Detailed Answer
If you receive a personal injury settlement in Pennsylvania, you must often satisfy medical liens before you get your net proceeds. A medical lien lets a health care provider or insurer claim a portion of your settlement to cover treatment costs they advanced.
Pennsylvania Hospital Lien Law
Pennsylvania grants hospitals a statutory lien on settlement proceeds for care they provided. Under 28 P.S. § 1651 et seq., a hospital may file a lien against any cause of action you pursue for injuries treated at that facility. See the statute here: 28 P.S. § 1651 et seq.
Health Insurer Subrogation
If your private health insurer paid your medical bills, it likely has a subrogation right under your policy. Subrogation lets the insurer recover from your settlement the amounts it paid on your behalf. Review your insurance contract for clauses on subrogation or reimbursement.
Medicare and Medicaid Liens
If Medicare or Medicaid covered your treatment, federal law requires reimbursement from your settlement. Medicare’s lien rules appear at 42 C.F.R. § 411.37: 42 C.F.R. § 411.37. Medicaid recovery rights derive from 42 U.S.C. § 1396k: 42 U.S.C. § 1396k.
ERISA Plan Reimbursement
If an employer-sponsored health plan governed by ERISA paid your bills, it can enforce reimbursement rights under the plan’s subrogation provisions. Courts regularly uphold ERISA plan clauses that seek repayment from personal injury recoveries.
Negotiating and Reducing Liens
You can often negotiate lien reductions. Providers and insurers may accept less than the billed amount, especially when settlement funds are limited. Work with your attorney to reach discounts or structured payment plans.
When You May Not Owe
If you paid all medical bills out-of-pocket and no provider or insurer filed a lien or subrogation claim, you may not face any lien obligations. Always verify payment records and insurer statements.
Key Steps Before You Settle
- Obtain a lien report from your attorney or a third-party vendor.
- Review lien amounts and sources: hospitals, insurers, Medicare/Medicaid.
- Negotiate reductions or payment plans with lien holders.
- Allocate settlement proceeds explicitly in your release documents.
Disclaimer
This information is for educational purposes only and does not constitute legal advice. Consult a qualified attorney to discuss your specific circumstances before taking action.
Helpful Hints
- Keep detailed records of all medical payments and bills.
- Save copies of any lien notices and demand letters.
- Verify lien amounts well before your settlement date.
- Request written confirmations for any negotiated lien reductions.
- Understand your insurance policy’s subrogation or reimbursement clauses.