Seeking fair and just compensation for your injuries involves understanding and negotiating your claim’s medical liens and subrogation interests arising from a North Carolina personal injury claim. Medical liens and subrogation interests are a significant obstacle to receiving the compensation you deserve, even after a settlement or award.
In essence, the goal of negotiating your medical liens is to attempt to reach an agreement or compromise with lien holders for a reduction in the amount of money owed to the lien holder. While not all liens are negotiable, the majority are, and those lien holders are often willing to consider a lesser amount. Negotiating a lien before your case settles will likely increase your net recovery and can save you money in the long run.
Negotiating your medical liens can often be as difficult as pursuing fair and just compensation from the insurance company. It is important to note that negotiating medical liens can be extremely technical, and should you need advice or guidance we would recommend contacting an experienced personal injury attorney as soon as possible. This article will provide you with an overview of the negotiation process and tips for negotiating your liens.
It is important that you consider the timing of when you should address your medical liens. It is often helps to handle and negotiate your medical lien before the settlement rather than after the settlement, if possible. Negotiating your medical lien, or at least knowing what the lien holders may be willing to accept as early as possible, will provide you with information regarding your actual recovery after expenses.
It is important to note that certain lien holders have more incentive than others to negotiate before final settlement, given that your ability to compensate the lien holder is drastically reduced if you decide to litigate and are ultimately unsuccessful in that endeavor.
Negotiating or resolving your liens is essential to being able to conclude your claim. Remember that you are obligated by law to reimburse lien holders as required by law. However, the only exception that exists is if the lien holder agrees in writing to accept a different amount than what they are legally permitted.
Generally, you should contact the lien holder in writing to negotiate your lien. If you have received a notice of lien, for example, by letter or some other form of documentation, you should refer to those documents for a point of contact. Also, when contacting the lien holder, it is a good idea to have your reference or claim number handy, as it will speed up the process of identifying the case or claim in their system.
The negotiating process often can be tedious and time-consuming. You will likely have to contact the lien holder several times to discuss the lien. Also, be prepared for a lien holder to be firm and hold their ground, as most do these negotiations on a daily basis. The negotiation process is just that, “a process,” so do not become discouraged. Be prepared to make several offers and counter offers. However, before you consider entering into the negotiation process, consider your legal obligations against what you believe you could have the lien holder accept as a full and final satisfaction of the lien amounts.
There are several different types of liens that can affect your settlement. Having knowledge about the types of lien attached to your recovery is essential. The list below provides a general description of what to expect in negotiating certain liens.
Physician’s Liens or §44-49 Liens
One of the most common liens or subrogation interests that can attach to your personal injury settlement or judgement are those allowed for in North Carolina Statutes by medical providers known as physician’s liens. In general, a physician’s lien is a healthcare/medical provider’s financial interest on the proceeds received in a personal injury settlement or judgment.
For example, Roger goes to the chiropractor and does not have insurance. The chiropractor agrees to treat Roger for his accident-related injuries so long as Roger pays the chiropractor out of his accident settlement or award pursuant to N.C.G.S §44-49.
Before paying a physician’s lien, it is recommended that you try to negotiate the lien amount, especially if the recovery does not cover the amount due. While physician’s liens look daunting, the statute (N.C.G.S §44-49) provides accident victims with several tools to ensure that the lien holder does not take the entire settlement or award as reimbursement of the lien. That being said, when your settlement does not cover your medical liens and several medical liens are attached, the medical providers will likely receive only their pro-rata share as defined by statute. Consider trying to negotiate this amount paid pursuant to the statute as a full and final satisfaction of all monies owed to the lien holder. The medical provider may be inclined to accept this amount and forgo pursuing the difference between what is owed and what is payable under §44-49.
Additionally, be aware of the requirements for the perfection of a valid medical provider’s lien. Medical providers with physician liens may not charge for medical records or bills, and if they do, then their lien may be invalid and may not attach to your North Carolina personal injury recovery. It is important to use this and every other tool you have to negotiate to your advantage.
For more information as it pertains to physician’s liens in North Carolina, please visit the following link.
Medicare and Medicaid Liens
Medicare and Medicaid liens are some of the most difficult to negotiate and dispute. It may be necessary to consider contacting an experienced personal injury attorney to assist with negotiating Medicare or Medicaid liens.
Medicare is unique in that reimbursement is required and reimbursement does not have a cap or limit on how much of your personal injury recovery can be taken. While determining what is owed to Medicare may be complicated, negotiating for a Medicare lien reduction involves a very specific and quantifiable process. For more information on Medicare Liens and the negotiations process, please visit the following Medicare Liens article.
Medicaid liens should be handled similarly to that of Medicare. While the laws governing the two are different, the dispute process is similar. However, Medicaid liens differ from Medicare liens in many ways, including the fact that they are statutory capped, unlike Medicare. Furthermore, Medicaid permits reductions based on hardship arguments, which have to be well-established and significant. For more Medicaid lien information and negotiation strategies, please visit the Medicaid Liens article.
Teachers’ and State Employees’ Health Plan (SEHP)
SEHP liens were formed in 2004, and as such, negotiating this type of liens is still an evolving process. SEHP plans, however, have indicated a willingness to negotiate a lien when it would be unfair to require the accident victim to pay the full lien amount. Utilizing the fairness arguments located in the “Negotiating Keys and Tips” section below is an essential portion of proving unfairness and achieving a suitable compromise. For more SEHP lien information and negotiation strategies, please visit the SEHP liens article.
Employee Retirement Income Security Act (ERISA)
The Employee Retirement Income and Security Act, known as ERISA, is a complex set of federal laws that allows employers to establish self-funded insurance policies that are not subject to North Carolina’s insurance laws. Unfortunately, there are not many negotiating tactics available when dealing with ERISA liens. However, those strategies that do exist are effective. Negotiations with ERISA should begin very early in your claim process, as they may seek full reimbursement once a settlement agreement is reached or litigation has begun. To learn more about ERISA liens, please visit the following ERISA liens article.
Workers’ Compensation Liens
Negotiating a workers’ compensation lien can be difficult, as most lien holders are unwilling to negotiate. Fortunately, in North Carolina there are several highly effective techniques for seeking a lien reduction for your workers’ compensation lien. North Carolina law allows for a Superior Court Judge to reduce or eliminate a workers’ compensation lien upon motion. The judge will access the facts and determine what is “equitable” in making his or her decision to reduce or eliminate the workers’ compensation lien. The Superior Court Judge, however, may only reduce or eliminate the lien when there has been a final settlement agreement for your workers’ compensation claim between you and the third party. For further information as it pertains to workers’ compensation liens, please visit the workers’ compensation liens article.
TRICARE is a federal lien and therefore governed by federal law. Generally, TRICARE permits negotiation of liens through the filing of a waiver or reduction request for undue hardship. Although TRICARE does not have exact guidelines as to what constitutes “undue hardship,” you will want to argue the fairness arguments located in the “Negotiating Keys and Tips” section of this article (number 3). For further information on TRICARE liens, please visit the TRICARE liens article.
State Vocational and Rehabilitation Lien
The key initiatives of the State Vocational and Rehabilitation program are to adequately rehabilitate the injured. Thus, when the recovery proceeds do not fully cover the lien amount, the law may allow for a total or partial waiver of the remaining balance. The waiver generally occurs when the Division of Vocational Rehabilitation finds that enforcement of the lien hinders the injured party’s rehabilitation. For further information on State Vocational and Rehabilitation liens, please visit the State Vocational and Rehabilitation liens article.
Child Support Liens
Child support liens are unique because the negotiations are usually with the parent of your child. Generally, the lien is best negotiated when the lien amount is more than your recovery. Under these circumstances, you may not receive any of the proceeds. When this occurs, you will want to contact whomever is seeking the child support lien for a reduction. It is paramount that you explain to the lien holder that the case may not be worth pursuing unless they reduce the lien amount. The lien holder may negotiate the amount so that they at least receive some compensation. For further information, please see our article “Child Support Liens and How They May Affect Your Personal Injury Settlement or Judgment.”
As previously mentioned, it is important to try to negotiate your lien amounts, when possible. Most often, the negotiation will depend on your ability to convince the lien holder that there is a good reason for your request. While several of these processes require formal hearings before judges, the arguments are effectively the same. It is important to note that you may not always be able to reach a compromise over the lien amounts. However, should you require assistance, it is highly recommended that you consult with a North Carolina personal injury lawyer as soon as possible. An overview of the tried and true techniques is listed below and may aid you in your attempts to see lien reductions.
The time before a settlement has been reached is when you have all your leverage in the negotiation with the lien holder. It is essential to determine your lien obligation as accurately as possible so that you may negotiate effectively. However, not all medical lien holders will be willing to negotiate their lien amount before the settlement. If your lien holder is unwilling to negotiate, it may be advantageous to stress the reality that the lien holder’s ability to receive compensation is dependent on what the law will permit as well as their ability to seek a judgment for money owed after that personal injury is resolved. Use this to your advantage, if possible.
Medical lien holders often include charges for treatment that is not accident related. For example, hospitals often charge for room and board and other service fees or fail to accurately present the bills and records related to your injuries. A comprehensive medical billing audit will establish what medical treatment was related to your collision and whether the treatment was reasonably priced. It is important to establish that all unrelated or unreasonable medical expenses should not be considered part of the medical lien.
Making a fairness argument can be effective in getting a lien holder to reduce their lien. Lien holders are humans, so making fairness arguments may strike a chord. Also, remember to be kind, and try to build a rapport with whomever holds the lien. Some tried and true arguments are:
When negotiating, it is important to be prepared and knowledgeable about the subject about which you are negotiating. Most lien holders negotiate for a living. Showing that you are knowledgeable and well-prepared will prove to them that you are serious. Furthermore, being aware of your rights can protect you from being taken advantage of by a lien holder. Know how much you are obligated to pay and what payments may be required to satisfy non-lien obligations.
Also, it is always a good idea to know a little about who you are negotiating with. Take a look at their website for mission statements and remind them of their mission, which may be some form of helping those in need.
The tactics listed above are by no means exhaustive, and an experienced personal injury attorney can assist you in ensuring that you receive the maximum net amount from your recovery. Negotiating with a medical provider can be difficult and stressful; thus, hiring a personal injury attorney may help alleviate such stress and ensure that your recovery reaches its fullest potential.
Once an agreement is reached with the lien holder, get the agreement reduced to writing. Remember, nothing is finalized until you have it in writing and it is signed by both parties. A sample lien reduction agreement can be found here. Be mindful to correctly identify the parties and list the original lien amount and what the reduced lien amount is after the negotiation. Keep a copy of the signed agreement in a safe place.