Detailed Answer — Step‑by‑step process under Indiana law

When you settle a personal injury claim in Indiana, medical providers, health insurers, and government programs (Medicare/Medicaid) may assert liens or reimbursement claims against the settlement. To protect your recovery and reduce surprises, follow these steps:

1. Assemble all medical and billing records.

   Gather emergency room records, hospital charts, physician notes, itemized bills, invoices, explanation of benefits (EOBs), and any correspondence that shows who treated you, what was billed, and what insurance paid. These documents help identify which providers might assert liens.

2. Run a lien and subrogation check.

   Ask your attorney (or do yourself) to request statements from every provider who treated you and every insurer who paid benefits. Common claimants include:

   • Hospitals and health systems
   • Physicians, clinics, and physical therapists
   • Private health insurers and ERISA plans
   • Medicare (federal) and Indiana Medicaid

   Medicare conditional payment inquiries go through the Centers for Medicare & Medicaid Services (CMS). See CMS guidance on recovery and conditional payments: https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery

3. Identify applicable Indiana statutory liens and program claims.

   Indiana has statutes and program rules affecting liens and reimbursements that can impact your settlement. Review Indiana law on civil procedure and liens to understand priority and notice requirements: https://iga.in.gov/legislative/laws/2024/ic/title-34 (Indiana Code, Title 34 — Civil Law & Procedure). For Medicaid/indigent care and state program rules, check the Indiana Family and Social Services Administration: https://www.in.gov/fssa/

4. Ask each claimant for a written lien statement and legal basis.

   Request an itemized lien statement that shows the billed amounts, amounts paid by insurance, the legal authority for the lien (statute, contract, or subrogation), and contact information for the person or department handling lien resolution. Do not accept a vague or unsigned demand.

5. Verify validity and priority of each claim.

   Not every bill becomes a valid lien against your settlement. Check for:

   • Proper statutory or contractual basis for a lien
   • Timely notice or lien filing (if required by law)
   • Whether the insurer paid benefits that trigger subrogation or only forwarded payments
   • Whether bills were reduced by insurer network discounts or write‑offs (you often are not responsible for the full billed charges)
6. Negotiate reductions and obtain written releases.

   Many hospitals, insurers, and third‑party administrators will accept less than the full billed amount. Common negotiation points:

   • Ask for reductions based on billed vs. allowed amounts.
   • Offer a percentage of the net recovery rather than billed charges.
   • Request that the lien be released in writing and that any payment be labeled as “full and final satisfaction.”

   Get every agreement in writing. A signed release or satisfaction statement is proof the claim is resolved.

7. Address government program claims before closing.

   If Medicare or Indiana Medicaid may have paid for your care, you must resolve their conditional payment claims or liens before distributing settlement proceeds. For Medicare, obtain a conditional payment report and resolve CMS demands prior to settlement. For Indiana Medicaid, contact the state Medicaid agency about potential estate recovery or third‑party liability claims: https://www.in.gov/fssa/

8. Use escrow or structured closing language if disputes remain.

   If a credible lien exists but amount or validity is disputed, consider placing disputed funds into escrow or a controlled disbursement account rather than releasing the entire settlement to the claimant. The settlement agreement should state how lien claims will be handled and who will be responsible for payments from the recovery.

9. Obtain an indemnity clause or hold harmless language from your attorney.

   Settlement paperwork should protect you from later claims by requiring the claimant (or the settling parties) to handle lien payments or to indemnify you if a previously undisclosed lien arises.

10. Confirm final releases and disburse funds only after liens are resolved.

    Do not disburse funds until you have written lien releases or an agreed escrow plan. Once funds are distributed, it becomes much harder and more expensive to fix unpaid liens.

11. Keep complete records after settlement.

    Keep copies of releases, itemized lien agreements, settlement checks, communications, and escrow statements in case a provider later asserts an unpaid claim.

Hypothetical example

Jane is injured in a car crash in Indiana. The hospital bills $45,000; her insurer paid $10,000; she reaches a $50,000 settlement with the at‑fault driver’s insurer. Jane or her attorney asks the hospital for a written lien statement and negotiates the hospital down to $8,000 (reflecting insurer write‑offs and network discounts). Jane obtains a signed release from the hospital and verifies Medicare has no conditional payments. She then accepts the settlement, pays the agreed lien amount from escrow, and receives the remainder.

Common subjects of Indiana statutes and program rules to check

• Indiana Code — Civil procedure and lien provisions: https://iga.in.gov/legislative/laws/2024/ic/title-34
• Indiana FSSA — Medicaid rules and state recovery: https://www.in.gov/fssa/
• CMS — Medicare conditional payment and recovery guidance: https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery

Helpful Hints

• Start early: run lien checks as soon as liability looks likely. Lien resolution takes time.
• Get everything in writing: oral promises to reduce or release a lien are risky.
• Ask for itemized and “allowed” amounts. Insurers’ allowed amounts and network rates often reduce what a provider can legally collect.
• Contact Medicare and Indiana Medicaid directly to request conditional payment reports and guidance on resolving government claims.
• Use escrow if you can’t get all liens resolved before closing. Escrow protects you from later surprise claims.
• Be cautious about paying billed charges in full. Negotiate reductions — many providers expect to take less than billed amounts.
• Consider hiring a personal injury attorney to handle lien verification and negotiations — they routinely resolve these matters and can often secure reductions.
• Keep full records after settlement in case a lienholder later asserts an unpaid claim.