What Are Medical Liens in a Motorcycle Accident Case?
Key Takeaways: After a motorcycle accident, costly medical care often leads to liens that let providers or insurers claim part of your settlement. In Colorado, protections like the common fund doctrine, make whole doctrine, and the six-month filing rule can limit what you owe. A skilled motorcycle accident attorney can negotiate reductions, challenge inflated charges, and help you keep more of your compensation.
Riding a motorcycle can be exhilarating. Cruising the open road on a bike allows you to soak in stunning views while enjoying the sunshine and fresh air. But the lack of protection provided by a motorcycle can come with a downside – you’re much more likely to suffer devastating injuries in the event of a motorcycle accident. Often, these injuries may require extensive and costly medical treatment. If you’re staring at a pile of medical bills after a motorcycle accident, you may be wondering how you’re going to pay for them.
Many medical insurance plans come with high deductibles that can still leave you responsible for a significant amount of money out-of-pocket to pay for your injuries and if you don’t have insurance, you may be on the hook for the entire cost of your treatment while you wait for reimbursement in a motorcycle accident lawsuit. This is why many medical providers will offer medical liens that allow you to delay payment for post-accident treatment until your lawsuit is resolved.
Medical liens after a motorcycle accident are quite common, and they can have a significant impact on the amount of money you receive as part of your settlement. For this reason, it’s critical to understand how medical liens work.
What Is a Medical Lien?
A medical lien is a claim placed on your future motorcycle accident settlement by a healthcare provider or insurance company. It ensures the lien holder will get repaid for the medical services provided out of your damage award. Medical liens are legally binding contracts that provide the security needed for a healthcare provider to agree to delay payment for the treatments you receive after your motorcycle accident. Once you receive your damage award, the lien holder will automatically be repaid out of your compensation before you receive any money.
Medical liens can be placed by a variety of parties, and it’s possible that you may have multiple liens depending on the specifics of your case. These parties can include:
- Doctors
- Hospitals
- Health insurance companies
- Auto insurance companies
- Medicare
- Medicaid
Why Are Medical Liens Common in Motorcycle Accident Cases?
Motorcycle accidents often result in more severe injuries than car accidents. These catastrophic injuries often require longer hospital stays and more specialists participating in your treatment. For example, it’s common to have bills for an ambulance, emergency room visit, trauma surgeon, orthopedic specialists, extended hospital stay and post-surgery physical therapy. This can create high medical costs which result in substantial liens against an eventual motorcycle accident settlement.
Types of Medical Liens in Motorcycle Accident Cases
There are several different types of medical liens that may be used after you’re injured in a motorcycle accident, and each one will impact your case differently. Understanding the differences between medical liens will help you prepare for the impact on your settlement and potentially help you negotiate better outcomes when it’s time to pay off the liens.
The most common types of medical liens used in motorcycle accident cases include:
- Hospital Liens – Hospital liens are the most common type of lien filed as part of a motorcycle accident. Hospitals are allowed to file a lien for the reasonable value of the medical services they provide. The term “reasonable value” can be subjective, which is why it’s critical to work with an experienced motorcycle accident attorney who can negotiate with the lien holder on your behalf.
- Provider Liens – Individual providers such as specialists, physical therapists and other healthcare professionals on your treatment team can also file separate liens if they’re not affiliated with the hospital providing your primary treatment.
- Health Insurance Subrogation – While not technically a lien, these work similarly to a medical lien. If your insurance company pays money upfront for your medical treatment, they may seek to get reimbursed from your motorcycle accident settlement through a process called subrogation.
- Medicare and Medicaid Liens – If your healthcare coverage is provided by one of these federal programs, any liens associated with payments they made must be repaid out of your settlement. There are strict federal regulations governing Medicare and Medicaid liens, and they often take priority over other lien holders.
- Auto Insurance Med Pay Liens – If you have Med Pay coverage on your motorcycle insurance policy, this coverage will help cover your medical bills regardless of who is at fault for the accident. However, once you recover a settlement from the at-fault driver, your insurance may seek to recover the money they paid for your bills out of your settlement.
Medical Liens Will Make Your Motorcycle Accident Case More Complicated
Medical liens will typically make your motorcycle accident case more complicated for a variety of reasons:
- Each provider can file their own lien, making the settlement process more challenging to sort out
- In many cases, you may be charged interest on your liens which will significantly drive up the cost of repayment
- The insurance company for the negligent driver may try to claim your medical bills were too high in an attempt to reduce the amount of money they have to pay, which can potentially impact your ability to pay off the lien if you don’t receive a settlement that covers the full amount that was initially agreed upon when you signed off on the lien
- If your insurance company covered the cost of your treatment upfront, they will seek to recover the amount they laid out from your settlement through a process called subrogation, which can reduce the amount of your total recovery
Colorado Medical Lien Laws Protect Motorcycle Accident Victims
Colorado has established a series of laws governing medical liens in personal injury cases. These laws help protect injury victims and minimize the chances that you’ll face significant financial repercussions due to medical liens associated with your motorcycle accident treatments. Many of these laws are nuanced and complex, and it’s critical to work with an experienced motorcycle accident attorney who can ensure they are applied properly to any liens associated with your case.
Common Fund Doctrine
Colorado adheres to the common fund doctrine, which helps promote fairness in personal injury settlements. It requires any party benefiting from your motorcycle accident settlement, such as medical lien holders or health insurance companies, to contribute proportionally to the attorney’s fees and additional costs associated with your case.
This doctrine is applied differently depending on whether the party seeking reimbursement is a true lien holder or simply getting paid back via subrogation:
- Medical Provider Liens and Hospital Liens – In general, this doctrine won’t be applied to direct lien holders who have provided medical services and are awaiting payment. In most instances, medical providers will be repaid for the full amount owed for their services without contributing to the attorney’s fees.
- Insurance Subrogation – Insurance companies (including Medicare and Medicaid) seeking reimbursement via subrogation will be required to contribute to the fund covering attorney’s fees and other costs associated with your claim. The amount they’re owed will typically be reduced by the same percentage of your attorney’s fees. For example, if your attorney receives 33% of your settlement as their fee, the insurance subrogation amount will be reduced by 33%, and that portion of their lien will go towards your attorney’s fees.
Make Whole Doctrine
Colorado also adheres to the make whole doctrine, which ensures that you are “made whole” (in other words, you receive full compensation) before your settlement is reduced to cover subrogation claims. If your full compensation doesn’t cover the total extent of your damages — either due to insurance policy limitations or the defendant lacking sufficient funds to pay the full settlement amount – insurance companies and other parties seeking reimbursement via subrogation will not be entitled to recover any money from your settlement, and you’ll keep the entire amount.
This doctrine generally doesn’t apply to medical provider and hospital liens, and these lien holders can often seek reimbursement from your settlement even if you don’t recover the full extent of your damages. However, the make whole doctrine can be a powerful tool that helps reduce what you owe insurance companies via subrogation in situations where you receive a partial or insufficient settlement.
Six Month Rule
Colorado requires hospital liens to be filed within six months of your last treatment. Liens filed after this deadline may not be enforceable. This can reduce your liability to lien holders who don’t stay on top of filing deadlines.
Additional Laws Impacting Motorcycle Accident Liens
Colorado has enacted several other laws to protect your rights in situations where your case may be impacted by medical liens:
- Lien holders must provide proper notice when they file a lien. Failure to provide proper notice may invalidate the lien.
- Before a medical lien is issued, the lien holder must inform you of alternate payment methods you can use, such as health insurance, auto insurance coverage (Med Pay) or workers’ compensation.
- Medical liens cannot be assigned to debt collection agencies. This helps protect your credit score in the event that you owe a significant amount of money to healthcare providers as part of a lien after a motorcycle accident.
Strategies for Reducing Medical Lien Amounts
Due to the significant impact medical liens have on your final settlement, it’s important to take steps to minimize the amount you owe on these liens. Working with an experienced motorcycle accident attorney is critical when seeking to reduce the amount owed on liens, since your lawyer will know the most effective strategies to help you keep as much of your settlement as possible.
Negotiate Lien Reductions
In many instances, you can negotiate a reduced amount with the medical lien holder. This is generally an effective tactic in situations where your settlement isn’t sufficient to fully reimburse all lien holders. Reduced payments will allow the lien holder to collect some money for the services they provided rather than spend years in litigation trying to collect the full amount with no guarantee they’ll collect anything from this process.
Challenging Unreasonable Charges
In some instances, lien holders may try to collect for inflated charges that exceed the amount that they’d accept from insurance companies. You can challenge these inflated rates to reduce the amount of your settlement that is taken by the lien holder. In order to successfully challenge unreasonable charges, you’ll need to work with medical billing experts who can demonstrate what reasonable charges should be for the services you received.
Pushchak Law Can Help After a Motorcycle Accident
If you’ve been injured in a motorcycle accident caused by the negligence of another driver, you may be entitled to compensation for your damages. At Pushchak Law, we can help protect your rights and ensure you receive the full compensation to which you’re entitled.
Brian Pushchak has made motorcycle accident cases a primary focus of his practice. He understands the complex issues impacting these cases, including the ways in which medical liens can affect your final compensation. If you have medical providers trying to get you to sign a lien agreement, Mr. Pushchak can review these agreements before you sign them to ensure they are fair and you’re not giving the lien holder more rights than they’re entitled to. He can also help you challenge unreasonable charges and negotiate lien reductions in order to ensure you keep as much of your settlement as possible.
Mr. Pushchak has developed a unique Informed Decisions™ Approach focused on helping you achieve the best possible outcome to your case. This approach helps you maintain control of the process from start to finish. Mr. Pushchak will talk to you about your desired outcome for your case to ensure his legal strategy recommendations are aligned with your goals. He’ll explain your options in detail, and you’ll have the ability to ask questions to ensure you understand all your legal rights and options. Mr. Pushchak will recommend the best strategy to achieve your goals, but you will always have the final say on how we handle your case. This ensures we’re always working for you and aligned with your needs throughout the process.
Contact us today to schedule a free consultation. Pushchak Law serves clients in Denver and the surrounding areas of Colorado.
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