Detailed Answer
When you settle a personal injury claim in Tennessee after receiving workers’ compensation benefits, the workers’ compensation insurer gains a statutory lien on your third-party recovery. To verify and satisfy this lien correctly, follow these steps:
- Identify the Statutory Basis: Under Tenn. Code Ann. § 50-6-112(a), the insurer is subrogated to your right to recover from the at-fault party. Review the full statute here: Tenn. Code Ann. § 50-6-112.
- Request a Lien Statement: Send a written request to the workers’ compensation insurer for a detailed lien statement, specifying the total medical expenses, indemnity benefits paid, accrued interest, and any statutory fees. By statute, the insurer must respond within 30 days.
- Review and Verify Amounts: Compare the lien statement to your settlement paperwork and medical billing records. Confirm each charge and benefit payment date. Dispute errors promptly in writing.
- Allocate Settlement Proceeds: Before you finalize the settlement, set aside funds for attorney fees and litigation costs. Calculate the insurer’s lien pro rata based on your gross recovery as required by Tenn. Code Ann. § 50-6-112(c).
- Negotiate Adjustments: If the lien appears excessive, negotiate a reduction. Tennessee courts may reduce the lien for attorney fees and costs under § 50-6-112(c)(3).
- Seek Court Approval: File a petition in the appropriate Tennessee trial court seeking approval of the lien satisfaction. Attach the settlement agreement, the insurer’s lien statement, and your allocation breakdown.
- Satisfy the Lien: After court approval, pay the agreed lien amount directly to the insurer or into an escrow account. Obtain a satisfaction letter or release from the insurer and file it with the court clerk to clear the lien.
- Maintain Documentation: Keep copies of the lien statement, correspondence, court orders, settlement agreement, and payment receipts for your records.
Disclaimer
This article is for educational purposes only and does not constitute legal advice. Consult a licensed Tennessee attorney to address your specific circumstances.
Helpful Hints
- Act promptly to meet statutory deadlines and protect your rights.
- Document all communications with the insurer in writing.
- Request an itemized breakdown of medical vs. indemnity charges.
- Review your attorney’s fee agreement to understand lien negotiations.
- Confirm the satisfaction letter is recorded with the court clerk.