Detailed Answer
Before you disburse any settlement funds in Arkansas after an injury case, you must locate and clear all hospital or insurer liens that have attached to those funds. Failing to resolve liens can expose you to double liability and delay client payments. Below are the essential steps under Arkansas law.
1. Compile a List of Potential Liens
Begin by gathering every medical provider and insurer involved in your client’s treatment. Common lienholders include:
- Hospitals, urgent care centers, rehabilitation facilities
- Private health insurers and health maintenance organizations (HMOs)
- Government payors such as Medicaid or Medicare
2. Search Public Records and Provider Files
Under Arkansas Code § 18-46-101 et seq., hospitals must file lien affidavits in the county clerk’s office within 90 days after the patient’s last treatment. Search the relevant county clerk’s records for these filings. Simultaneously, request lien statements and billing ledgers directly from each provider.
Arkansas statute on hospital liens: A.C.A. § 18-46-101 et seq.
3. Review Insurer Subrogation Claims
Health plans often have subrogation rights to recover what they paid. Under Arkansas Code § 23-66-209, a health benefit plan may assert a lien on any recovery. Obtain the insurer’s subrogation demand and policy documents to confirm the amount and validity.
Insurer subrogation statute: A.C.A. § 23-66-209
4. Evaluate and Challenge Liens
Compare billed charges to usual-and-customary rates. If a hospital or insurer demands an excessive amount, you can negotiate a reduction. Gather peer-reviewed fee schedules or contract rates to support your arguments.
5. Negotiate and Obtain Lien Releases
Once you and the lienholder agree on a reduced amount, request a formal lien release or waiver. For hospitals, obtain a notarized lien release that references the settlement amount and case name. For insurers, secure a written subrogation release.
6. File Satisfactions and Releases
After obtaining releases, file a satisfaction of lien with the county clerk where the lien was recorded. This step clears the public record. Retain copies of all releases in your settlement file.
7. Disburse Settlement Funds
With liens cleared, you can safely allocate remaining funds to your client, attorney’s fees, and case expenses. Prepare a detailed ledger to document each deduction and final disbursement.
Helpful Hints
- Start lien searches early—liens must be resolved before the court will approve a disbursement.
- Use certified mail when sending payoff requests to establish proof of notice.
- Maintain a master spreadsheet of all providers, dates of service, billed amounts, and negotiated payoffs.
- Check Medicaid and Medicare separately, as federal rules (42 U.S.C. § 1396k) may govern those liens.
- Keep clients informed of lien status and any delays in receiving releases.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a licensed Arkansas attorney for guidance specific to your situation.