Should I Use a "Medical Lien" in a California Personal Injury or Accident Case?

A California medical lien authorizes payment of medical bills directly to a health care provider from a personal injury settlement or judgment. In essence, it lets the patient receive medical services “on credit.”

Providers typically grant a medical lien in California when a patient who has been in an accident:

  • Does not have private health insurance, Medicare, Medi-Cal, a Med Pay auto policy or other "no-fault" insurance, or
  • Cannot afford to pay the deductible and/or co-pays under his or her insurance policy, or
  • Is otherwise unable to pay for needed medical care while waiting for the responsible party to pay up.

Since personal injury cases are not always successful, not every doctor, chiropractor, and therapist is willing to work on a medical "lien basis" in California.

Fortunately, we work with a variety of caring healthcare professionals who will often agree to treat our clients on a medical lien after an accident in California.

To help you better understand when you should use a medical lien in a California injury or accident case, our California personal injury lawyers discuss below:

You may also wish to review our articles on strict liabilitynegligence, gross negligence, recklessness and medical bills in California personal injury cases.

chiropractor adjusting head and neck of male patient

1. How do I find a doctor willing to accept a lien in California?

Not all healthcare providers are willing to accept patients on a lien basis. A provider who accepts a lien is extending the patient credit.

Like all parties that provide goods and services on credit, the provider needs to know he or she will be paid back.

Most providers who work on a lien basis will only do so if they think the case is winnable. Since the provider is an expert in medicine, not law, it helps to have a referral from a lawyer the provider trusts.

The lawyer can reassure the provider that the injury was the result of someone else's strict liabilitynegligence, gross negligence, recklessness or intentional wrongful act.

2. How does a medical lien work in California?

After a doctor or other provider agrees to treat a patient on a lien basis, the provider will have the patient sign a lien agreement.

The lien agreement is a legally binding contract. Once the contract has been signed, the doctor will “perfect” the lien by sending notice to the responsible insurer and other interested parties.1

Perfecting the lien allows the other party or its insurer to pay the doctor directly from a court award or out-of-court settlement before the patient receives a dime.

Older male doctor looking at laptop while talking to patient

3. Are agreements with doctors negotiable?

Yes. Lien agreements with doctors and other healthcare providers are negotiable in California.2

But many doctors will not negotiate their lien documents because they don't understand them and don't want to pay to have their lawyer review requested changes.

However, the lien agreement is a legally binding contract. If the agreement is particularly one-sided and the provider will not change it, it may be worth the time and effort to find another provider.

4. Is it a good idea to hire a doctor on a lien basis in California?

As a general rule, a California personal injury plaintiff should use a medical lien only when there is no other way to get treatment or when the plaintiff can't afford his or her deductibles and co-pays.

One significant advantage to medical insurance is that in-network providers cannot charge the insured more than the providers have agreed under their contract with the insurance company.

If the patient has a favorable plan, these pre-negotiated payments will often be lower than the amounts the patient would owe under a lien.

5. Won't high medical bills get me a better settlement?

It is a common misconception that an insurer will “punish” a plaintiff who pays less than the full amount for medical care after an accident.

But doctors bill initially at their full rates. And it is these bills that get sent to the other side. Settlement offers and awards are based on the value of the doctor's services, not the amount the patient pays.

Since the patient is ultimately liable to pay for services received, it only makes sense to have that be at the lowest rate possible.

gavel being banged on table by judge

6. What happens if I lose my case?

If a patient who has agreed to a lien loses the case or does not recover enough to pay his/her medical bills, the patient is liable for the remainder.

The provider will then have all remedies available under California law and/or the terms of the lien agreement to collect on the debt.

However, an experienced California injury lawyer can often negotiate a reduction on the patient's behalf -- even if the lawyer did not negotiate the lien agreement.

Most medical professionals would prefer to work out a payment plan than to have to take their patients to court or arbitration.

We are often able to negotiate a reduction so that the doctor is happy but the patient still has something left over as compensation for pain and suffering.

7. Why should I hire a lawyer to negotiate my lien agreement?

A medical lien is a legally binding contract. Among the rights it typically grants the provider are:

  • The right to be paid before anyone else once the patient is awarded a judgment or settlement;
  • The right to recover any excess amounts directly from the patient; and
  • The right to have all disputes resolved by arbitration rather than a jury.

Standard lien agreements are drafted so as to favor the doctor or provider -- sometimes significantly.

Having a lawyer negotiate – or even better, draft – the lien agreement can result in much more favorable terms.

For instance, a lawyer may be able to negotiate a discount in the event the plaintiff loses the case or the settlement is not enough to cover the medical bills.

Injured in California? Call us for help…

female receptionist

If you were injured or in an accident in California and you think someone else might be responsible, we invite you to contact us for a free consultation.

Call us at (855) LAWFIRM to discuss your case with an experienced California injury lawyer.

If you were injured in Nevada, learn How to Get a Medical Lien in a Nevada Injury or Accident Case.

Legal references:

  1. See California Civil Code § 3045.3.
  2. In some cases -- such as when Medicare is used to pay for medical services -- the government automatically has a lien for reimbursement from the proceeds of a personal injury lawsuit or out-of-court settlement. See 42 U.S.C. 1395y(b)(2).

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