When a settlement is made in a personal injury case, the recipient of settlement funds must use the funds to payoff any liens that have resulted from outstanding debts in payment of medical treatments they have received. A settlement receiver’s health insurance provider and Medicare may have contributed to his or her medical bills, and will be entitled to however much of the settlement is necessary to payoff these outstanding debts.
Cutoff dates for medical liens in settled personal injury cases are used to determine how much out of the settlement is owed to medical lien holders. A cutoff date is a date after which funds used to pay for medical treatment of an individual injured in a certain event are not reimbursable. The cutoff date will be determined by a few factors, including whether or not the Employee Retirement Income Security Act of 1974 (ERISA) applies and whether the medical expenses were paid by health insurance or Medicare.
ERISA can only apply in cases of medical liens held by health insurance providers and is generally applicable in situations where the health insurance plan covering the medical services is an employer-sponsored group health insurance plan. ERISA is generally seen as benefitting the insurance provider by decreasing the financial responsibilities of the insurance provider vis-a-vis the settlement receiver’s medical conditions by limiting or eliminating the carrier’s need to cover health care expenses related to the accident or incident once settlement has been reached. Dealing with liens where ERISA applies can be difficult for the settlement receiver. However, they can be contested. In cases
- where an insurance provider holds a medical lien where a settlement is reached,
- the cutoff date is typically the same as the settlement date.
The cutoff date is also the date of settlement In cases of cutoff dates for medical liens in settled personal injury cases where Medicare is the lien holder. The settlement date on a personal injury case is generally considered to be the date at which all parties have come to an agreement regarding a settlement amount. However, one possible area of debate is whether or not Medicare must be reimbursed for services planned before the date of settlement but provided afterwards.
Cutoff dates for medical liens in personal injury cases involve many murky areas of uncertainty. If you have questions regarding cutoff dates, you need to consult with an experienced attorney to decide what kind of financial obligations you will have due to medical liens once you reach settlement. The important thing is to be aware of any outstanding medical liens you have and of the possible cutoff dates for medical liens in settled personal injury cases.
Unfortunately, reaching settlement in a personal injury case is not necessarily the end of the legal struggle a personal injury case entails. Be prepared to deal with medical liens once you have reached settlement.