Disclaimer: This article is for informational purposes only. It does not constitute legal advice.
Detailed Answer
When you settle a personal injury claim in Pennsylvania, several entities may assert a lien on your recovery. Liens allow medical providers, insurers, and government programs to recover costs they paid on your behalf. Understanding these liens helps you plan your settlement disbursement.
1. Hospital and Medical Provider Liens
Pennsylvania law grants hospitals a statutory lien on settlement proceeds for treatment related to your injury. Under the Pennsylvania Hospital Lien Act, 40 P.S. § 117, a hospital can file a written notice of lien with the county recorder before settling your claim. The lien attaches to any judgment or settlement up to the amount due for services.
2. Medical Assistance (Medicaid) Liens
If you received Medical Assistance benefits, the Commonwealth may have a lien on your settlement. The Third-Party Liability provisions in 55 Pa. Code §§ 1181.1–1181.86 require you to notify the Department of Human Services of any tort recovery. The Department can file a lien to recoup benefits paid.
3. Medicare Liens
Federal law requires Medicare to be repaid for conditional payments made during your recovery. 42 U.S.C. § 1395y(b) mandates a Medicare Secondary Payer process. Medicare issues a demand letter outlining the lien amount, which you must pay from your settlement.
4. Private Health Insurer Subrogation and ERISA Liens
Private insurers often include reimbursement provisions in health plans. Under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1132(a)(3), and state common law, insurers may assert subrogation or reimbursement claims. Review your policy’s language to determine your insurer’s right to recover.
5. Child Support Liens
If you owe past-due child support, the Domestic Relations Code authorizes a lien on personal injury proceeds. Under 23 Pa.C.S.A. § 4303(d), the Domestic Relations Section can intercept funds from your settlement to satisfy arrears.
6. Attorney’s Charging Liens
Your attorney has a common law charging lien on any judgment or settlement for fees and costs incurred. This lien arises automatically upon engagement, ensuring payment of your attorney’s fees before distributing the net proceeds.
Helpful Hints
- Identify all potential lienholders early to avoid surprises at closing.
- Obtain lien letters or payoff quotes from each lien claimant.
- Negotiate lien reductions or compromises when possible.
- Ensure your attorney allocates settlement funds net of liens.
- Keep detailed records of all notices and communications with lienholders.