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Detailed Answer

Before you disburse settlement funds in Maine, you must identify and resolve any hospital or insurer liens. Maine law creates a specific process for hospital liens and recognizes insurers’ subrogation rights. Follow these steps to ensure a clear title to your settlement proceeds:

1. Investigate Hospital Liens
   Maine’s Hospital Lien Act (Title 14, §§ 3131–3136) grants hospitals a statutory lien on settlement proceeds. Request a copy of any lien filed and confirm it complies with 14 M.R.S. § 3131 (notice requirements) and § 3136 (lien enforcement deadlines).
2. Review Insurer Subrogation Claims
   Private insurers often reserve subrogation rights in health or auto policies. Demand a statement of benefits paid and policy language. Verify deadlines to assert subrogation. Maine courts enforce reasonable insurer claims against settlements.
3. Address Medicaid/Medicare Reimbursement
   If the injured party received Medicaid, the State may seek recovery under Maine’s subrogation statute (22 M.R.S. § 1711). For Medicare, follow federal rules (42 U.S.C. § 1395y(b)). Send a notice of settlement and allow time for a demand.
4. Provide Statutory Notices
   Under 14 M.R.S. § 3131, you must send written notice of the settlement to each hospital or lienholder by certified mail. Include the settlement amount, date, and payor. Give lienholders at least 30 days to respond or enforce.
5. Negotiate or Litigate Liens
   You can negotiate reductions for hospital bills or insurer claims. Hospitals may accept reasonable percentages. If a lienholder refuses to negotiate, you may petition the court to determine the lien’s validity and value.
6. Obtain Lien Releases
   Secure a signed lien release or waiver from each hospital, insurer, Medicaid, and Medicare. Confirm releases cover all liens and claims related to the incident.
7. Disburse Funds
   After you receive written releases, distribute the net settlement according to your client’s instructions. Retain copies of releases and correspondence for your file.

Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.

Helpful Hints

• Act promptly: hospital liens expire if not enforced within 90 days after notice (14 M.R.S. § 3136).
• Keep detailed records of all lien notices, settlement documents, and communications.
• Review insurance policies early to catch subrogation clauses and deadlines.
• Request a “zero balance” or “no-lien” letter from each provider once bills are paid.
• Consider escrow: hold disputed lien amounts in court or escrow until resolution.