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Calculating a personal injury settlement with a medical lien

On Behalf of | Nov 13, 2020 | Motor Vehicle Accidents

When you experience a serious injury, the associated medical costs can become staggering. If you cannot pay these bills, the hospital or treatment center may place a lien on your personal injury settlement. With this arrangement, if you sue another person or entity for causing your injury, such as after an auto accident, part of your settlement will automatically go to your medical bills.

Learn how the court calculates the cost of a medical lien when you receive a financial award for personal injury.

Understanding the medical lien process

A valid medical lien must follow New Jersey state laws or risk dismissal by the court. In New Jersey, the lienholder must:

  • Include your name, address, accident date, accident location, first treatment date, hospital name and address, and the name and address of the responsible party in the lien paperwork
  • File the lien within 90 days of the day you first received treatment

Negotiating a medical lien

You may be able to keep a larger portion of your personal injury settlement by negotiating the cost of removing a medical lien. For example, your attorney can use the fund doctrine to create a payment fund for the hospital. Both the medical lien and the attorney fees would come from this fund. You or your attorney could simply ask the health care company to settle for a lower flat fee.

Make sure when you negotiate the full settlement amount, you account for all the fees associated with a medical lien. You should also provide detailed information about the cost of all your medical care, therapy, transportation to appointments, prescription drugs and home medical equipment.