Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.
Detailed Answer
1. Identify and Review All Medical Liens
Under the West Virginia Medical Care Recovery Act (MCRA), West Virginia Code Chapter 55, Article 7B (WV Code §55-7B-1 et seq.), health care providers who treat injured parties can file liens to recover medical costs. Before settlement negotiations begin, request an itemized list of all liens and outstanding medical bills. Verify each lien’s validity by checking the filing date and service dates, and ensure no lien has expired or been satisfied.
2. Prioritize Liens and Bills
West Virginia Code §55-7B-6 (lien priority) establishes the order in which providers get paid. Hospital liens take first priority, followed by physicians, pharmacies, and other medical vendors. Confirm this hierarchy to allocate settlement proceeds accurately.
3. Negotiate Reductions with Lienholders
Many lienholders accept negotiated payoffs at less than billed amounts. Start by contacting each provider or their billing department. Propose a lump-sum payment in exchange for a lien release. Obtain written confirmation of any agreed reduction before finalizing your settlement.
4. Address Government Subrogation Claims
If federal programs such as Medicare or state programs like West Virginia Medicaid paid medical expenses, they hold subrogation rights. Under the Medicare Secondary Payer Act and Medicaid rules, these agencies can claim reimbursement from your settlement. Contact the Centers for Medicare & Medicaid Services or the West Virginia Bureau for Medical Services to determine the amount owed.
5. Draft the Settlement Agreement Carefully
Your settlement agreement should detail how funds will satisfy each lien. Include an escrow or hold-back provision for any disputed liens. Clearly state the amounts to be paid and identify the recipients. Specify that the remaining balance goes to you, the injured party.
6. Obtain Court Approval and Disburse Funds
Some West Virginia courts require approval of settlement disbursements, especially for minors or incapacitated claimants. File your proposed order and settlement breakdown. Once the court signs off, distribute funds according to the agreement. Secure lien waivers from each provider after payment to avoid future claims.
Helpful Hints
- Request lien payoff statements early to avoid last-minute disputes.
- Keep an organized ledger for all payments and releases.
- Use escrow accounts to safeguard funds until liens are resolved.
- Confirm that any negotiated lien reduction is binding and final.
- Engage an attorney for complex lien situations or large claims.