) or no-fault insurers under auto policies
- Health insurance carriers asserting subrogation rights
- Government programs (e.g., Medicare, Medicaid)
- Workers’ compensation insurers
2. Verify Statutory Hospital Liens
In Pennsylvania, hospitals and ambulance services may file liens under the Hospital Lien Act (40 P.S. § 1301.101 et seq.). Procedures include:
- Checking the county prothonotary’s records where treatment occurred for a filed lien notice
- Confirming the lien attaches to any recovery up to the billed amount
- Noting key deadlines: the provider must record the lien within six months of last treatment
3. Ascertain Insurer Subrogation Claims
Insurers that paid PIP or medical payments often claim reimbursement from third-party recoveries. Under the Pennsylvania Motor Vehicle Financial Responsibility Law, 75 Pa.C.S. § 1705, they may assert subrogation rights. Steps include:
- Requesting a formal subrogation demand letter from each insurer
- Verifying the amounts paid and scope of coverage
4. Obtain and Review Itemized Statements
Ask each medical provider and insurer for a detailed accounting of charges and payments. Compare statements to the treatment record to spot duplicate or non-covered services. Accurate totals help you negotiate effectively.
5. Negotiate and Resolve Liens
Most lienholders will settle for less than the full amount. Tactics include:
- Presenting a written demand that outlines the client’s net recovery and priority of deductions
- Requesting reasonable reductions based on fair market value or Medicare rates
- Documenting all communications in writing to avoid later disputes
6. Secure Lien Releases or Waivers
Once you agree on a payoff amount, obtain a signed release or lien waiver from each party. Ensure the release specifically references the client’s name, the claim file number, and the settlement amount. This prevents future claims against the disbursed funds.
7. Disburse Settlement Funds
Before issuing checks, prepare a settlement ledger showing:
- Total gross recovery
- Attorney’s fees and case expenses
- Payments to lienholders
- Balance to the client
Have the client review and approve the ledger. Disburse funds only after all releases clear to avoid potential liability.
Helpful Hints
- Maintain clear records: track liens, deadlines, and communications in one central file.
- Use standardized forms for lien resolution demands and releases.
- Watch statutory deadlines closely—missing them can invalidate a lien.
- Consider a title search for hospital liens recorded in county land records.
- Always confirm the final payoff figure in writing before disbursing funds.