Disclaimer: This article is for informational purposes and does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation.
Detailed Answer
When you resolve a personal injury claim in Tennessee, various third parties may assert liens against your settlement proceeds. Knowing these liens helps you estimate your net recovery and negotiate proper allocations.
1. Hospital Liens
Tennessee grants a statutory lien to hospitals for charges incurred while treating your injury. Under Tenn. Code Ann. § 29-32-101, hospitals can file a lien against any judgment or settlement arising from the injury. The lien amount cannot exceed the reasonable value of the services rendered.
2. Medical Provider Liens
Individual providers—such as physicians, surgeons, and ambulance companies—may claim liens by contract or assignment. Unlike hospital liens, these often require a written agreement at the time of treatment. If a provider intends to enforce a lien, you or your attorney should ensure the provider files timely notice in the county clerk’s office.
3. Workers’ Compensation Liens
If your injury also led to a workers’ compensation claim, the employer or insurer may assert subrogation rights under Tenn. Code Ann. § 50-6-112. They can claim repayment from your settlement for benefits paid. You must factor this lien into settlement negotiations to avoid unexpected shortfalls.
4. State Medical Assistance (Medicaid) Liens
The Tennessee Bureau of TennCare can place a lien on your recovery to recoup medical assistance paid on your behalf. See Tenn. Code Ann. § 71-5-117. The state must be reimbursed before you receive funds, unless you obtain a waiver or negotiate a reduction.
5. Federal Medicare Liens
Medicare may seek conditional payment recovery under federal law if it covered your medical expenses. The Centers for Medicare & Medicaid Services (CMS) issues a “demand letter” outlining amounts owed. You must satisfy or contest this lien prior to disbursement.
6. ERISA Plan Liens
Employer-sponsored health plans governed by ERISA often include subrogation or reimbursement clauses. The plan may claim repayment for benefits it paid. Reviewing your plan documents is critical to identify deadlines and negotiation options.
7. Federal and State Tax Liens
Unpaid federal or state taxes can trigger automatic liens against your assets, including settlement proceeds. The IRS lien process appears under 26 U.S.C. § 6321, and Tennessee’s Department of Revenue may also file liens for state taxes.
Helpful Hints
- Discuss all potential liens early with your attorney to factor them into settlement strategy.
- Obtain payoff statements or demand letters from lienholders to confirm amounts owed.
- Negotiate lien reductions when possible—providers sometimes accept less than the full billed amount.
- Allocate settlement funds clearly in writing to reflect medical and non-medical damages.
- Request lien satisfaction letters after payment to prevent future collection attempts.
- Keep detailed records of medical bills, benefit statements, and correspondence with lienholders.