There are many instances when a state or federal government or insurance company will put a lien on your car accident settlement. For California accident victims over the age of 65, this can come from Medicareor Medi-Cal if they are insured by one of those entities. This means that they will provide medical care and treatment and payment must be made once a settlement is reached. Even if the injured victim is unaware of the lien, it still must be repaid.
How does a Medicare or Medi-Cal lien work after a car accident?
After a car accident, we always recommend seeking medical attention as soon as possible. Getting treated immediately after an accident is a critical step to not only ensuring your health is taken care of, but also to maximize your injury claim. With ongoing medical treatment, medical bills will start to pile up. Especially if the injury is severe.
Medical treatment and the lien
Those who are insured under Medicare and Medi-Cal will be able to receive their medical treatment and care through their respective plans. These companies operate on what is called a lien. The hospital and/or doctor will provide the service, Medicare/Medi-Cal will make payments to them, and then they are reimbursed out of the settlement.
Because medical care can result in large bills, many people fail to seek treatment after their injuries. This can result in the injuries worsening and claims being denied by the insurance company for waiting too long. By operating on a lien, this allows injured victims to get the medical care they need while paying those bills back once a settlement comes in.
Medicare and Your Personal Injury Settlement
Once you’ve reached maximum recovery, your personal injury attorney will be able to assess the extent of your medical bills and other injury related damages. This will help to determine the amount to demand. Provided that the insurance company and your car accident attorney can come to an agreement, your case will settle without needing to file a personal injury lawsuit. By law, your car crash lawyer will need to report the settlement or judgment within 60 days. If they don’t, this could result in fines up to $1000.00 per day.
Once a report is made, Medicare will let your lawyer know what their lien is for their bills on your personal injury claim. Notice is typically received within 120 days. It is important for your car accident attorney to review the charges because Medicare is only allowed to be reimbursed for charges related to the personal injury accident.
However, because of California car insurance limits, the situation can arise where the medical bills far exceed the settlement amount. For example, if the medical bills total $100,000, but the at-fault driver’s insurance has a limit of $25,000 on their policy, there is a deficit of $75,000.
If you are represented by a personal injury attorney, the law allows for Medicare to reduce its lien to a maximum of one-third of your settlement. In the example above, this would mean they are limited to $8,333.33. In some cases where the insurance policy limits are low and the injury was severe, Medicare will waive their lien to allow the injured victim to receive more of the settlement.
Personal injury attorneys won’t know the amount Medicare claims until after a settlement is made. This is because the lien amount will depend upon the settlement amount.
It’s extremely important that you or your car accident lawyer notify Medicare or Medi-Cal of any potential claim. If they don’t, there could be serious penalties to pay.
If you’ve been injured by the fault of another and have Medicare or Medi-Cal, we may be able to help. Our office offers free, friendly, and honest advice to help you with figuring out your options. Please give us a call today at (916) 619-5452 or fill out our form on our website and someone will be in touch with you within 24-48 hours.
