Tired of Fighting with Attorneys in Personal Injury Cases? Three Golden Rules of Medical Lien Negotiation
You are not required to negotiate with a patient or a patient attorney over a medical lien bill—ever. In almost all fifty states, the patient owes the full balance of your bill regardless of the outcome of the case.
You don’t have to negotiate. Period.
Sometimes, though, negotiating is the right thing to do. After all, building strong relationships with good attorneys—attorneys who are helping you grow your practice—can pay dividends down the road.
Yet, too often, chiropractors feel bullied and threatened into taking a cut on their bill. They know that they deserve to be paid in full, but they don’t know how to stand up to attorneys who fight for a living.
Let’s take a look at the three golden rules of lien negotiation.
First, Be Extreme About Preparation
When you are prepared from the get-go, you communicate to the attorney that you are a chiropractor who understands the process, who isn’t a pushover, and who knows enough about the applicable law to stand your ground.
You can prepare for success by having a comprehensive, rock-solid lien agreement signed by both the patient and the attorney. A lien is a legal contract, so it is the language that attorneys understand and speak.
A rock-solid lien should:
- Explain that the patient owes the full amount of the bill regardless of the outcome of the case.
- Include an interest-rate provision. After all, you are waiting to be paid, and you have overhead associated with tracking the bill.
- Require the attorney to list all the settlement details in writing, including an accounting of who is to get paid what from those funds.
- Demand that lien reduction requests be made in writing and clarify that you consider reductions on a case-by-case basis, and only with cooperative counsel and patients.
- Include your fee schedule, as well as the average per-visit range that your patients pay, and a good-faith estimate. This keeps you compliant with the No Surprises Act. It also gives the patient and the attorney full transparency about your bills and rates from the get-go, which makes it harder for them to later argue that your bills are too high.
Make sure, too, that the lien states that the attorney has a “fiduciary duty” to you as the medical lienholder. This requires the attorney to represent and protect your financial interests in an ethical manner. Adding this line removes any ambiguity that the attorney’s duty is not just to their client, but also to you.
Importantly, have the attorney sign the lien. And if counsel changes, make the new attorney sign the lien as well.
Second, Compels Radical Transparency
In any transaction, managing expectations is wise, and this can be done through “radical transparency.” When you over-communicate your expectations, you lay the foundation for an honest, transparent relationship and a successful outcome for the case.
So what does it look like when a provider compels “radical transparency”?
- As outlined earlier, include language in your lien that states that the patient is responsible for the bill regardless of the outcome of the case.
- Remind the law firm every six months that you will consider lien reductions on a case-by-case basis, but not to assume lien reductions, and to come to you prior to the patient finalizing any non-policy limits settlements so the patient has full knowledge of any potential additional personal financial exposure.
- Educate your patients about lien obligations and your process for considering lien reductions. Remind your patient how hard you and your staff work. Let them know about the extra time and expense involved in following up, and that you are potentially waiting years to be paid. Help them connect the dots so that they see the reasons you need to be paid in full—namely, the extra time and expenses associated with lien cases.
Make sure your patient understand that the responsibility is on them: Tell the patient that if the attorney mentions a lien reduction, the patient should email or call your office to confirm that a lien reduction has been granted. - Add a note to your monthly statements—which you should send to both the patient and the attorney—noting that the patient owes the balance regardless of the outcome of the case. Keep a paper trail, including proof of how documents have been sent. Copy yourself on emails, keep fax confirmations, and send statements via certified mail (with copies for yourself of what was sent) so you can maintain records.
- Before considering a lien reduction, ask for a copy of the proposed settlement disbursement listing, which is a document that includes a breakdown of how the settlement funds will be listed. It includes the attorneys’ fees, as well as the gross amount of medical lien bills, the requested reduction amount for each bill, and the net to patient.
This document allows you to answer questions such as:- Is the attorney also reducing their fee, which is only fair if they are asking you to reduce your fees?
- Are there additional sources of potential recovery still open, such as underinsured motorist or other third parties involved?
- Are the other medical providers reducing their fees, and by how much? A medical provider who charges $2,500 for a single fifteen- to ninety-minute MRI can generally afford to reduce its medical bill much more than a chiropractor or acupuncture who accumulates a $2,500 bill after ten or fifteen patient visits, each of which take an hour, equating to ten to fifteen hours of treatment!
If the attorney will not provide the disbursement listing, let them know that you do not have the necessary information to evaluate whether the lien reduction request is appropriate, so you plan on collecting 100 percent of the bill, per the lien agreement.
Third, Stand Up for What Is Right
Since attorneys very often attempt to mislead chiropractors about the applicable law, knowing the law, and standing up for what is right, is the third part of the equation for negotiating with attorneys.
For instance, attorneys often state that the law requires something called pro rata, meaning that funds from a settlement must be distributed proportionately, with one-third going to the attorney, one-third going to the patient, and one-third going to providers. While there is a pro rata law that applies to healthcare networks, it does not apply to most medical providers, including chiropractors. Pro rata is a myth. In almost all states, the patient owes the full balance of the bill, regardless of the case.
Often, though, attorneys cite specific laws. In California, for instance, unethical attorneys will cite Civil Code 3040, fully knowing that the law does not apply to the chiropractor’s bill. And when this doesn’t work, attorneys will say that pro rata is “customs and practice,” as though attorneys decide the best customs and practices for your industry!
Here are some scripts you can use to stand up for what is right when negotiating with attorney who argue pro rata or “customs and practices”:
- If in California: “What Civil Code states that medical providers must agree to lien reductions? It isn’t Civil Code 3040—which applies to in-network medical providers and healthcare networks, but not private providers—so please point me to the exact statute.”
- “Attorneys often assert a custom and practice standard to force a pro rata distribution of funds, but speaking on behalf of the medical industry, I can assure you that this custom and practice does not exist. And certainly, there is no statute that mandates this supposed custom. We believe in the value of our work as providers and our staff, just as you do with respect to your services and staff.”
- “I am returned this check, which I have marked as ‘void’ because it erroneously states ‘full and final payment’ when, in fact, it only represents a fraction of the outstanding amount of the bill. Please submit a new check for the full outstanding amount.”
Attorneys also misrepresent the facts when dealing with their own client (your patient), which means chiropractors have another opportunity to stand up for what is right. Very often, when settling a case for less than policy limits, attorneys will lead their clients to believe that you have already agreed to a lien reduction, when, in fact, you haven’t.
It works like this: The attorney provides the patient with the proposed settlement disbursement listing, which includes a reduced amount for each medical bill. The attorney fails to mention that he or she hasn’t yet spoken to any of the medical providers about a lien reduction, let alone obtained the reduction the attorney listed. In other words, the attorney lets the patient believe that the lien reductions have already been granted when, in fact, they are mere speculation.
The patient does not know that, so the patient skips to the “net to client” shown on the letter. If the patient likes that number, they agree to accept the settlement, and they sign on the line.
But if you didn’t agree to the reduced amount shown on that letter, the attorney could be in big trouble because the client still owes the outstanding amount, regardless of the outcome of the case. That said, it’s unfair that the patient should have to pay your bill. After all, the patient was misled into signing off on a proposed settlement amount with false information.
In these cases, the attorney should pay out of their own pocket—and you can stand up for what is right by letting the attorney know that you understand the law well enough to identify an attorney who is acting without integrity. Here’s a script you can use if you believe the attorney has misrepresented the facts of the case:
“Was the patient informed by you prior to settling this case that I did not agree to a lien reduction? I certainly hope that the patient did not agree to settle and conclude the lawsuit under the false pretense that I had agreed to a lien reduction when this is the first time I’m being asked! It would be unfair for the patient to have to pay out-of-pocket if they had false information and settled without knowing they still had a higher personal financial exposure.”
Your preparation sets the stage for a successful transaction down the line. When you demonstrate that you know the law, understand personal injury cases, and use liens to your advantage, you position yourself as a chiropractor who understands the process, isn’t some pushover, and knows enough about the law to stand your ground.
