Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney in Virginia for guidance tailored to your situation.
Detailed Answer
In Virginia, medical liens protect health care providers by securing payment from any settlement or judgment in a personal injury case. Virginia Code § 8.01-66.10 grants providers a lien on proceeds from a recovery to cover emergency or medically necessary treatment. These liens attach once a provider gives the injured person written notice and records the lien in the clerk’s office of the circuit court where treatment occurred. (Va. Code § 8.01-66.10).
To handle medical liens or unpaid bills in settlement negotiations, follow these steps:
- Identify Liens Early: Request a lien search from the court clerk to uncover recorded liens. Ask each provider for a detailed, itemized payoff statement. This statement should list billed services, adjustments, and current balance.
- Review the Lien Validity: Verify that the provider followed filing requirements, such as timely notice and proper recording. An invalid lien gives your attorney leverage to reduce or eliminate the lien.
- Negotiate Reductions: Many providers will accept less than the full billed amount—often 25% to 50% off—to avoid litigation. Use industry-standard reductions or insurer fee schedules (e.g., Medicare) as benchmarks in negotiations.
- Allocate Settlement Funds: Structure the settlement agreement to allocate a specific portion for medical expenses. This clarifies how much of the proceeds the provider can claim and reduces disputes.
- Secure Lien Waivers and Releases: Once you settle the amount with a provider, obtain a written waiver or release for the paid amount. Without this release, the provider could still pursue collection from you.
- Consider Subrogation Claims: If an auto insurer paid your medical bills under a MedPay policy, the insurer may have subrogation rights under Virginia Code § 38.2-2216. Review your policy and factor any reimbursement demands into negotiations.
- Address Government Liens: If Medicare, Medicaid, or other government programs paid for treatment, federal law may create a lien. You may need to report the settlement to the Centers for Medicare & Medicaid Services and satisfy any lien before distribution.
By proactively identifying liens, negotiating realistic reductions, and securing clear releases, you protect your settlement proceeds and reduce post-settlement disputes.
Helpful Hints
- Obtain all medical billing records and lien documentation early.
- Compare billed rates with Medicare or insurer fee schedules for negotiation leverage.
- Track statute-of-limitations deadlines for filing or challenging liens.
- Work with an attorney to draft precise settlement language addressing liens and releases.
- Consider escrow arrangements if a lien dispute remains unresolved at settlement.