Most people are not aware that liens can be placed on their personal injury case. Health insurance is one type of lien. When it comes time for a settlement disbursement, clients are often very confused as to why they have to pay back their health insurance for any bills that the health insurance paid on their personal injury case. After all, clients pay a lot for that health insurance for just such a circumstance so why do they have to pay it back?
M.G.L. Chapter 152 section 46A is the law that regulates the payback of liens in Massachusetts. The theory behind the law is that when someone is seeking redress against a third party for injuries and are collecting monetary damages from that third party, any payments made by the health insurance or workers comp are reimbursable to the insurance carrier.
There are other types of liens that are automatic. Whenever a personal injury claim is settled in Massachusetts, the insurance comapny is required to run the claimant’s social security number through the Department of Revenue and Mass Health databases. If the claimant owes any back taxes to the State, any unpaid child support or if Mass Health paid any of the medical bills, those funds are automatically grabbed through the intercept program. With private health insurance, it works a little differently. The private health insurance has to actually place the lien on the case for it to be effective or prove that the insured had notice of their lien. For instance, if the health carrier pays some bills for an auto accident and sends their insured a letter asking them to fill out some information about the incident that caused them to pay some bills, that has been considered to be constructive notice of a lien. Some liens are negotiable so it’s important to hire an attorney who can do this for you. In a large personal injury case, there can be many types of liens and you really want to make sure that they are handled correctly so that you don’t get stuck with paying one after all of the money is gone.
Here is the link to the applicable law regarding liens.