Disclaimer: This article is for informational purposes only. It does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
Detailed Answer
When you reach a settlement in a Wisconsin personal injury case, you must clear any hospital and insurer liens before distributing funds to the client. Wisconsin law governs both hospital liens under Chapter 655 and insurer subrogation rights under Wis. Stat. § 632.24. Follow these steps to identify, address, and resolve liens effectively:
1. Compile a List of Potential Lienholders
Start by reviewing the client’s medical records, billing statements, and insurance policies. Identify all hospitals, clinics, and healthcare providers that treated the client. Note any private or government health plans (e.g., Medicaid or Medicare) that may assert subrogation or reimbursement claims.
2. Search for Recorded Hospital Liens
Under Wis. Stat. ch. 655, hospitals and certain healthcare facilities may file liens in the county where treatment occurred. To verify:
- Contact the county clerk’s office in each county where treatment took place.
- Search online records if the clerk provides digital access.
- Request a certified lien search report to confirm any filings.
See Wis. Stat. ch. 655 at docs.legis.wisconsin.gov/statutes/statutes/655.
3. Notify Insurers of Potential Subrogation Rights
Private health insurers and government programs (e.g., Medicaid) may assert reimbursement claims under subrogation statutes. In Wisconsin:
- Review Wis. Stat. § 632.24 for insurer subrogation procedures and notice requirements. (Wis. Stat. § 632.24).
- Send a formal notice of settlement and demand for subrogation amount to each insurer.
- Ask for an itemized statement of benefits paid and any applicable reductions or credits.
4. Obtain Lien Statements and Verify Accuracy
Once you identify lienholders, request detailed statements showing:
- Dates of treatment and amounts billed.
- Payments made by insurance or the client.
- Balance claimed as a lien.
Verify the amounts against the settlement range and ensure the lien is reasonably related to the injury at issue.
5. Negotiate Lien Reductions or Credits
Lienholders often accept reductions for prompt payment or when a third-party recovery is limited. To negotiate:
- Present a copy of the settlement demand and adverse party’s offer.
- Cite any contractual write-offs or discounts permitted under the provider’s billing policy.
- Propose a percentage reduction—common in Wisconsin is 20%–30% off the billed amount.
6. Secure Lien Releases Before Disbursement
After negotiation, obtain written releases or satisfaction documents from each lienholder. Ensure releases:
- Identify the patient, case name, and case number.
- State the exact sum accepted in full satisfaction.
- Are signed by an authorized representative of the lienholder.
7. Prepare Settlement Disbursement Statement
List gross settlement, attorney fees, costs, and all lien payments. Provide this statement to the client for review and signature. Keep detailed records in your trust account file.
Helpful Hints
- Begin the lien identification process early—ideally when you file suit.
- Track deadlines for hospital lien filings (usually within 90 days of last treatment).
- Use written engagement letters to clarify client responsibilities for liens.
- Keep all correspondence and negotiated terms in one organized file.
- Consider hiring a lien resolution specialist if multiple providers or insurers are involved.