What are ‘liens’ that have been placed on my settlement?

In the personal injury accident, “liens” or “subrogation liens” are an amount of money, hold or claim against your personal injury settlement or jury reward. These “liens” represent an amount of monies that have been paid to you as part of your accident. For example a medical lien is a formal written agreement between a patient and doctor. The doctor agrees to perform necessary medical treatments in return for a promise on the part of the injured patient to pay the bill once their personal injury claim is resolved. It is important to note that few doctors will agree to perform services on a lien basis unless the patient has retained an attorney. Having retained an attorney is a critical factor with medical liens, as the attorney will be the signatory to the lien agreement.

The attorney will act in a fiduciary capacity, or position of trust, to the doctor and protect his right to payment. A common misconception of the lien agreement is that the doctor’s payment is contingent on the outcome of the case. While it is common for attorneys to perform legal services on a contingent fee basis, doctors do not perform medical care dependent on the outcome of the personal injury case. The lien is simply the doctor’s agreement to await payment until the accident or injury case comes to an end. At such time the payment for medical services becomes due.

Other types of liens exist for benefits received that have helped you through your injury. If you had a workers compensation case and received benefits such as for temporary lost wages or medical treatment, and you settle a related personal injury case, the workers compensation insurance company will be entitled to a return of about 2/3 of what they paid out on your claim. This is commonly referred to as a “workers compensation lien”.

On that note, if you received medical benefits from the federal Medicare program for treatment of injuries sustained in an accident, and you settled a related accident lawsuit, Medicare will have a lien on that. This is commonly referred to as a “Medicare lien”.

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