Lawyer Lien on Third Party Liability Reimbursement for Medical Claim

[Guest ssk]

Has anyone heard of a Lawyers Lien on a Third Party Liability Reimbursment for a Medical Claim? So instead of reimbursing the plan for the full medical expenses which were paid on behalf of the claimant, they want to reduce that amount by one third for a lawyers lien. How is the plan made whole in this case? Please advise.

[Guest b2kates]

what party does the lawyer represent to result in the lawyers lien. what state is this in?

[Guest ssk]

This is in Illinois and the lawyer represents the medical claimant.

[Guest T. Byram]

In general, this is a common practice. There is an entire body of law in each state on subrogation and attorneys' liens, so you may benefit from discussing this with your counsel of choice. The theory is that the claimant's lawyer has provided a benefit to the plan by recovering money it has paid out that it did not owe. This has saved the plan the expense of hiring its own lawyer to go after the wrong-doer and recover those funds. In either case, (the plan hiring its own lawyer to sue the wrong-doer, or the plan receiving proceeds as a result of the claimant's lawyer's efforts), the plan is not "made whole" --the laws usually do not allow attorneys' fees to be recovered separately but instead paid out of the recovered proceeds.

[Guest mjb]

What is the relationship between the attorney and the plan? Normally there needs to be a contractual relationship between the plan and the party bringing the claim. I dont see how the lawyer would be entitled to a contingency fee from the plan if the plan did not have an a contractual obligation with the attorney to pay the fee. In many states a lawyer is entitled to a charging lien on proceeds of a recovery/settlement for a client which entitle the lawyer to impound the settlement until the the client pay the attorney's fee but I dont know if this is such an agreement. Need more facts.