Missouri Medical Liens: What Can Be Taken Out from a Personal Injury Settlement?

If you have just settled your personal injury case in Missouri for $100,000 or more, you may be wondering how much of that money your doctors, hospitals or health insurance companies can claim or retain. In such cases, what you get to keep of the settlement in the end is typically much less that that initial number because a lot of other expenses are subtracted before you get it. These deductions typically include your lawyer’s fees, case costs, medical and hospital liens, what your health insurance plan, Medicare or Medicaid paid upfront, etc. Any other medical bills that haven’t been paid yet can also be factored in the deduction.

A medical lien works differently than a regular claim that is made by a health insurance provider. Under Missouri law, the money that a medical professional or hospital can take out of your settlement is limited. This legal limit exists to make sure that you are able to keep a fair portion of your settlement. Getting a good handle on these rules and nuances can help you better understand how much of the final settlement amount you will retain.

What is a Medical Lien in a Personal Injury Case?

A medical lien is essentially a legal claim that allows your health insurance company to get paid out of a personal injury settlement. For instance, if you’re looking at $40,000 in medical bills after a car crash and you got $100,000 from the at-fault driver’s insurance company, the provider that treated you can place a lien on your settlement.

A medical bill is the amount you owe as part of your treatment costs. A medical lien is a legal claim against a personal injury settlement. While a health insurance company may ask to be reimbursed for the medical expenses it paid, a government recovery claim might seek reimbursement for payments made from Medicare of MO HealthNet, which is Missouri’s Medicaid program. Hospitals and medical providers that qualify have the right under Missouri law to assert statutory medical liens.

How Much Can Missouri Medical Providers Take from a Settlement?

Missouri law (Missouri Revised Statutes Section 430.225) requires that medical providers cannot take more than 50% of your net settlement money to pay off your medical bills. Your “net proceeds” are basically the amount that’s left over after your attorney’s fees. So, if your total medical bills are higher than half of your net settlement, Missouri law says that your medical providers must split that portion among themselves. To be clear, they cannot take anything away from the remaining half, which under the law, should go entirely to you, the injured victim.

Example of Missouri’s 50% Rule

If you got a $100,000 settlement and your lawyer’s fees is $35,000, that leaves your net proceeds at $65,000. Half of that amount is $32,500. So, under Missouri law, your medical providers can’t dip into the entire $50,000, but only split the $32,500. Missouri’s 50% rule only applies to some medical liens. It doesn’t apply to federal or state health programs like Medicare or MO HealthNet. This is because each type of medical claim might work with their own set of rules

Which Medical Providers Can Have Liens in Missouri?

Only some healthcare providers or hospitals are allowed to put a lien on your personal injury settlement under Missouri law. These include:

· Hospitals and clinics

· Physicians and surgeons

· Ambulances (they have the same lien rights as hospitals)

· Physical therapists

· Dentists

· Optometrists

· Podiatrists

· Chiropractors

· Any other qualifying entity that gives you medical care

Also, the fact that you have an unpaid medical bill doesn’t automatically mean that there is a lien. So, for a medical lien to be valid, a hospital or doctor needs to follow rules, like sending a formal, written notice by certified mail. This notice should be sent not just to you, but also your lawyer and your insurance company. And it must happen before the settlement money is paid out. If they don’t do that, they may have the right to still bill you. But, what they cannot do is freeze your settlement by putting a lien.

Does a Hospital Have to Do Anything to Make Its Lien Valid?

Yes, a hospital must strictly follow the rules to make sure its lien is valid. According to Missouri Revised Statutes Section 430.240, a lien is no longer valid if the hospital didn’t send you a formal, written notice before the settlement money was paid out. Also, the notice must be sent by certified mail to the at-fault party and their insurer. The letter should contain specific details including:

· The injured person’s name and address

· The accident date

· The hospital’s name and location

· The responsible party

The lien’s validity is always an important consideration. If it is in fact valid, it could potentially freeze your payout. In such cases, the hospital gets its money directly from settlement amount. But, if the medical provider, for instance, failed to inform you by certified mail, the lien becomes invalid. You’ll still owe them for the medical bill. But, the hospital can’t freeze your settlement or take a portion of it before it reaches you.

Can Medicare Take Money from a Personal Injury Settlement?

This is entirely possible. Medicare can take money from your settlement amount. But, federal law sees this as a recovery claim instead of a standard medical lien that a hospital could put on your settlement. Medicare uses a conditional payment system. This means Medicare will pay for the treatment you may need soon after an accident so you don’t have to pay them out of pocket. But, if you get a settlement or a jury award later, you must pay Medicare back.

This is the process and steps involved in a claim by Medicare:

· Conditional payment letter: Medicare sends a letter with a list of what they’ve paid for so far.

· Review and dispute: This is your chance to take a look at the list and dispute any inaccuracies.

· Final demand letter: Medicare will send a letter with the exact amount that you owe as soon as your personal injury case has settled.

· Reimbursement: The final amount paid directly from your settlement is termed as the reimbursement.

Please remember that when it comes to what you owe Medicare here, Missouri’s 50% provider lien law will not apply as Medicare is held to federal laws (which supersede state laws).

Reimbursements for a Private Health Insurance Provider

Yes. This is routine in certain cases, for instance when dealing with employer health insurance plans. After your case has settled, through a process called subrogation, the private health insurance plan that covered your medical expenses (or a portion of it) after your accident will be paid (from your settlement or the jury award).

Here the exact amount that is deducted is based on:

· Your insurance policy terms

· Whether state or federal law applies to the private health insurance plan

· The specific medical expenses that stem from your accident

· The settlement amount or award

· A reduction or allocation that your lawyer negotiates

Negotiating a Medical Lien

Medical liens can be negotiated and the amount that a hospital or provider requires can be reduced through successful arguments made by your Missouri personal injury attorney.

Your lawyer will closely examine the hospital/provider’s claim and look for issues such as:

· Relevancy: If all the expenses and treatments listed by the hospital/provider are connected with your injury accident

· Accuracy: If the hospital/provider’s bill includes a duplicate charge or has other mistakes

· Completed payments: If the bill or a portion of the bill was already paid by your health insurance

· Legal compliance: If the lien adheres to Missouri’s notice rules

· Statutory limits: If Missouri’s 50% distribution rule limits the hospital/provider

By negotiating these bills, your Missouri personal injury attorney helps you maximize your settlement. For instance, if your lawyer finds a $6,000 unrelated charge in a $30,000 medical lien against your injury settlement/award, then your settlement can increase by $6,000.

A Missouri Settlement/Award of $250,000: What is the Final Payout?

If your personal injury case has settled for $250,000, you probably realize that your take home amount is not the entire sum and that number is a starting point for further calculations. Your Missouri personal injury lawyer will help you determine the amount that you must first pay to settle your legal and financial obligations.

An example of such a calculation can be:

· The total settlement amount/award: $250,000

· Any case-related costs (such as filing fees, medical records, etc.): $5,000

· The legal fees (calculated here at 33.3%): $83,250

· A Hospital/provider medical lien: $20,000

· Health plan/government reimbursement through subrogation: $15,000

· Final amount the injured person gets: $126,750

Please remember that every lawsuit or case is different and the amount that you finally recover in your injury accident will depend on your medical bills, insurance plans, agreement with your attorney, case costs, etc.

Can My Entire Settlement/Award be Taken?

Essentially, the answer here is no, as it also depends on the entity making the claim. Missouri state’s law protects your settlement/award amount against say, your medical provider/hospital claiming the entire sum. The law limits a medical provider/hospital to a maximum of 50% of your net settlement (after attorney’s fees and expenses have been paid).

However, it is important to recognize that claims made against your medical bills can total up to more than half of your settlement/award as some health programs follow different rules and do not come under state law and are not subject to Missouri’s 50% cap. Examples of such programs that can require a larger share of your settlement money include Medicare, MO HealthNet and some employee health plans, etc.

Frequently Asked Questions

Can a hospital put a lien on my Missouri personal injury settlement?

Yes, qualifying hospitals and medical providers can put a lien on your settlement. But, they must follow strict Missouri laws to be able to do that legally. If they don’t meet all the legal requirements, their lien may not be valid.

Does the 50% rule apply before or after attorney’s fees?

The 50% rule applies after attorney’s fees and after the case expenses have been paid. Missouri law looks at your net proceeds first – the amount you get after your lawyer’s fees and case costs. The limit on hospital liens is based on the money that’s left over.

Does Medicare have to be paid after a settlement?

When Medicare pays your bills after an injury, those are considered as “conditional payments.” This means that once you get your settlement or jury award, you are required to pay Medicare back that money under federal law.

Can an invalid medical lien be challenged?

Yes, you can challenge an invalid medical lien. Your attorney may find, for example, that a provider did not file it by the deadline or that the billing amount is incorrect. In such cases the lien could be challenged as invalid. In another instance, your lawyer may argue that the medical treatment was not related to your accident.

Can liens be reduced before settlement money is distributed?

Yes, many medical bills and reimbursement claims can be negotiated. Medical providers/hospitals are often willing to lower what you owe in the case of a legal and valid claim. Your attorney can help negotiate and let you keep more of your hard-won settlement.

In the end, the amount that you finally receive depends on a lot of moving pieces such as lawyer’s fees, case costs, medical bills and whether government programs like Medicare or Medicaid must be paid back.

Navigating these difficult rules and negotiating with hospitals can be challenging, especially at a time when you are recovering from your injuries. Our Kansas City accident injury attorneys have years of experience handling injury settlements in Missouri. We work hard to not just resolve the financial issues you face, but also lower the amount you owe and maximize the final payout that goes directly to you.