Detailed Answer
Short explanation: When a medical provider, insurer, or a public benefits program seeks repayment from money you obtain in a personal-injury case, that claim is called a medical lien, subrogation claim, or recovery. These claims can reduce the money you actually take home from a settlement or jury award unless they are identified and handled before you finalize the payout.
How medical claims commonly arise in Washington
After an injury (car crash, slip and fall, etc.), hospitals and other providers often treat you and then try to recover the cost of that care from any settlement you later obtain. In Washington, a hospital may assert a lien against a personal-injury recovery under state law. See the Washington Hospital Lien provisions in the Revised Code of Washington: RCW Chapter 7.70.
Types of repayment claims you may see
- Hospital/provider liens filed under state lien statutes (see RCW chapter above).
- Private health-insurer subrogation or reimbursement claims based on contract language in your insurance policy.
- Medicare or Medicaid (Apple Health) conditional payment or recovery claims. Federal and state programs have statutory rights to be reimbursed when they paid for treatment that resulted from someone else’s fault.
- Workers’ compensation liens if the injury was work-related and the insurer paid medical bills or benefits.
How a medical claim affects your recovery
Medical claims typically attach to the portion of your settlement or award that compensates you for past medical expenses, and often to the overall recovery if the lien is broad. In practice this means:
- Your gross recovery is the total settlement or award.
- Your attorney will subtract costs, attorney fees (per your fee agreement), and amounts the law requires you to pay to lien claimants.
- The remainder is your net recovery — the money you keep. Medical liens and subrogation claims reduce that net number unless they are resolved for less than billed amounts.
Key Washington-law point: hospital liens
Washington’s hospital-lien law allows certain health care providers to place a statutory lien on the proceeds of a claim that arises from an injury for which the hospital treated you. The statute sets out who may file, how a lien is perfected, and how the lien is enforced. For the exact statutory language and requirements, see: RCW Chapter 7.70. If a provider follows the statute’s rules, the lien can bind settlement proceeds and must be addressed before you receive your full recovery.
Medicaid / Medicare and public benefits recovery
If Apple Health (Washington’s Medicaid) or Medicare paid for some of your treatment, federal and state law typically permits those programs to seek repayment from your settlement. Federal Medicare recovery rules are administered through the Centers for Medicare & Medicaid Services: CMS: Coordination of Benefits & Recovery. Washington’s Health Care Authority also pursues recovery of benefits paid; you should expect a claim if public funds covered your care.
Practical effects and common outcomes
- Liens can significantly reduce your payout if you don’t identify and negotiate them early.
- Many providers will agree to a reduced payoff if you or your attorney negotiate — especially when the lien collector knows payment depends on your net recovery after attorney fees and costs.
- Sometimes lien holders accept a percentage of billed charges or a fixed flat amount to release their claim.
- If you don’t resolve liens before you sign release papers, you can remain personally liable to the providers for the debt even after the insurer pays the settlement to you.
What to do step-by-step
- List all medical providers, insurers, and public programs that paid for your care.
- Ask each for a written lien statement and an itemized bill showing amounts paid and outstanding.
- Notify your attorney promptly. A lawyer familiar with Washington personal-injury practice can identify statutory liens (RCW Chapter 7.70) and non-statutory subrogation claims.
- Do not sign settlement releases or accept your check until lien resolution is clear in writing.
- Negotiate reductions: many hospitals, insurers, and public agencies will accept less than billed amounts when you or your lawyer press for a settlement of the claim.
- Document the agreed payoff in writing and obtain lien releases before distributing funds.
Allocation of settlement funds and attorney fees
How attorney fees are calculated when liens exist can change the math. In Washington, fee agreements usually define how fees and costs are taken from the gross recovery. The order in which fees, costs, and liens are paid can change the effective hit from a medical lien. Good representation will explain whether a lien will be paid from the gross recovery or from what’s left after attorney fees and costs, and will try to maximize your net recovery.
When negotiation fails
If a claim holder refuses to negotiate or sues to enforce a lien, the case may need a court resolution. Courts consider the validity of the asserted lien, statutory compliance, and whether the claimed amount is reasonable. If you face litigation over a lien, consult a lawyer right away.
Disclaimer: This article explains general principles about medical liens in Washington. It is educational only and not legal advice. For guidance that fits your specific facts, consult a licensed Washington attorney.
Helpful Hints
- Start early: identify every possible lienholder as soon as you consider a claim.
- Get itemized bills and written lien statements for every provider and insurer.
- Ask for reductions — many providers will settle for less than billed charges.
- Don’t sign final settlement documents or cash a settlement check until liens are resolved in writing.
- Watch public benefits: Apple Health/Medicaid and Medicare have repayment programs and can seek recovery; contact the agencies listed below if those programs paid for your care.
- Keep receipts and records of payments or offsets you or insurers have already provided.
- Discuss with your attorney whether lien payoffs will come from the gross settlement or from your net recovery — that affects negotiations and your take-home amount.
- If a lien holder sues, preserve all medical and billing records and contact a lawyer immediately.
Useful links:
- Washington Revised Code of Washington (RCW) — Hospital liens: RCW Chapter 7.70
- Washington Laws & RCW search: app.leg.wa.gov/rcw
- Medicare recovery and conditional payments (federal): CMS: Coordination of Benefits & Recovery