Detailed Answer
When you suffer an injury, medical providers can place liens on your personal injury recovery under Pennsylvania’s Hospital Lien Act (40 P.S. §§ 1301–1308). Liens ensure providers get paid from any settlement or judgment. Negotiating liens downward maximizes your net recovery. Below are key strategies and legal concepts under Pennsylvania law.
1. Understand the Hospital Lien Act (40 P.S. § 1301 et seq.)
The Hospital Lien Act allows hospitals and ambulatory surgical facilities to file liens for charges related to treatment of injuries caused by third parties. To perfect a lien, the provider must file a notice within 12 months of last treatment. See 40 P.S. § 1301 et seq..
2. Audit and Itemize Medical Bills
Request itemized billing records from every provider. Look for duplicate charges, billing errors, and services not related to the injury. Correcting mistakes often reduces the lien amount by 10%–30%.
3. Use Benchmark Rates
Compare billed charges to Pennsylvania’s usual and customary rates or Medicare’s allowed amounts. Medicare pays roughly 40%–60% of billed hospital charges. These benchmarks support arguments that providers accept lower payment.
4. Negotiate Based on Pro Rata or Percentage of Recovery
Propose paying a percentage of your total recovery rather than full billed charges. Common settlement concessions range from 20%–50% of the billed amount, depending on case strength and provider willingness.
5. File a Motion to Reduce a Hospital Lien (40 P.S. § 1308)
If negotiations stall, file a petition in the county court where the lien is recorded to reduce the lien to a “reasonable” amount. The court considers the nature of services, reasonable value, and the settlement amount. See 40 P.S. § 1308.
6. Coordinate with Primary and Secondary Insurers
Identify whether health insurance or auto no-fault benefits can satisfy part of the lien. Pursuing insurer reimbursements first may leverage faster payments and improve negotiation leverage with providers.
7. Document All Communications
Keep written records of all negotiations. Written offers and counteroffers create pressure on lienholders and help establish reasonableness in court.
Helpful Hints
- Start lien review early—liens typically file within 12 months of treatment.
- Maintain clear injury-related treatment documentation.
- Use Medicare fee schedules available at CMS.gov.
- Leverage lien reductions to settle your personal injury claim faster.
- Consider informal mediation before filing court motions.
Disclaimer: This article is for educational purposes and does not constitute legal advice. Consult a licensed attorney to discuss your situation.