If you’ve brought a personal injury action for damages—including the cost of medical bills—you may have a medical lien imposed against any compensation you receive from your lawsuit.
What is a Medical Lien?
When an individual is injured, their health insurer frequently will pay their medical expenses. A medical lien is a request for repayment of those expenses by the insurance company. This is also known as a claim for subrogation or reimbursement. In effect, the health insurer wants to recoup what it is paid from the injured person’s liability settlement for a medical malpractice claim against a doctor or hospital or in auto accident litigation.
What is Subrogation?
Subrogation is the substitution of one individual or entity for another as to rights or claims in the insurance process. For example, when an insured driver’s vehicle is totaled through the fault of another driver, the insurance carrier will reimburse its insured driver under the terms of the policy and then pursue legal action against the at-fault driver.
How Does Michigan’s No-Fault Law Affect a Health Insurance Lien?
In 2019, the auto insurance laws in Michigan underwent a dramatic change. Before this, health insurance liens had no real impact on auto accident victims. The old laws required car accident victims to seek coverage for their medical expenses from their own no-fault insurer. The medical expense benefits were the responsibility of the no-fault insurer for the victim’s entire lifetime. As a result, drivers who caused the accident (the at-fault drivers) weren’t liable for the injured party’s medical expenses. Moreover, a no-fault insurer typically wasn’t permitted to bring a lien for medical expenses against the victim’s recovery from the negligent driver.
However, these rules changed. Michigan Statute § 500.3116(2) states in part:
If personal protection insurance benefits have already been received, the claimant shall repay to the insurers out of the recovery an amount equal to the benefits received, but not more than the recovery exclusive of reasonable attorney fees and other reasonable expenses incurred in effecting the recovery. The insurer has a lien on the recovery to this extent.
What are the Types of Damages I can Recover?
There are two types of damages: economic and non-economic damages. Non-economic damages are damages that include things like pain and suffering, disfigurement, the loss of quality of life, disability, and the loss of consortium or companionship.
Non-economic damages are capped, but there’s no limit on the amount of economic damages patients may be awarded. These include monetary losses suffered because of an accident, as well as hospital and other medical bills, property damage (such as vehicle damage), loss of earning capacity, lost income, vocational rehabilitation, household services, along with any out-of-pocket expenses that are related to your injuries.
Insurance companies have a right to recover the amounts they’ve paid for medical bills relating to malpractice and auto accidents for medical expenses. in you have questions about medical liens and subrogation, talk to an experienced Michigan personal injury attorney.
For a free consultation with an experienced medical malpractice attorney in Michigan, contact Buchanan Firm. We can discuss your situation if you believe you’ve been injured as the result of a physician or healthcare facility error.
Our firm proudly serves people all across Michigan, including major cities like Grand Rapids, Muskegon, Detroit, Lansing, Holland, St. Joe, and Ann Arbor, and rural towns such as Lowell, Ada, Fremont, Newaygo, Grand Haven, Rockford, and Cedar Springs. We will meet you after-hours, at home or in the hospital to accommodate you.