Disclaimer: This article is for educational purposes only and does not constitute legal advice.
Detailed Answer
Under New York law, a health care provider—such as a hospital, nursing home or physician—may place a lien on your personal injury settlement for the reasonable value of services it provided. These liens arise under Article 4 of the New York Lien Law. Specifically:
- Hospital and nursing home liens: Lien Law § 4 grants hospitals and nursing homes a lien on any claim for damages or cause of action resulting from an accident. (See: Lien Law § 4.)
- Practitioner liens: Licensed physicians, surgeons, nurses and other practitioners may file a certificate of lien under Lien Law § 5. (See: Lien Law § 5.)
Once a provider properly files its lien in the county clerk’s office, the lien attaches to your right to recover damages. When you negotiate or receive your settlement, you must satisfy valid liens before disbursing funds. Failing to pay a valid lien may expose you or your attorney to court orders requiring payment or sanctions.
If you dispute a lien—for example, because the charges exceed the usual and customary rate—you can challenge it by filing a special proceeding in the county where the lien was filed. The provider must then show proof that its lien is valid and for reasonable services.
Additionally, if you received Medicaid benefits for your injury-related care, the State’s Medicaid program has a right to reimbursement under Social Services Law § 369(2)(g). (See: Social Services Law § 369.) You must inform the Medicaid program of any settlement and repay the State from any net recovery after attorney fees and costs, subject to any statutory exemptions.
In practice, your attorney often holds settlement proceeds in escrow, negotiates lien reductions, and ensures proper distribution. Always review lien statements carefully and negotiate reductions whenever possible.
Helpful Hints
- Review lien filings: Confirm the provider properly filed its lien in the correct county within the required timeframe.
- Negotiate reductions: Many providers will accept a lower payoff in exchange for prompt payment.
- Hold funds in escrow: Instruct your attorney or insurer to escrow settlement funds until liens resolve.
- Challenge invalid liens: File a special proceeding under Lien Law to dispute excessive or improper charges.
- Account for Medicaid: Notify the Medicaid program promptly and calculate the repayment amount under Social Services Law § 369(2)(g).
- Consult a personal injury attorney: An experienced attorney can navigate lien law, escrows and negotiations for you.