Lien

A lien is a legal claim against money or property to secure repayment of a debt. In asbestos cases, health insurers, Medicare, Medicaid, workers' compensation carriers and others may hold liens on a settlement or verdict for what they paid toward the injured person's care or benefits.

Origin

The word comes through French from the Latin ligamen, a bond or tie. Liens on injury recoveries come from statutes (such as those for Medicare, Medicaid and workers' compensation), from insurance plan contracts, and from the doctrine of subrogation.

Significance in Asbestos Context

Liens can take a meaningful share of an asbestos recovery, and they must be dealt with before money is distributed. Common lienholders include Medicare (under the Medicare Secondary Payer Act), state Medicaid programs, employer health plans governed by federal ERISA law, the VA for some non-service-connected care, workers' compensation insurers that paid benefits, and sometimes hospitals. Each has its own rules. Some can be reduced for the share of attorney's fees, and some can be challenged for charges unrelated to the asbestos disease; the strength of a plan's repayment rights often depends on its exact wording and on state law. Trust payments and lawsuit settlements can both be subject to liens. Families are sometimes surprised that a lien remains after the person has died, because estates and wrongful death recoveries can also be affected, depending on state law. Resolving liens takes paperwork and time, and doing it properly protects the family from later collection claims.

Example Sentence

Before distributing the settlement, the firm negotiated the health plan's lien down by removing charges for his unrelated knee surgery.

Related Terms

Medicare Secondary Payer Act, Medicare Set-Aside, Subrogation, Collateral Source Rule, Workers’ Compensation, Settlement Credit

Notes

• Give your lawyer a list of every health insurer, government program and compensation carrier that paid for care.
• Keep explanation-of-benefits statements; they show what was paid and for what.
• Do not ignore letters from a plan or recovery company; pass them to your lawyer.