A Guide to Personal Injury Liens and Subrogation Interests

Understanding how insurance liens and subrogation interests work when securing compensation for a personal injury claim is vital to your recovery and well-being. Liens and subrogation interests are a complicated aspect of personal injury law, and often affect the amount of the settlement or judgment recovered. You or your personal injury attorney must be attentive and diligent when determining whether there are any liens attached to your claim and how they could affect your recovery.

By definition, a subrogation interest, or lien, is a legal action that gives a third party the right to receive reimbursement directly from your settlement or judgment in a personal injury claim. For example, if you were injured in a car accident caused by another driver, your health insurance provider could seek repayment for your care from compensation paid by the other party’s insurance company.

Following an accident, various providers may seek reimbursement for expenses related to your personal injury if someone else is found liable. Though vehicle accidents are common sources of these liens, premises liability claims against a property or business owner can also warrant subrogation actions in certain circumstances.

Every entity that paid for your care or damages may lay claim to a portion of any settlement or judgment you obtain. Liens or subrogation interests are most often asserted by medical providers, Medicaid, Medicare, and health insurance plans as we outline below:

One of the most common types of liens is attached through a medical provider, often called a physician’s lien. This essentially allows someone hurt in a truck accident or car crash to receive medical care ‘on credit.’ The physician’s office, hospital, emergency room, or other healthcare professional who provides medical services can later request reimbursement through a lien interest. For this personal injury lien to be valid, the reimbursement demanded must be related to the injury claim, and the medical provider must have “perfected” their lien. A lien is considered perfected under North Carolina law when it provides you or your personal injury attorney the following:

• All medical records and itemized bills related to the claim
• A written notice of the lien amount claimed

If the lien isn’t perfected, then no reimbursement is required.

Once an injured party accepts Medicaid coverage to pay for their injuries, a lien automatically attaches to any settlement or judgment resulting from a personal injury claim. Potential Medicaid liens generally cannot exceed one-third of the total settlement or judgment amount.

Similar to a Medicaid lien, a Medicare lien automatically attaches to a settlement or judgment once an injured party accepts coverage. Medicare liens hold the highest priority and must be satisfied before any other interests. If any potential Medicare lien exceeds half of the total settlement or judgment amount, then any all other liens may be destroyed.

Another common type of personal injury lien our lawyers encounter comes from health insurance companies. If a health insurance plan covers the cost of an injury that is someone else’s fault, they will often seek reimbursement through a lien. The health insurance policy must expressly state that the lien is allowed. Typically, there must also be a statutory basis for asserting the lien. Most privately funded insurance policies cannot assert a lien, whereas federal, state, or otherwise publicly funded insurance policies usually can. In some instances, health insurance liens cannot exceed half of the total settlement or judgment amount after the deduction of attorney’s fees.

Lawyers are crucial to your recovery from a personal injury and can assist in identifying and settling liens for health insurance claims. Under North Carolina law, plaintiff attorneys are required to pay off any liens attached to their client’s personal injury settlement or judgment. But attorneys can use many strategies to mitigate and fight liens that may be attached to your personal injury claim to maximize your recovery. The majority of lien amounts are negotiable, some can be limited by court order, and some are automatically limited if you have a lawyer to assist in the personal injury claim. The attorney for your case can also review health insurance claims and advise you on fake liens and claims for subrogation.

Find an attorney who understands subrogation interests by definition and in practice so you’ll have a valuable resource by your side. Miller Law Group has years of experience representing individuals for personal injury claims in and around Raleigh, North Carolina. If you or a loved one has any concerns regarding liens or subrogation interests, contact Miller Law Group for a free consultation.