Resolving Hospital and Insurer Liens Before Settlement Disbursement

Disclaimer: This article is for informational purposes and does not constitute legal advice. Consult a qualified attorney for guidance.

Detailed Answer

Before disbursing settlement proceeds in Oklahoma, you must identify and resolve any liens that hospitals or insurers hold against those funds. Follow these steps:

1. Compile Medical Records and Provider List
   • Obtain all treatment records and bills related to the injury.
   • Create a list of every medical provider, hospital, and entity that may claim a lien.
2. Search for Hospital Liens
   • Under the Oklahoma Hospital Lien Act (63 O.S. §1-320), hospitals may file liens against settlements for unpaid services. Review the statute at 63 O.S. §1-320.
   • Search county clerk records in the counties where treatment occurred to confirm any filed liens.
3. Investigate Insurer Subrogation Rights
   • Review the claimant’s health insurance policy or ERISA plan for subrogation or reimbursement clauses.
   • Request a subrogation demand letter and statement of account from each insurer.
4. Verify Lien Validity and Amount
   • Analyze each lien for proper notice, timely filing, and correct service dates.
   • Compare billed charges to reasonable and customary rates.
5. Negotiate or Challenge Liens
   • Negotiate reductions with hospitals; Oklahoma courts accept good-faith efforts to reduce excessive liens.
   • Challenge invalid or overstated liens through motions or settlement negotiations.
6. Obtain Written Releases
   • Secure lien releases or satisfaction documents from each provider and insurer.
   • Ensure releases reference full satisfaction upon disbursement.
7. Allocate Settlement Funds
   • Include lien payments in your settlement budget before attorney fees, costs, and client distribution.
   • Disburse funds in the order of priority: lien holders first, then legal fees, then client net recovery.

Helpful Hints

• Start lien searches early; hospitals have 120 days to file under 63 O.S. §1-320(C).
• Keep clear records of all correspondence and payments.
• Consider a qualified settlement fund or structured settlement to simplify lien resolution.
• Use certified mail or electronic service when sending lien inquiries.
• Consult with a litigation attorney experienced in subrogation matters for complex insurer liens.