Medical Lien Funding: What It Is and How It Can Help

Farmington Hills, MISo now we are on the subject of medical lien funding, which is another type of lawsuit advance similar in nature to pre-settlement funding and other lawsuit loans. However, to understand the idea behind medical lien funding, you first have to understand what a medical lien is.

A medical lien is not unlike other forms of liens that are sometimes taken out against a piece of property or an automobile. You may not have been able to buy that car you had your eye on after all, once it was discovered that there was a lien against the car by someone who had a financial investment in it. That person has to be paid before the lien can be removed and the car sold to you and registered in your name.

A medical lien doesn’t differ too much from other liens. Let’s say you are injured in a car accident and needed emergency treatment. The treating hospital, together with the various health care professionals involved with your case, will be very interested in recouping the money spent on your care from any insurance coverage you may have.

But perhaps you don’t have medical insurance - or you do, but your coverage is woefully lacking and you’ll still owe the hospital or health care provider money after the insurance policy pays out. Let’s also assume that the event by which you sustained your injury was caused by someone else through no fault of your own, and you have launched a lawsuit in order to acquire compensation for your injuries.

This is where the medical lien comes in. The hospital can install a lien against the proceeds of your lawsuit, to ensure the hospital gets paid before you do. Whether or not the hospital or doctor has continued to provide treatment beyond emergency care through a medical lien is not guaranteed, as the health care provider or facility would continue to be treating the patient without getting anything back in return, all the while hoping that the patient’s lawsuit works through the courts in a prudent and efficient manner, so a settlement can be reached and funds advanced to pay the medical lien.

This is where medical lien funding comes in. A medical lien, placed against a patient by a hospital or health care provider, can be effectively purchased by a medical lien funding agency, which will then continue to pay the hospital or health care provider for ongoing care with the patient’s lawsuit - and expected settlement - as collateral.

Once the lawsuit concludes and settlement funds are advanced, the medical lien funder is repaid in both principal and interest. Remember, the hospital and treating physicians have been paid on an ongoing basis through the medical lien funding, so any leftover funds once the medical lien funding outlay is repaid will revert back to the victim. That’s you, of course.

There are various requirements for such a lawsuit advance - and remember that medical lien funding is similar to other forms of lawsuit advance, including pre-settlement funding and post-settlement funding, but differs in that medical lien funding has a specific purpose in mind.

For example, for medical lien funding to be even considered, a patient must be pursuing a lawsuit over an accident or health event that occurred through no fault of his or her own. Also, an attorney must be involved. Typically, an attorney will outline various funding options for a client, make recommendations and help facilitate the funding, bringing all the various parties involved into the agreement, including the hospital and treating physicians.

Various states have different rules and guidelines, and these have to be considered as well.

As always, it is good to ask plenty of questions and be aware of the costs involved, including all fees. An educated consumer is a wise consumer. That said, the primary advantage of medical lien funding is that your ongoing treatment and health care is assured regardless of your insurance status. Hospitals and doctors are paid as treatment is dispensed, with no balloon payments looming over your head down the road. In this way you are never denied treatment due to the inability to pay the hospital, staff and treating physicians.

And - as with other types of lawsuit loans - your medical lien funding does not have to be repaid if your lawsuit fails and you receive no settlement. The medical lien funding provider accepts that risk, in exchange for fees or interest payable only if and when your lawsuit settles.

If there is no settlement, there is no bill, and your medical lien funding agreement is simply retired.

It’s as simple as that…