What Is a Medical Lien?
A medical lien is a form signed by a patient receiving treatment at a medical facility. The medical lien authorizes the medical provider to receive direct payment of sums as may be due and owing for medical services rendered, both by reason of the accident and by reason of any other bills that are due to the medical provider. The medical lien also authorizes the medical provider to place a lien on any sums from any settlement, judgment, or verdict awarded to the patient as may be necessary to adequately cover payment for medical services provided to the patient.
In other words, a medical lien allows a medical provider to seek payment directly from the patient and his or her attorney upon settlement of the patient’s personal injury lawsuit. It is important to note, however, that the medical provider may seek payment directly from the patient only when there is lack of coverage or the patient is in violation of his or her no-fault policy.
When Is an Insured in Violation of His or Her No-Fault Policy?
An eligible injured person may violate his or her policy when one of the following occurs:
Failure to Appear for an IME. If an eligible injured person fails to comply with a no-fault insurer’s reasonable request for an independent medical examination (“IME”) to verify the medical necessity of the health services performed, he or she commits a policy violation. Only when the eligible injured person fails to show to two appropriately scheduled IMEs may the insurer deny no-fault benefits.
Failure to Appear for an EUO. If an eligible injured person fails to appear for two appropriately scheduled Examinations Under Oath (“EUOs”), he or she commits a policy violation. An EUO is a claim investigation tool under which insurers may demand that an eligible injured person appear at an attorney’s office or some other location to answer questions related to the claim, under oath and before a court reporter. Refusal to submit to an EUO, answer questions, or cooperate may cause the insurer to deny no-fault benefits.
Fraudulent Misrepresentation of the Accident. When, after the insurer conducts a thorough investigation (e.g., through conducting an EUO), the eligible injured person is found to have fraudulently misrepresented the occurrence of the car accident, he or she commits a policy violation. The insurer may then disclaim payment for services rendered and deny no-fault benefits.
What Happens When an Insured Exhausts His or Her Benefits?
Section 65-3.15 of the No-Fault Regulations provides:
When claims aggregate to more than $50,000, payments for basic economic loss shall be made to the applicant and/or assignee in the order in which each service was rendered or each expense was incurred, provided claims therefor were made to the insurer prior to the exhaustion of the $50,000. If the insurer pays the $50,000 before receiving claims for services rendered prior in time to those which were paid, the insurer will not be able to pay such late claims. If the insurer receives claims of a number of providers of services, at the same time, the payments shall be made in the order of rendition of services.
Once an eligible injured person’s no-fault policy limits are exhausted (i.e., the insurer has paid out $50,000), the insurer must respond to no-fault bills with a denial stating as such.
The services rendered to the injured person that were unpaid remain unpaid. A medical lien would allow a medical provider who rendered services to seek payment from the eligible injured person.
What Is a Straight Lien?
When a person treated at a medical facility does not have insurance coverage (e.g., when he or she was injured in a slip-and-fall case) and signs a medical lien, he or she allows the medical provider to seek payment directly from him or her.
What Happens When a Personal Injury Attorney Settles the Insured’s Case?
If a medical lien is properly executed, a medical provider may have outstanding bills paid from a settlement of the patient’s personal injury claim. The patient’s personal injury attorney may not disburse funds from the patient’s personal injury case settlement until the medical lien is satisfied. The patient’s attorney at times may try to negotiate down the amount of the lien with the medical provider in order to effectuate a settlement.
A medical lien is an important aspect of the intake process for any medical provider involved in no-fault billing. It is extra insurance that you will be compensated for the medical services you render.
As such, through our services, we provide clients with medical lien agreements. Upon the intake process at our clients’ offices, the patient will be required to sign a medical lien. The lien will then be served upon the patient’s personal injury attorney (if any) for his or her signature.
In that way, the patient and his or her personal injury attorney acknowledge our client’s right to receive payment if the patient fails to comply with no-fault policy requirements.
We are specialists in no-fault billing and collection. To learn more from us about medical liens, please call (516) 427-5400 for an immediate, free consultation.
 Rogak’s New York No-Fault Law & Practice, by Lawrence N. Rogak, Second Edition 2009, p. 272
 Rogak, pg. 228
 McKinney 2000
 N.Y. Ins. Law Section 3105
 Rogak, pg. 439