Injury law has become far more complicated in recent years. Recent federal and state law changes have allowed health insurance companies and doctors to level financial claims directly against your personal injury settlement proceeds. If you do not have an attorney, insurance adjusters will typically pay these outside claims in full. They do not take steps to negotiate these claims down or to avoid these claims when they are not valid liens or settlement reductions.
Insurance adjusters are only worried about closing their case, and they are not willing to risk later financial obligations. Thus, they may settle your case for a promised amount, have you sign a release, and then hand your money over to doctors or health insurance companies. Before you agree to a settlement in private dealings with insurance companies, make sure that they have your net settlement check in hand. Also, have them carefully itemize all intended payments from settlement proceeds. You should know exactly where the settlement money is going before you agree to the lump-sum settlement and sign any release.
Attorneys increase client settlement proceeds by negotiating for the highest possible injury claim settlement and then by protecting your settlement from outside claims. The best personal injury attorneys make a huge impact on the victim’s bottom line payment by carefully confronting every outside claim against the victim’s settlement. Most victims are concerned with the exact amount of money they personally receive. A large settlement may be less desirable if most of the money will go to the victim’s health insurance carrier and then to pay unpaid medical charges or to reimburse employer’s short-term disability and long-term disability benefits plans. You or your attorney should investigate all of these outside claims, confirm the validity of each claim, refuse payment of invalid claims, negotiate reductions in valid claims, and thereby increase the net amount of money you receive at the close of the injury case.
The most common outside claims against injury claim money are as follows:
- Unpaid medical bills — Under N.C.G.S. 44-49 and 44-50, hospitals and other medical providers have a right to direct payment of at least some portion of unpaid medical bills from any insurance money paid to the injury victim.
- ERISA qualified health insurance plan — Most health insurance carriers have a right to be paid back when they pay health insurance benefits to cover accident-related medical bills. These liens can take the entire settlement.
- Medicare liens — Medicare currently has several proposals that may increase their liens against settlement money. Medicare liens must be dealt with to avoid loss of future Medicare or Social Security benefits.
- Medicaid liens — Medicaid’s lien currently cannot take the entire settlement. Recent legislative proposals threaten to change this rule. Medicaid’s liens must be scrutinized to remove unrelated medical charges.
- Child support liens — Unpaid child support can be claimed directly from settlement money if the child support enforcement representative learns of the settlement and notifies the adjuster or the attorney.
- Disability income benefit liens — If an employer-provided disability plan is qualified under the federal ERISA statutes, the disability insurer has a legal right to be paid back some portion of the benefits from the injury settlement.
- Veterans Administration liens — The VA provides health care to veterans at no charge. If they provide accident-related care, they will calculate medical charges and seek payment from an injury settlement.
- Vocational rehabilitation liens — If a local vocational rehab or social services organization provides health care or assistance to an accident victim, they are allowed to ask for payment for these services from settlement funds.
- Workers’ compensation liens — If the victim was working when the accident occurred, workers’ comp will pay for all medical care, lost wages, and other benefits. They have strong rights to collect from the injury settlement, and they can even retain counsel to take control of the victim’s case. Their claims should be carefully scrutinized. Discounts can be negotiated, and in some cases, the lien can be judicially waived by the court. The injured employee should avoid overpayment of workers’ comp liens.