Detailed Answer
When you obtain a settlement in Vermont for personal injury or workers’ compensation, you must identify all hospital and insurer liens before distributing funds. A lien gives a provider or insurer the right to claim part of your settlement to recover medical expenses. Follow these steps to ensure full compliance with Vermont law:
1. Identify Potential Lienholders
Review medical bills, insurance records, and case documents. Potential lienholders include:
- Hospitals and clinics
- Health insurers or third-party administrators
- Medicaid or Medicare programs
2. Search for Hospital Liens
Under Vermont’s Hospital Lien Act, hospitals may file a lien on any judgment or settlement. To locate existing liens:
- Visit the Superior Court Clerk’s office in the county where treatment occurred.
- Search the lien docket for any recorded liens under 27 V.S.A. § 704 (27 V.S.A. § 704).
3. Obtain Lien Statements
Request a detailed lien statement from each provider’s legal or billing department. This statement should itemize:
- Dates of service
- Type of treatment
- Total charges
4. Review Insurer Subrogation Rights
Health insurers often have subrogation or reimbursement rights under your policy. To confirm:
- Submit a formal reimbursement demand to the insurer.
- Review plan documents for subrogation clauses.
- Under equitable subrogation principles, insurers may seek repayment from your recovery.
5. Verify Medicaid or Medicare Liens
State and federal programs hold statutory liens for benefits paid. For Medicaid:
- Consult 33 V.S.A. § 3101 (33 V.S.A. § 3101).
- Send a notice of settlement to the Department for Children and Families.
6. Negotiate or Contest Liens
If a lien appears unreasonable, you can negotiate or file a petition for reduction. Under 27 V.S.A. § 706 (27 V.S.A. § 706), you may request a court hearing on lien amount. Consider factors such as:
- Reasonable value of services
- Attorney fees and costs
- Client’s net recovery
7. Secure Releases and Satisfaction
After agreeing on an amount, obtain a lien release or satisfaction document from each lienholder. Ensure:
- The release specifies the exact amount paid.
- You receive a fully executed release before disbursing funds.
8. Final Disbursement Accounting
Create a disbursement worksheet listing gross recovery, attorney fees, costs, and net amounts due to lienholders and the client. Issue payments in compliance with release instructions.
Disclaimer: This information is educational and not legal advice. Consult a Vermont-licensed attorney for advice tailored to your situation.
Helpful Hints
- Start lien searches early to avoid delay in settlement.
- Keep detailed records of all communications with lienholders.
- Ask hospitals for prompt payoff quotes to lock in amounts.
- Track deadlines for filing lien petitions under Vermont statutes.
- Coordinate with your attorney to reflect lien payments in the settlement agreement.