Understanding Liens on a Personal Injury Settlement in Ohio

Short answer: A lien is a legal claim by someone who paid your medical bills, benefits, or other costs related to your injury and now seeks repayment from the money you receive in a settlement or judgment. Liens can significantly reduce the money you actually take home. This article explains common types of liens under Ohio law, how they work, and practical steps to protect your recovery. This is educational information only and not legal advice.

What is a lien?

A lien is a legal hold or claim against part of your settlement or judgment. The lien holder (for example, a health insurer, government benefits program, or a medical provider) asserts a right to be repaid from the proceeds you receive for the injury that created those expenses. A lien does not always mean money leaves your hands immediately — but it does create a legal obstacle you must deal with before you receive the full amount.

Common types of liens that can arise after an Ohio personal injury

• Private health insurer / ERISA plan subrogation: If a private insurer paid your medical bills, the plan may have a contractual or statutory right to recoup payments from your settlement. Many employer health plans are governed by ERISA, which uses federal rules. Federal ERISA rules and plan contracts can give plans strong subrogation or reimbursement rights.
• Medicare and Medicaid: Federal and Ohio Medicaid rules require recovery from third parties who are legally responsible for an injury. Medicare also has a right to be repaid for conditional payments for treatment related to the injury. These programs often require notice of the settlement and may demand repayment or a properly approved Medicare Set‑Aside (MSA) before final distribution. For general information about Ohio Medicaid, see the Ohio Department of Medicaid: https://medicaid.ohio.gov/ and for federal Medicare recovery/secondary payer rules see the Centers for Medicare & Medicaid Services (CMS): https://www.cms.gov/.
• Medical provider or hospital liens: Medical providers sometimes assert liens or claims against your recovery when they treated you for an injury. In some states providers have a statutory hospital lien; in others they rely on contract, common law, or equitable subrogation. Ohio law and case law govern how providers may assert and enforce those claims. For Ohio statutes and rules, see the Ohio Revised Code: https://codes.ohio.gov/.
• Medicare/Medicaid estate recovery (if applicable): For certain Medicaid beneficiaries, Ohio may seek recovery from a beneficiary’s estate after death for medical assistance paid. Federal law also addresses Medicaid recovery—see federal law at: https://www.govinfo.gov/ (search 42 U.S.C. § 1396k).
• Attorney charging lien or judgment liens: Your lawyer may have a charging lien (a claim against the recovery) to secure unpaid fees. Creditors who obtain judgments against you can sometimes try to levy or garnish your proceeds, depending on timing and exemptions.
• Child support or government liens: Child support arrearages, state tax liens, or other governmental claims can attach to a recovery in certain circumstances.

How liens can affect the amount you actually receive

Liens commonly reduce your net recovery in three ways:

1. Direct deduction at settlement: The lienholder demands payment from the settlement fund. Your settlement check is reduced by the lien amount (or a negotiated portion).
2. Holdback or escrow pending resolution: Parties set aside part of the settlement in escrow until lien amounts are resolved. You don’t receive that money until claims are cleared.
3. Post‑settlement enforcement: If you receive the full settlement and later a lienholder sues or garnishes, you may have to pay from other assets.

Example (hypothetical): You settle for $100,000. After attorney fees (commonly a percentage) and expenses, imagine an outstanding health insurer subrogation claim for $20,000 and medical bills for $15,000. Those liens or claims could reduce the money available to you by tens of thousands of dollars unless negotiated or reduced.

Priority: whose lien gets paid first?

Priority depends on the type of claim, whether a lien was perfected, statutory priority rules, and court rulings. Government claims (for example, some Medicaid recoveries) and properly perfected liens often take priority. ERISA plan rights and private subrogation claims may be contractually strong. Priority disputes are common and usually require negotiation or court resolution.

How lienholders enforce rights in Ohio

Enforcement can take the form of:

• Demand letters to your lawyer or insurer.
• Filing a lien or notice of claim in court or with a clerk.
• Suing you or your insurer for reimbursement.
• Garnishment or levy after obtaining a judgment.

Steps to protect your recovery in Ohio

Early action reduces surprises. Key steps include:

• Tell your lawyer about every insurer, provider, and benefit program: Give your attorney the names and contact info for any plan or program that paid your bills (private insurance, Medicare, Medicaid, auto medical payments, PIP, workers’ comp, etc.).
• Obtain itemized bills and payment statements: Ask for a ledger showing who was paid and how much. This helps quantify claims and spot errors or double charges.
• Get written statements of what payors claim they are owed: Request formal subrogation or conditional payment statements. For Medicare, obtain a conditional payment letter and follow CMS procedures before settling (CMS requires resolution or a final demand). See CMS guidance at https://www.cms.gov/.
• Negotiate reductions: Many lienholders will accept less than the full billed amount, especially when attorney fees and case risks are considered. Health insurers and providers often negotiate to avoid litigation costs or collection uncertainty.
• Use settlement language and allocation: Where appropriate, negotiate how the settlement is allocated among past medicals, future medicals, pain and suffering, and lost wages. Thoughtful allocation can affect which dollars are subject to liens.
• Escrow disputed amounts: If you cannot resolve a lien before settlement, consider setting disputed funds aside in escrow or with the court while you fight the claim.
• Address Medicare/Medicaid specifically: For Medicare: request a conditional payment amount from CMS and resolve it before final distribution to avoid future demands. For Ohio Medicaid: notify the Ohio Department of Medicaid and follow recovery procedures. See Ohio Department of Medicaid: https://medicaid.ohio.gov/.
• Consider structured settlements or releases of future payments: For large settlements, structuring can reduce exposure and provide steady income while negotiating liens.

What if a lienholder sues after you settle?

If a lienholder later sues, common defenses include:

• Challenging the amount with itemized evidence.
• Arguing statutory or contractual limits on recovery.
• Proving that the payment was unrelated to the injury or covered by your insurance.
• Raising equitable defenses such as the unreasonableness of the asserted lien given attorney fees and case risk.

Resolving lien disputes often requires negotiation or court litigation. Do not ignore demands — defending late suits can be harder and more expensive.

When to get a lawyer experienced with liens and subrogation

If your settlement is likely to be reduced by more than a small amount, or multiple lienholders are involved (private insurers, Medicare, Medicaid, providers), you should consult an attorney who regularly handles subrogation and lien resolution. An attorney can:

• Communicate with lienholders and obtain demands and ledgers;
• Negotiate lump‑sum reductions or pay‑off terms;
• Escrow disputed funds safely;
• File motions or suits to resolve priority disputes when needed.

Helpful Hints

• Identify every insurer and third‑party payer as soon as possible — early notice prevents surprise demands.
• Ask for a written subrogation demand or conditional payment statement; verbal statements are weak evidence.
• Document all communications with providers and insurers and keep copies of bills, payments, and explanation of benefits (EOBs).
• Consider whether attorney fees should come off the top before lien claims apply; some negotiations depend on how fees are allocated.
• For Medicare beneficiaries: always obtain a final conditional payment demand from CMS and resolve it before distributing settlement funds. CMS has strict procedures for reimbursement.
• Be cautious about accepting a “net” settlement figure without understanding exactly who gets paid from the gross amount.
• If a government program (e.g., Medicaid) claims repayment, involve counsel early — government recovery rules differ from private insurer rules.

Where to look for official Ohio rules and more information

• Ohio Revised Code and Ohio statutes: https://codes.ohio.gov/
• Ohio Department of Medicaid (policy and recovery information): https://medicaid.ohio.gov/
• Centers for Medicare & Medicaid Services (Medicare secondary payer and conditional payment guidance): https://www.cms.gov/
• Federal ERISA information (for employer health plans): U.S. Department of Labor, Employee Benefits Security Administration: https://www.dol.gov/agencies/ebsa

Final checklist before you sign a settlement

1. Ask who will be paid out of the settlement and in what amounts.
2. Request written lien or subrogation demands and itemized ledgers.
3. Get any Medicare conditional payment letters and resolve them.
4. Negotiate reductions or set disputed amounts aside in escrow.
5. Confirm how attorney fees and costs will be deducted relative to lien claims.
6. Consider getting a written court order or release that resolves lienholders before funds are distributed.

Disclaimer: This article provides general information about Ohio law and common lien issues in personal injury settlements. It is educational only and does not constitute legal advice. Laws and procedures change. For advice specific to your case, speak with a licensed Ohio attorney who handles personal injury, subrogation, and lien resolution.