Disclaimer
This article is for general informational purposes only and is not legal advice. I am not a lawyer. For advice specific to your situation, consult a licensed Washington attorney experienced with personal-injury settlements and medical liens.
Detailed Answer — How medical and chiropractor liens can affect your Washington settlement
Short answer: Possibly. Medical providers, hospitals, health insurers, and government benefit programs can assert claims against (or require repayment from) the money you obtain from a personal-injury settlement. Whether and how much will be deducted depends on the legal basis for the lien, whether the claimant has a statutory lien, whether the provider or insurer enforces subrogation, and how well your attorney negotiates payoffs.
Types of claims that can reduce your settlement
- Statutory hospital liens: Washington’s Hospital Lien Act creates a statutory lien that may attach to a judgment or settlement for hospital, nursing, or medical care. That law gives hospitals a formal mechanism to claim payment from a recovery. See Washington’s Hospital Lien chapter: RCW Title 7, Chapter 70.
- Provider liens and charging liens: Some providers (including chiropractors) rely on written assignments, contracts, or equitable/charging liens to claim a portion of a recovery. Whether a chiropractor can enforce a lien depends on the facts (was there an assignment of benefits or written agreement?) and applicable Washington law.
- Health-insurer subrogation and ERISA plans: Private insurers or self-funded ERISA plans that paid your medical bills often have a contractual or statutory right to be reimbursed from your settlement. ERISA plans may pursue reimbursement under federal law; ERISA rules can affect how disputes are resolved.
- Medicare and Medicaid (Apple Health) recovery: Federal law (Medicare Secondary Payer rules) and state Medicaid recovery rules require repayment to Medicare or Washington Apple Health when those programs paid for care related to your injury. You must report the settlement to Medicare and resolve conditional payments. Washington’s Health Care Authority handles Medicaid recovery; see their subrogation and recovery information: Washington HCA — Medicaid recovery and subrogation. For Medicare conditional payments and settlement reporting guidance, see CMS: CMS — Coordination of Benefits and Recovery (Medicare).
How these claims typically affect the money you receive
In practice, liens and reimbursement claims can reduce the net amount you keep from a settlement. Common steps and realities include:
- Providers or insurers send written demands for payment or file liens/claim notices.
- Your attorney reviews the demands, verifies services, and negotiates reductions. Medical bills and asserted lien amounts are often negotiable.
- Government programs (Medicare or Apple Health) typically require formal notice and a specific process for resolving conditional payments or recovery demands; these processes can take time and often require separate submission to the agency.
- Courts or opposing parties sometimes require funds to be placed in escrow or a court-supervised account until liens are resolved, especially in cases involving minors or disputed claims.
Specific Washington law note
Washington’s Hospital Lien Act (see RCW Title 7, Chapter 70) gives hospitals a statutory claim against recoveries for care they provided. For other providers (such as chiropractors), the ability to claim a portion of the recovery depends on contract law, equitable lien principles, and the specific paperwork (e.g., assignments or written authorizations) you signed. Because these different legal routes have different formal requirements and defenses, the exact outcome varies case by case.
Practical timeline and what usually happens before funds are released
- You (or your attorney) receive the settlement offer and confirm all payoffs required.
- Providers and insurers submit payoff demands or lien statements. Government agencies (Medicare/Apple Health) must be notified and may issue a conditional-payment amount.
- Your attorney negotiates reductions and obtains written payoff letters and releases from lienholders.
- Funds are distributed after deductions for attorney fees, costs (per your fee agreement), and resolved lien payoffs. If liens remain unresolved, funds may be placed in escrow or a court may be asked to interplead funds.
Helpful Hints
- Do not sign a settlement release or accept funds until you and your lawyer know what liens exist and how they will be handled.
- Ask every medical provider and insurer for a written, itemized payoff demand showing the legal basis for the claim as soon as you know a settlement is likely.
- Tell your attorney about any health insurance, Medicare, Medicaid (Apple Health), or workers’ compensation benefits that paid bills — those programs often have recovery rights.
- Contact Medicare and Washington’s Health Care Authority early if those programs paid bills. Resolving Medicare conditional payment or Medicaid recovery can take weeks or months without early notice. See CMS and Washington HCA links above.
- Expect to negotiate. Providers often accept a reduced lump-sum payoff rather than their full billed amount.
- Ask your attorney to obtain written releases or payoff letters before disbursing settlement funds. Never rely on verbal assurances.
- If lienholders won’t agree, consider asking the court for an interpleader, a hearing to determine priority, or placing funds in escrow until the dispute is resolved.
- Review your contingency fee agreement to understand whether attorney fees are taken from gross or net recovery — that affects how much remains to satisfy liens.
- Keep detailed records of communications, bills, and payoff letters. Document everything in writing.
- If you have an ERISA plan or a complex insurer claim, work with an attorney familiar with federal subrogation law and ERISA reimbursement rules.
Next steps
If you expect a settlement, contact a Washington personal-injury attorney who will: (1) inventory potential liens; (2) get written payoff amounts; (3) negotiate reductions; (4) coordinate with Medicare/Apple Health; and (5) protect your net recovery by using escrow or court procedures when needed.
For statute background, see Washington’s Hospital Lien chapter: RCW Title 7, Chapter 70. For Washington Medicaid/Apple Health recovery guidance, see: Washington HCA — Medicaid recovery and subrogation. For federal Medicare reporting and conditional payment rules, see: CMS — Coordination of Benefits and Recovery.
Again — this is not legal advice. Consult a licensed Washington attorney to evaluate the liens in your specific case and to protect your settlement funds.