Detailed Answer
Before distributing settlement funds in a personal injury case in Nebraska, you must identify and resolve any hospital or insurer liens. Nebraska law grants hospitals a lien on settlement proceeds for care provided to an injured person. Health insurers may also assert subrogation or reimbursement rights for benefits paid. Failing to satisfy these liens could expose you to liability or delay distribution.
1. Review Medical Records and Billing Statements
Obtain all medical records and itemized bills related to the injury. Confirm each provider and insurer that furnished care or paid medical expenses.
2. Check for Hospital Liens
Under the Nebraska Hospital Lien Act, hospitals treating an injured patient may file a lien with the county clerk within 90 days of the last date of treatment. Search the lien index in the county where treatment occurred or where the lawsuit was filed. You can also ask the hospital for a lien statement.
Link to statute: Neb. Rev. Stat. § 44-2813.
3. Identify Insurer Subrogation or Reimbursement Rights
Health insurers and ERISA plans often have contractual subrogation rights to recover benefits paid. Send any insurer that provided coverage a notice of claim and request a breakdown of subrogation amounts. Review plan documents or insurance policies for the subrogation clause.
4. Send a Settlement Notice to Lienholders
After you agree to settle, send each hospital and insurer a formal notice of the proposed settlement, including a copy of the settlement agreement or release. Nebraska courts often require proof that lienholders had notice and opportunity to assert or waive their liens before disbursement.
5. Negotiate Lien Reductions
Hospitals and insurers sometimes agree to reduce their lien balance in exchange for prompt payment. Negotiate for a fair reduction, especially if you can argue “usual and customary” rates or overbilling.
6. Obtain Lien Releases or Court Approval
Secure written releases or satisfaction documents from each lienholder. Alternatively, petition the court for approval of lien resolution and a court order directing distribution. File all releases or court orders with the settlement administrator or clerk.
7. Disburse Net Settlement Proceeds
After satisfying all liens and obtaining releases, distribute the remaining proceeds to the client, attorney, and any other parties entitled under Nebraska law. Retain documentation of all payments and lien releases in case of future disputes.
Disclaimer: This is not legal advice. Consult a qualified attorney to address your specific situation.
Helpful Hints
- Always check the county lien index in every county where treatment occurred.
- Obtain complete billing statements showing dates of service and charges.
- Document all communications with lienholders in writing.
- Consider working with a settlement administrator to streamline lien resolution.
- Keep copies of lien releases and court orders in the client’s file.