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Clearing Claims: Negotiating Hospital Liens in P.I. Cases

You’re on the verge of settlement. The wayward driver’s insurance carrier has agreed to fork over funds to cover your client’s injuries, pain and suffering, lost wages, and, of course, his totaled Toyota. Now that you have an idea of what the recovery will be, the real work begins, by clearing the claims.

As you are well aware, there are a number of parties lining up to take their cut of the settlement. Obviously, you have to get paid. Then, there is the hospital, the emergency room doctors, insurance companies, and, oh wait, your dear injured client. There are a lot of claims to clear, mouths to feed, and debts to settle before your client will see even a fraction of the settlement that they’ve been hoping for.

Who Has Dibs?

The priority of a lien will depend on the parties, state law, and the order in which the liens were filed. For example, out here in California, the lawyer's fees and expenses come first -- unless there is a claim by a county hospital. For non-county hospitals, you may be able to deduct your fees and expenses from the settlement check first, then calculate the amount recoverable by the hospital, subject to statutory caps.

Audit the Charges

It's $98 for an x-ray, and $56 for a few aspirin. Nit-picking of the bill may seem like a pain (it is), but if you're a veteran personal injury attorney, you've probably seen the market and contract rates for certain services. If your client's bill is inflated, or contains duplicate charges, some quick auditing could save your client significantly.

Make (Credible) Excuses

If the case was settled for a lump sum, it may have come without a clear determination of fault, and without amounts specifically designated for injury, pain and suffering, and a new bumper for your client's Corolla. This may give you some leeway in making arguments as to how much the hospital should recover.

For example, you might make a comparative fault argument, depending on state law. Using California as an example, Civil Code § 3040 actually provides a statutory mechanism for the argument.

Read Our Free Practice Guide

The preceding ramblings are a mere primer for the process. For a much more in-depth, authoritative list of twelve tips for negotiating hospital liens, including citations and advice from an experienced litigator, check out our practice guide on the subject.

And stay tuned -- we have many more posts on negotiating liens on the way.

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