Detailed Answer
Before distributing settlement funds in Utah, you must identify and resolve any hospital or insurer liens. These liens secure reimbursement for medical services or insurance benefits paid on behalf of the injured party. If you disburse funds without addressing these liens, you may face liability for unpaid debts. Here are the essential steps under Utah law.
1. Review Medical Records and Billing Statements
Obtain complete medical records and itemized billing statements from every healthcare provider. Compare the dates of service and charges to the injury timeline. Identify providers who may have a lien under the Utah Hospital Lien Act (Utah Code Title 38, Chapter 11).
2. Search County Recorder’s Office
Utah hospitals must file a lien by recording a notice in the county recorder’s office where treatment occurred (Utah Code §38-11-203). Search for any recorded hospital liens against your client in each applicable county.
3. Obtain Lien Balances and Statements
Request lien statements from each hospital or medical provider. The statement should include the outstanding balance, dates of service, and specific charges. Verify whether a provider is publicly or privately funded, as governmental hospitals may have priority under Utah Code §38-11-201.
4. Identify Insurer Subrogation Rights
Review the insured’s health plan, auto policy (PIP), and workers’ compensation benefits. Insurers may assert subrogation or reimbursement rights under Utah Code Title 31A. For personal injury protection (PIP) benefits, see Utah Code §31A-22-308. For group health plan subrogation, see Utah Code Title 31A, Chapter 26.
5. Calculate Settlement Net of Liens
Deduct the verified lien amounts from the total expected recovery. Include any negotiated reductions. Allocate the settlement to ensure each lienholder receives proper payment.
6. Negotiate Lien Reductions
Medical providers and insurers often reduce lien amounts. Send written demands for reduction, highlighting the claimant’s need for sufficient net recovery. Document all communications.
7. Obtain Lien Releases
After payment, secure a written lien release or satisfaction from each hospital and insurer. Under Utah Code §38-11-301, hospitals must release liens within 15 days of full payment.
8. Disburse Settlement Funds
With all liens resolved and releases in hand, distribute the remaining settlement funds to the claimant and any co-counsel or third-party payees ("client" net proceeds).
Disclaimer: This article provides general information and does not constitute legal advice. For guidance specific to your situation, consult a qualified attorney.
Helpful Hints
- Use county recorder online databases for initial lien searches.
- Track deadlines to preserve lien rights and avoid forfeiture.
- Request itemized benefit payments (EOBs) from insurers early.
- Start lien negotiations after initial settlement demand but before closing.
- Maintain clear records of all payments and releases.