Lien Resolution 101
A good percentage of people in the legal industry are unfamiliar with the term “Lien” or “Lien Resolution”. Throwing in “Rights of Reimbursement” and “Subrogation Rights” can further muddy the waters. Let’s break down these terms and clarify the process.
Lien: A lien is money owed to a third party for a debt. After a case is settled, it prevents distribution to the plaintiff until the lien is paid, released, or waived. Liens can be placed by hospitals and providers, as well as a few Medicaid organizations. They are generally not placed by private health insurance companies, Medicare, or most Medicaid programs.
Medicare Liens: This is a tricky one. Medicare doesn’t technically put liens on cases. These are actually Medicare-Rights-To-Reimbursement. This right is so power that we often call it a “Medicare Super Lien.” We call it this because it takes precedence over all other payment rights (although plaintiff attorneys’ fees are factored as procurement costs and allowed in full).
Subrogation: A legal technique under common law by which one party steps into another’s shoes. Normally, this involves the insurer stepping into the shoes of the injured party to have the benefit of the injured party’s rights and remedies against a third-party such as a defendant. This means that the Insurer could act as a plaintiff in a suit against Defendant, or even intervene in Injured Party’s suit against Defendant. Most private insurers have rights of subrogation written into their contracts.
Right of Reimbursement: A contractual or statutory right where one party need not do anything and the other must repay that party. Medicare, discussed above, is the easiest example. Many private insurers, Medicaid programs, ERISA plans, and others have this powerful right of reimbursement in any injury scenario. This right usually exists upon settlement or judgment in an injury case.
It doesn’t matter if you’re dealing with Liens, Rights of Reimbursement, or Subrogation, the goal is always the same. Protect your clients’ rights and resolve the lien. Contact MASSIVE’s experts if you would like to schedule a consultation to help understand the process or review your cases.