Under Missouri law, healthcare providers like doctors, chiropractors, hospitals, and physical therapists are permitted to place “liens” on your case instead of billing your health insurance directly. Based on the law, Missouri healthcare providers can refuse to submit their bills to your health insurance company and can, instead, choose to place a “lien” on the proceeds of your settlement or jury verdict. What this means for healthcare providers is that they do not have to take the standard adjustments to their bills that are part of the contract they may have with your health insurance company.
For example, if you have health insurance, your heath insurance provider may agree to have a medical provider “in network” (permitted by the company) only if that medical provider agrees to take a discount on the services it provides you. So, instead of requiring $1,000.00 for an MRI, the healthcare provider has an agreement with your health insurer to accept $400.00 instead. It’s a win-win for the health insurance provider and medical provider — the health insurance pays a lower amount for the MRI and the medical provider gets to treat patients, like you, with a guaranteed payment for its services.
What exactly does a “lien” mean for you, though?
Well, remember how the medical provider had to take a $600.00 loss for the MRI by billing your health insurance provider? Instead of doing that, it can choose to place a lien on the proceeds of your settlement or jury verdict for the full amount ($1,000.00) of the MRI without taking the health insurance write-off. In order to place a lien on your settlement or verdict, the medical provider must send a notice via certified mail to the other driver’s car insurance company and comply with the requirements of the Missouri law. When the other driver’s insurance company receives this lien, it is required to make sure that the lien is paid. In other words, before your settlement is complete and before you are paid, the medical provider’s lien has to be dealt with. If the lien is not paid, the the medical provider can sue you or the other driver’s insurance company directly for its bills.
Okay… I think I understand how this works, but how does this affect my case?
First, every situation is unique. If you do not have health insurance, or have a high deductible, the healthcare provider lien statute means that you won’t have bills piling up from medical providers if the provider agrees to place a lien on your case rather than bill you directly. This allows you to treat for your injuries without having to worry about the bills affecting your credit or worry about a lawsuit from the provider to collect its bills.
Additionally, the other party’s insurance adjuster will typically use a complex computer system to determine the amount of the insurance company’s offer. Part of the information that goes into that computer system is the amount of your medical bills. Even if the adjuster doesn’t use a computer system, a major factor in determining how much compensation you will receive is related to the amount of your medical bills. With the lien, the adjuster sees a $1,000.00 MRI bill instead of a $400.00 bill. As a result, demands and offers are typically higher when liens are placed on cases because the liens will not have adjustments.
One last very important thing to note is that when providers take the risk of choosing to place a lien on your case, they do so knowing that knowledgeable attorneys will do everything they can to reduce the size of your lien. In fact, Missouri law requires that liens be reduced in situations where the liens stand to take a large portion of your settlement funds. In that situation, all of the medical providers have to share in 50% of your proceeds after the attorney fee is applied, meaning that you get 50% of the recovery as well after the attorney fee and expenses. This means your medical bills are paid and you still get recovery for your injuries. Again, every situation is unique and you should talk with an experienced attorney if you have a lien placed in your case to see if a reduction is possible.
A few extra things to consider when dealing with liens is that when the client wants the medical provider to bill his/her health insurance company, instead of placing a lien on his/her settlement, then your attorney should send a letter demanding that the medical provider do so. Under Missouri law the medical provider can do what it wants, but a strongly worded letter from a law office occasionally convinces the medical provider to bill your health insurance instead of applying a lien. Also, a medical provider cannot bill your health insurer AND place a lien. It must do one or the other!
KEY NOTES ABOUT LIENS:
- Healthcare providers can choose to bill your health insurance company for medical care or choose to place a “lien” on your case”;
- A lien allows a medical provider to bill the full amount for its services and requires repayment at the time of settlement;
- A medical provider can sue the other driver’s insurance company and you directly for the full amount of its bill if the lien is not paid;
- Liens are helpful for people with no health insurance, high deductibles, and are also helpful to show just how costly your medical care was/is when negotiations occur with the other driver’s insurer;
- In most situations, liens can be reduced drastically;
- A medical provider cannot bill your health insurer and place a lien on your case. It must do one or the other!
Understanding how healthcare provider liens work can be very difficult — it’s sometimes like drinking water through a firehose. However, the experienced car accident attorneys at the Law Office of Mike Campbell work with healthcare provider liens on a daily basis and know what your rights are and what your options are under Missouri law. If you have a lien placed on your case, or want to know to know more about what a lien means for your case, don’t hesitate to call our office for a free consult to discuss.