After months of negotiations, your Indiana personal injury claim is finally settled – and you find out that a hospital has placed a lien on it, seeking to recover their losses for accident-related care they provided while the claim was pending. What now?
The hospital can’t take everything. Under Indiana’s Hospital Lien Act, qualifying hospital liens must be reduced if paying them in their entirety would leave you with less than 20% of your total settlement. However, there are some significant limitations to this rule.
How does Indiana’s 20% rule work?
In essence, your attorney’s fees must be paid first. Then, the hospital lien can be addressed. If paying the hospital would leave you with less than 20% of the full settlement amount, the hospital lien has to be reduced proportionately so that you receive at least 20%.
For example, if your personal injury claim settles for $50,000, a qualifying hospital lien cannot reduce your share of the settlement below $10,000. The exact distribution (who gets what) would ultimately depend on your attorney fees, cases expenses and other liens.
It’s important to note that the 20% protection does not apply to claims made by Medicare, Medicaid, private health insurance companies, workers’ compensation insurers and other medical providers. They may have their own repayment rights under state or federal law. Because of this, it is critical to identify all valid liens or reimbursement claims before calculating distributions.
A skilled attorney can help identify whether liens against a personal injury claim are valid and enforceable. They may also be able to negotiate lower repayment amounts with hospitals and other providers. While Indiana’s 20% rule can preserve part of your recovery, it’s only one piece of the settlement process.
