Detailed Answer
Before you disburse settlement proceeds in New York, you must identify and resolve any hospital and insurer liens. Unresolved liens can jeopardize the net recovery and expose you to claims. Under New York law, hospitals rely on Article 2 of the Lien Law (e.g., Lien Law § 20), while private health insurers assert subrogation rights under the Insurance Law (e.g., Insurance Law § 5102).
Step 1: Identify Potential Liens
- Review medical records and billing statements for all treating hospitals and providers.
- Request lien searches or estoppel letters from opposing counsel and third-party administrators.
- Check for Medicare and Medicaid liens if the claimant received federal or state benefits.
Step 2: Confirm Lien Validity and Amount
- Verify that hospitals complied with the Lien Law’s notice and filing requirements (Lien Law § 21).
- Obtain itemized bills and confirm that services relate to the injury producing the settlement.
- For insurer subrogation, request a written demand and confirm contractual notice timelines under Insurance Law § 5102.
Step 3: Negotiate or Litigate
- Attempt informal negotiations to reduce lien amounts. Courts often allow reasonable reductions for attorney’s fees and case risks.
- If a hospital refuses to adjust, you may petition Supreme Court to enforce or limit the lien (Lien Law § 22).
- Insurer subrogation disputes can lead to arbitration or declaratory judgment actions under CPLR Article 75.
Step 4: Secure Releases or Court Orders
- Obtain a signed lien release or stipulation from each hospital and insurer.
- If a lienholder won’t release, secure a court order directing the settlement agent to pay the lienholder directly.
- Keep originals or certified copies of releases in your closing file.
Step 5: Disburse Settlement Funds
- Confirm that all identified liens have been satisfied or escrowed.
- Prepare a settlement statement showing gross damages, lien pay-offs, attorney fees, and net recovery.
- Disburse funds in the order required by your retainer agreement and court rules.
Helpful Hints
- Start lien investigation early to avoid delays at closing.
- Keep a centralized spreadsheet of all lien amounts, contacts, and status updates.
- Use lien waiver forms specific to New York hospitals to ensure full release.
- Watch deadlines: New York hospitals must file liens within 30 days after last service.
- Consult a lien resolution specialist for complex or high-value liens.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.