Disclaimer: This article is for informational purposes only and does not constitute legal advice.
Detailed Answer
When you negotiate a personal injury settlement in Maryland, you must identify and resolve any hospital or insurer liens before you disburse funds. Failing to address these liens can expose you to liability for unpaid medical bills or insurer subrogation claims.
- Compile Medical Records and Billing Statements. Start by gathering all medical records, bills and Explanation of Benefits (EOBs) associated with the injury. Review these documents to list every provider (hospital, ambulance, rehabilitation facility) and insurer (health carrier, Medicare, Medicaid) that may assert a lien.
- Search for Hospital Liens. Under Maryland Courts & Judicial Proceedings § 12-119, a hospital providing emergency or inpatient care may file a lien against the recovery for charges from the date of injury until the last bill (CJ § 12-119). Verify:
- Whether the hospital timely filed the lien in the circuit court for the county where care was rendered.
- If the lien notice was served on the patient or personal representative.
- The amount claimed and the supporting billing detail.
- Identify Insurer Subrogation or Reimbursement Claims. Many health insurers and Medicare have subrogation rights to recover medical expenses paid on your behalf. Key statutes include:
- Insurance Article § 15-105 (private health insurance subrogation).
- Insurance Article § 19-501 (health maintenance organization lien).
- Validate Lien Amounts. Request lien statements and validate each charge. Ensure bills correspond to allowable rates under Maryland law and federal rules (for Medicare/Medicaid). Challenge unsupported or inflated charges in writing.
- Negotiate or Litigate Reductions. Contact lienholders to discuss potential reductions. Hospitals often accept a percentage of billed charges. Insurers may cap recovery to their actual payments.
- Obtain Written Releases. After reaching an agreement, secure a formal lien release or satisfaction agreement from each hospital or insurer. Store originals with the settlement documentation.
- Prepare Disbursement Worksheet. Create a detailed settlement ledger showing gross recovery, attorney fees, expenses and lien payoffs. Confirm that total lien payments match the agreed-upon release amounts.
- Disburse Funds Timely. Under Maryland law, settlement agents and attorneys have a fiduciary duty to pay valid liens promptly. Failure to do so may lead to penalties or personal liability.
Helpful Hints
- Review bills and EOBs as soon as liability is established.
- Keep track of filing deadlines: hospitals must file within 60 days of last treatment.
- Engage a lien resolution specialist if multiple providers are involved.
- Negotiate reductions before settlement to maximize client recovery.
- Always get signed lien releases before disbursing any settlement funds.
- Document every communication and agreement in writing.
- Consult experienced counsel to manage complex insurer subrogation claims.