Liens are where your net recovery is actually decided. A larger settlement with liens paid in full can leave you with less than a smaller settlement with liens reduced, and the Law Office of William Bruzzo handles that side of a case directly for injured clients in Orange County.

What Is a Medical Lien in a California Injury Case?

A medical lien is a claim against your settlement money, not usually a judgment against you personally.

The arrangement exists so people can get treated after a crash without paying up front. A hospital treats you, a health plan covers your care, or a provider agrees to wait. In exchange, they are repaid out of whatever you recover from the person who caused your injuries.

What Types of Medical Liens Can Attach to a Settlement?

Several different kinds of medical lien can attach to a California injury settlement, and they are not interchangeable. The type controls how much room there is to reduce it.

• Hospital liens. The Hospital Lien Act, at Civil Code sections 3045.1 through 3045.6, gives a licensed California hospital a lien on your recovery for emergency and ongoing care after an accident.
• County hospital liens. County facilities assert liens under a separate statute with its own priority rules.
• Medi-Cal and Medicare. Both carry statutory recovery rights, and Medicare’s recovery process follows federal procedures that leave little flexibility.
• TRICARE and VA. When federal programs paid for care, the government can recover from the third party portion of a settlement, which is one of several ways TRICARE affects an injury claim.
• Private health plans. Reimbursement rights vary by plan, and plans governed by federal law are generally harder to reduce.
• Workers compensation. If the same injury produced a comp claim, that carrier has its own reimbursement rights. The Hospital Lien Act does not apply to care covered by workers compensation.
• Provider liens and letters of protection. A contract between you and the provider, and usually the most negotiable of the group.

Sorting out which of these apply is the first real task in a case, because you cannot value a settlement without knowing what comes out of it.

How Much Can a Hospital Take From Your Settlement in California?

A hospital cannot take your entire settlement, and California’s Hospital Lien Act is specific about the limits.

Under Civil Code section 3045.1, a hospital lien reaches only the reasonable and necessary charges for care connected to the accident. It does not automatically equal whatever the hospital printed on its bill, and hospital billing rates run far above what any insurer actually pays for the same service.

Section 3045.4 sets the ceiling. An insurer paying a settlement is exposed to the hospital only up to what can be satisfied out of 50 percent of the money due under the judgment, compromise or settlement, after any prior liens are paid.

Notice matters too. Under section 3045.3, a hospital lien is not effective unless the hospital delivered or mailed a written notice, containing specific information the statute lists, to each party alleged to be liable before any money is paid to you.

Can Medical Liens Be Reduced or Negotiated?

Medical liens can frequently be reduced, though how much room there is depends on who holds the lien.

Provider liens and hospital charges usually offer the most, because the gap between billed rates and accepted rates is so wide. Private plan reimbursements sit in the middle. Government liens follow their own procedures and offer the least.

Two arguments do most of the work. The first is that the charges are not reasonable and necessary, which is where a line by line review of the billing helps, since duplicate charges and services unrelated to the crash are common. The second is that you should be made whole for your losses before a lienholder collects.

Timing matters as much as the argument. An Orange County personal injury lawyer negotiates liens before a settlement is finalized, because the leverage disappears once the money is agreed on.

Why Your Settlement Amount Is Not What You Keep

Your settlement amount is not what you keep, because fees, costs and liens all come out of it before you see a dollar. Two examples make the point, both using a one third contingency fee for illustration.

Settlement A: $100,000, liens paid in full. Fee of $33,300, costs of $2,000, a $40,000 hospital lien and an $8,000 health plan lien. You keep about $16,700.

Settlement B: $85,000, liens negotiated. Fee of $28,300, costs of $2,000, a hospital lien reduced to $18,000 and a health plan lien reduced to $4,000. You keep about $32,700.

The smaller settlement paid nearly twice as much. That is what happens when the lien work gets done, and it is the number that should be answered when someone asks what a case is worth.

What Happens If a Medical Lien Is Ignored?

An ignored medical lien does not go away. Under Civil Code section 3045.5, a hospital has one year from the date of payment to sue the party that paid you without satisfying its lien.

That is why liens are resolved before anything is signed, and why lien work runs alongside the rest of a case rather than waiting on how long an injury case takes in Orange County.

Talk to an Orange County Personal Injury Lawyer Before You Sign

What you take home depends on what happens to the liens, and that work has to start before a settlement is finalized. Call the Law Office of William Bruzzo at 760-307-4233 or contact us online for a free consultation. Mr. Bruzzo has practiced law for more than 30 years and negotiates liens himself rather than leaving them to the end of a case.