Will Medical or Chiropractor Liens Be Deducted From My Settlement in Florida? | Florida Estate Planning

Detailed Answer — How medical and chiropractor bills affect your Florida settlement

Short answer: possibly. Whether medical or chiropractor charges are deducted from your settlement depends on who paid or has a legal claim to repayment (insurers, Medicare/Medicaid, hospitals, or the provider itself), any assignment or lien the provider holds, and whether those payors assert a subrogation or lien claim before your settlement is disbursed. You should not assume settlement funds are fully yours until all claims and payoffs are identified and resolved.

Common scenarios in Florida

Auto insurance PIP (Personal Injury Protection): Florida law requires PIP for many auto accidents. If your PIP insurer paid medical bills, it typically has a right to be repaid from recoveries related to the same accident. See Florida’s PIP statute for details: Fla. Stat. § 627.736.
Private health insurance or worker’s comp: If your insurer paid medical care, it often has a contractual or statutory right to recover (subrogation or reimbursement) from any settlement you receive. That insurer will usually send a demand or conditional payoff figure. Some plans operate under federal ERISA rules, which can affect how subrogation is enforced.
Medicare and Medicaid: If Medicare or Medicaid paid for treatment that relates to your injury, federal and state rules require repayment from settlements. Medicare may issue a conditional payment amount that you must address before you finalize distribution. Medicaid (Florida) may also seek recovery. Contact your attorney early so your settlement plan accounts for any required repayment to government programs.
Medical providers and chiropractors: Providers can try to collect unpaid bills directly from you. Many providers ask patients to sign an assignment of benefits or lien/assignment that gives the provider a right to be paid from any settlement. In Florida, the enforceability of those agreements depends on the specific paperwork and timing. If a provider has no statutory lien or assignment, they may need to file a lawsuit and obtain a judgment to get paid from your settlement proceeds.
Hospital or facility liens: Some hospitals or trauma centers may rely on special lien rules or file liens under state law or by contract. The exact availability and priority of any hospital lien varies; check the Florida statutes and consult counsel.

What typically happens at settlement

Before your attorney or the settlement administrator distributes proceeds, payors with valid claims generally present payoff statements or lien demands. The settlement amount is often reduced to satisfy these valid claims. If a claim is disputed, you (or your lawyer) can negotiate reductions, seek lien waivers, or use escrow until the dispute is resolved. Disbursing settlement funds without addressing valid liens can expose you to later collection actions.

Key legal rules to keep in mind (Florida context)

PIP reimbursements: PIP carriers assert subrogation rights under Florida law; review Fla. Stat. § 627.736 for PIP rules and coverage requirements.
Government payors: Medicare and Medicaid expect repayment for conditional payments. Federal Medicare recovery rules and Florida Medicaid recovery rules both can apply; your attorney should obtain the Medicare conditional payment amount and confirm any state Medicaid claim before distribution.
Provider claims: Providers rely on signed assignments, private-pay agreements, or lawsuits to secure payment. A signed assignment often gives the provider standing to demand payment from a settlement, but the amount and enforceability can sometimes be negotiated.
Priority and negotiation: Some payors may accept negotiated reductions or lien compromises. Experienced injury counsel will seek written payoff numbers and negotiate to minimize how much comes out of your pocket.

Practical example (hypothetical)

Imagine you recover $50,000 in a Florida car-accident settlement. Your PIP insurer paid $6,000 in medical bills; your chiropractor treated you and sent bills totaling $4,500 and claims you assigned benefits to the clinic; and Medicare had paid $2,500 in conditional payments. Expected steps:

Your attorney requests formal payoff demands from the PIP carrier, chiropractor (payoff statement and any assignment), and Medicare.
Medicare provides a conditional payment amount to be repaid before final disbursement.
Your attorney negotiates the chiropractor’s demand (maybe getting a reduction or a written waiver if the chiropractor agrees to accept less) and secures PIP reimbursement to the insurer.
After valid liens and negotiated payoffs are paid from the gross settlement, the remaining net balance goes to you (less attorney fees and costs allocated under your fee agreement).

Without resolving those claims beforehand, the settlement administrator should not distribute funds to you because payors may later pursue collection, leaving you personally liable.

Why you should involve a lawyer

Handling lien and subrogation issues correctly requires identifying all potential payors, obtaining written payoff demands, and negotiating reductions when possible. A lawyer who handles Florida injury settlements can:

Identify PIP, private insurer, Medicare/Medicaid, and provider claims;
Request and analyze payoff statements and conditional payment demands;
Negotiate lien reductions and obtain lien waivers or releases in writing;
Structure settlement allocation (medical vs. pain & suffering) in a way that can help reduce payable amounts — where appropriate and legal;
Protect you from disbursing funds before obligations are cleared.

Helpful Hints — Practical steps to protect your settlement

Do not sign anything or accept distribution until all payors’ claims are identified and you have written payoffs or a plan to resolve them.
Ask each medical provider and chiropractor for a written payoff or lien statement and any signed assignment of benefits they claim.
If Medicare or Medicaid may be involved, request Medicare conditional payment information immediately; federal rules often require repayment.
Request payoff figures in writing and demand itemized bills so you can spot errors or duplicate charges.
Negotiate. Many providers accept less than billed amounts in exchange for prompt payment or a lien waiver.
Get written releases or lien waivers from any provider you pay from settlement funds.
Consider holding disputed amounts in escrow until lien disputes are resolved rather than paying unconfirmed claims from your share of the settlement.
Keep detailed records of every letter, payoff, and payment; you may need them if a provider later sues for unpaid charges.
Work with an attorney experienced in Florida personal-injury settlements to avoid mistakes that could leave you personally liable.

Useful links: Florida Statutes (search and browse): https://www.leg.state.fl.us/statutes/

Medicare Secondary Payer information (federal): https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Medicare-Secondary-Payer

Disclaimer: This article provides general information about Florida law and common settlement practices. It is not legal advice and does not create an attorney-client relationship. Laws change and individual facts matter. For advice tailored to your situation, consult a licensed Florida attorney who handles personal injury and lien/subrogation matters.