Medical Liens in Personal Injury Cases 

What Is a Medical Lien?

A medical lien is more than an agreement. It’s a legally binding contract that gives healthcare providers the legal right to seek reimbursement from an injured party’s compensation. When you sign this agreement, the provider will be paid before the funds are distributed to you. 

If an injured party’s insurance company covers medical expenses, it can also seek to be reimbursed from the settlement. This legal right is called subrogation. It prevents injured people from getting paid twice — when their insurer covers bills and when the at-fault party’s insurer compensates them.  

Several laws protect injured victims in such an instance, particularly the Made Whole Doctrine (C.R.S. § 10-1-135). Under this law, reimbursement or repayment of benefits is not allowed until the policyholder is fully compensated for all damages incurred. 

Moreover, if Medicare or Medicaid covers medical expenses for an injured party, they have a right to be reimbursed from any future settlement or judgment. These government programs are typically used in personal injury cases by eligible injured individuals with no insurance or after the primary payer pays up to its limits. 

How Medical Liens Are Created 

Before a healthcare provider (a hospital or physician) enters into an agreement with an injured party in Colorado, certain steps must be followed. The House Bill 21-1300, which was passed and signed into law in 2021, establishes the process to be observed, substantially protecting injured individuals in Colorado. 

According to this law, certain crucial details must be disclosed to the injured person, including: 

• Other potential options for payment, including their health insurance or workers’ compensation. 
• The lienholder isn’t a health insurer. 
• The lien only covers usual and customary charges. 
• In the absence of fraud or misrepresentation by the injured person, the patient will not be liable to the lienholder if they do not receive a settlement. 
• In the absence of fraud or misrepresentation by the injured person, the patient will not be liable to the lienholder if they receive a settlement that is less than the full amount of the lien. 
• The lienholder cannot assign the lien to a collection agency or debt collector. 

After disclosing these details, the provider can give the patient an agreement, typically a Letter of Protection (LOP), to sign, effectively creating a medical lien. The hospital is required to file the lien in the recorder’s office in the county where the facility is located within 180 days after the patient is released. It also needs to mail the injured party or their insurer a notice of the filed lien. 

Before pursuing a lien, all licensed hospitals are required to first identify any property and casualty insurer and primary medical payer of benefits of the injured person and submit all reasonable and necessary charges to them. If no payers of benefits are identified for the injured person, a lien can be established and pursued. If a payer of benefits is identified after a lien is created, a hospital is required to make good-faith attempts to submit all reasonable and necessary charges to them.  

If your insurance company pays your medical bills, it will send a formal notice of lien to you and your personal injury attorney, detailing the medical bills and the amount they are claiming. 

If Medicare or Medicaid covers your medical expenses, an automatic statutory lien will be created on your settlement. However, you will sign authorizations and agreements. 

Various parties can also place a medical lien on an injured party’s settlement. You may have a medical lien from a hospital, a doctor, a physical therapist, a chiropractor, and your insurer.

Addressing Liens In Settlement

Medical liens must be satisfied before settlement funds are distributed. Your attorney reviews and negotiates these balances, ensuring you receive the maximum possible compensation.

Managing Liens During Litigation

In litigation, medical liens still need resolution before final judgment distribution. Attorneys consider these liens when negotiating settlements or preparing for trial.

Why Choose Our Personal Injury Law Firm?

Bachus & Schanker is led by top-rated personal injury attorneys recognized among the best in Colorado. With decades of experience and thousands of cases handled within Colorado and nationwide, our team brings a proven track record of results to every case. They have represented clients in accident cases involving complex medical liens and healthcare reimbursement disputes across Colorado and nationwide.

At our firm, hands-on case management and personalized attention are central to how cases are handled. Attorneys remain directly involved throughout the process, with a focus on responsiveness, attention to detail, and clear communication at every stage of the case.

The benefits of working with our legal team include:

• Personal injury accident cases taken on a contingency fee basis – no legal fees unless we win your case
• Support of our victim advocates team
• Personalized attention from attorneys who understand personal injury accidents law
• Proven track record of maximizing settlements and managing medical debt for clients
• Experience handling cases in Colorado and across the United States

When you need experienced legal representation to handle the complexities of medical liens and protect your recovery, choose Bachus & Schanker, recognized as some of the best personal injury lawyers in Colorado.

How Medical Liens Can Impact a Final Settlement 

Medical liens reduce the amount you receive from a settlement. Since healthcare providers and insurers receive their payment before the funds even get to you, it can be concerning what you will receive. That’s why it’s vital to have an experienced attorney handle negotiations for you.  

Your lawyer will first identify all lienholders, including hospitals, private insurers, Medicaid, or Medicare. They will then carefully assess your medical records and search for public records for any lien associated with you. This will be followed by communication. Your attorney will contact each lienholder to confirm the existence of the lien and the amount and request an itemized statement of all charges the lien is claiming. 

With the information they gather, your lawyer can confidently negotiate to reduce the amount owed. They can do this by scrutinizing the bills to identify any unnecessary treatments or charges. For instance, they may find that you received a service not related to your injury or that the bills have been inflated.  

Additionally, your lawyer may suggest a lump-sum offer instead of the lienholder waiting for slow payments. Many lienholders often accept quick, reduced lump-sum payments.  

Demonstrating financial hardship is another way attorneys use to lower medical liens for their clients. Your attorney can present detailed documents, showing how the injury significantly impacted your life, and lowering the settlement will only make things worse. A lienholder is more willing to accept a reduced amount than risk not getting anything when you file a lawsuit claiming the lien does not leave a fair recovery. 

It’s also not uncommon for attorneys to discover a lien is unenforceable. For instance, if a healthcare provider failed to disclose crucial information to the injured party, provide a written, itemized statement of all billed charges upon request within 10 days, or file the lien correctly with the county clerk and recorder’s office within 180 days after release. 

Additionally, your attorney will ensure you understand the state and federal laws that apply to your case. For example, Medicare and Medicaid are governed by strict requirements. Not understanding them can weaken your position in negotiations.

How Bachus & Schanker Can Help You 

Our law firm is dedicated to helping injured victims in Colorado receive prompt medical care, but also to protect their net recovery. We are skilled in negotiating medical bills on settlements, allowing clients to keep as much as possible from their award.  

It’s important to seek our legal guidance immediately after you sustain an injury due to someone else’s negligence. This way, we can help you from the start. Contact us today for a free case evaluation. 

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