Detailed Answer
When negotiating a personal injury settlement in Connecticut, you must identify and resolve any medical liens or outstanding medical bills before finalizing the agreement. Medical providers, hospitals, insurers, and government programs often assert liens—legal claims against settlement proceeds—to recover costs they paid on your behalf.
1. Identify All Liens and Bills
Begin by requesting itemized bills from each health care provider and investigating whether any liens have been filed. Connecticut law allows hospitals and health care facilities to file liens under Conn. Gen. Stat. § 52-249m (hospital lien statute) and providers to record liens under Conn. Gen. Stat. § 52-566g (medical lien statute).
2. Evaluate Subrogation Rights
If an insurer—private health plan, ERISA plan, Medicare, or Medicaid—paid your medical bills, they may have a subrogation or reimbursement right. ERISA-governed plans often require you to reimburse the plan from your settlement. Identify plan documents and claim any statutory caps on reimbursement.
3. Negotiate Payoff Amounts
Contact each lienholder to negotiate reduced payoffs. Many providers accept a percentage of the billed amount—often 30–50%. Send a written settlement demand stating your intention to satisfy liens in exchange for a discount. Get any agreement in writing.
4. Allocate Settlement Funds Properly
Structure your settlement to allocate specific amounts for medical expenses, pain and suffering, lost wages, and other damages. This allocation can limit subrogation and lien claims. For example, labeling part of the settlement as “pain and suffering” may protect those funds from medical lien claims.
5. Obtain Lien Waivers and Releases
After payment, secure a lien waiver or release from each provider and insurer. This ensures they cannot pursue you for any remaining balance. Keep these releases in your settlement file.
6. Involve Your Attorney Early
An experienced personal injury attorney will help you identify all liens, negotiate reductions, draft proper settlement documents, and ensure compliance with Connecticut statutes and federal subrogation rules.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.
Helpful Hints
- Gather all medical bills and lien notices early to avoid surprises during settlement negotiations.
- Request a detailed ledger from each health care provider to verify billed vs. allowed amounts.
- Always get negotiated lien reductions in writing before finalizing the settlement.
- Check whether your health insurer’s plan documents include a fixed percentage for subrogation claims.
- Allocate settlement funds carefully to protect non-medical portions from lien encumbrances.
- Review Conn. Gen. Stat. §§ 52-249m and 52-566g online to understand hospital and medical lien procedures.
- Keep lien waiver letters and releases with your settlement records for future proof.