Medical lien

What it is

A medical lien is any claim against the recovery for medical care tied to the injury. The holder might be a treating provider waiting on a lien agreement, a hospital, a private health plan, an ERISA plan, Medicare, Medi-Cal or a workers' comp carrier. Each type follows different rules and negotiates differently.

The California rules

• Provider lien agreements are contracts; see letter of protection.
• Hospital liens arise under the Hospital Lien Act, Civil Code 3045.1 and following; see hospital lien.
• Health plans and insurers governed by state law are limited by Civil Code 3040 to what they actually paid (or 80 percent of usual and customary charges for capitated care) and, when the client has a lawyer, to no more than one-third of the recovery. Section 3040 doesn't apply to Medi-Cal, hospital or workers' comp liens.
• Federal and public payers follow their own rules: Medicare, Medi-Cal and self-funded ERISA plans.

Why it matters to a plaintiff firm

Liens decide the client's net. Rule of Professional Conduct 1.15 requires the firm to hold funds in trust when a third party has a lawful claim to them, and to pay out undisputed amounts promptly, so an unresolved lien holds up disbursement. Firms identify every payer at intake, request itemized lien amounts early, dispute unrelated charges, and ask for reductions for the payer's share of fees and costs. See medical lien reductions in California.