Detailed Answer
Before disbursing settlement funds in South Dakota, you must identify and resolve all hospital and insurer liens. Lien holders may include medical providers, hospitals, and health insurers with subrogation rights. Below are the key steps:
- Identify Potential Lien Holders
Obtain a complete list of medical providers, hospitals, and insurers who paid or provided treatment related to the injury. - Send Lien Notification Requests
Send written requests to each provider and insurer asking for a statement of their lien amount and legal basis. - Review Statutory Subrogation Rights
Under South Dakota law, health insurers have a right of subrogation against recoveries from third parties. See SDCL 58-11-9. - Validate the Lien Amounts
Check that the charges are reasonable and related to the injury. Compare itemized bills with average charges in similar cases. - Negotiate or Challenge Liens
South Dakota courts may reduce liens deemed excessive or invalid. Negotiate with lien holders or file a motion to challenge the lien under SDCL 34-32A-5. - Allocate Settlement Funds
Prepare a settlement distribution statement allocating funds to each lien holder before disbursing any amounts to the client or other parties. - Obtain Lien Releases
After payment, get a written release or satisfaction of lien from each provider or insurer. This clears the title and protects against future claims. - Record Lien Satisfaction
If the lien was recorded in county records, file the satisfaction document with the county register of deeds or appropriate court. - Disburse Remaining Funds
Once all liens are resolved and releases obtained, you may safely disburse the remaining settlement proceeds according to your fee agreement and disbursement instructions.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Always consult a qualified attorney for guidance on your specific situation.
Helpful Hints
- Keep copies of all lien correspondence and payment receipts.
- Check deadlines for filing lien challenges under South Dakota law.
- Review your retainer agreement for lien resolution provisions.
- Consider obtaining a court order approving lien resolution if required by your settlement structure.
- Allow extra time for lien negotiations before the settlement closing date.