Disclaimer: This information is for educational purposes and does not constitute legal advice. Consult a qualified attorney for guidance specific to your situation.
Detailed Answer
When you resolve a personal injury claim in Maryland, various parties may assert liens against your settlement. A lien gives a creditor the right to recover costs directly from your settlement funds. Understanding these liens helps you plan for distribution of your recovery.
1. Medical Provider Liens
Under Maryland law, hospitals and certain health care providers can file a lien against your personal injury recovery for unpaid services. See Md. Health–Gen. § 19-219 (link). Once filed, the provider must be paid from your settlement before you receive your share.
2. Health Insurer Subrogation
If a private health insurer pays your medical bills, it may seek reimbursement from your settlement through subrogation. The insurer’s right depends on your policy language. Resolving subrogation demands often requires negotiation.
3. Medicaid and Medicare Liens
Maryland’s Medicaid program holds a statutory lien for services paid on your behalf. See Md. Health–Gen. § 15-112 (link). Federally, Medicare may assert a lien under the Medicare Secondary Payer Act, 42 U.S.C. § 1395y(b). You must notify Medicare of any settlement to determine reimbursement.
4. Workers’ Compensation Liens
If you received workers’ compensation benefits for the same injury, the insurer has a statutory lien against your tort recovery. Md. Lab. & Empl. § 9-610 (link). The lien is limited to the benefits paid and can often be negotiated.
5. Attorney’s Charging Lien
Under Md. Courts & Judicial Proceedings § 11-503 (link), your attorney has a right to recover fees and costs from your judgment or settlement. This charging lien ensures your lawyer is paid before other disbursements.
6. Government and Child Support Liens
Maryland can place liens for unpaid state taxes or child support. The Child Support Lien Law (Family Law § 10-119) allows the Child Support Administration to file a lien on settlement proceeds to satisfy past-due support.
7. IRS and Tax Liens
The Internal Revenue Service may record a federal tax lien under 26 U.S.C. § 6321 if you owe back taxes. This lien attaches to all your property, including personal injury settlements.
Before accepting a settlement, review all potential liens, negotiate reductions when possible, and ensure each claim is validated.
Helpful Hints
- Obtain a lien payoff letter from each claimant before closing.
- Negotiate medical provider and insurer liens to reduce your out-of-pocket costs.
- Involve your attorney early to identify and address liens.
- Notify Medicare within 60 days of settlement to determine your repayment obligation.
- Keep clear records of all benefit payments and communications regarding liens.