Detailed Answer
Before you distribute any personal injury settlement in Washington, you must identify and clear all hospital and insurer liens. Doing so protects your client, complies with state law, and prevents future claims against disbursed funds.
- Conduct a Comprehensive Lien Search
Begin by requesting a lien search from the county clerk or the Washington State Department of Health. Search both recorded liens and unrecorded subrogation claims from private insurers and government programs like Medicare or Medicaid.
- Obtain Written Lien Statements
After identifying potential liens, send formal written requests for lien statements to each hospital, healthcare provider, and insurer. Under RCW 7.70.020, hospitals must record their lien within 90 days of the last treatment (RCW 7.70.020).
- Verify Lien Validity and Priority
Review each statement for:
- Proper recording date and patient identification.
- Statutory compliance, including notice requirements under RCW 7.70.040.
- Accurate itemization of charges and applicable discounts.
- Assess Insurer Subrogation Rights
Washington has no specific statute governing private health insurer liens. Instead, insurers rely on contractual or equitable subrogation under ERISA or state law. Review plan documents, policy language, and any letters of protection to determine the insurer’s claim amount.
- Negotiate Reductions or Payment Plans
Many hospitals will reduce lien amounts or accept a percentage of billed charges. Insurers sometimes negotiate recoveries based on plan terms. Document all agreements in writing and obtain lien releases or satisfaction letters.
- Prepare for Closing and Disbursement
Set aside funds in escrow to cover valid liens. Before final disbursement, confirm receipt of signed lien releases and satisfaction certificates under RCW 7.70.050. Provide pay-off letters to the settlement administrator or court clerk.
- Document Your File
Maintain copies of all liens, correspondence, releases, and payment records. This protects against future challenges and client disputes.
Helpful Hints
- Order preliminary lien searches early in settlement negotiations.
- Always get lien reductions in writing—verbal agreements rarely stick.
- Hold back disputed lien funds in escrow until you resolve the dispute.
- Include a detailed lien status report in your closing binder.
- Confirm Medicare Secondary Payer obligations if the plaintiff has Medicare coverage.
Disclaimer: This article provides general information only and does not constitute legal advice. Consult a qualified attorney in Washington for advice tailored to your situation.