California Medical Lien Statute of Limitations

The California medical lien statute of limitations for contractual provider liens is 4 years for written agreements and 2 years for verbal agreements. Government or statutory liens like Medi-Cal or Medicare follow different timelines, but must also be enforced before settlement funds are disbursed. Ultimately, the statute of limitations varies based on the type of lien and how it was created.

At Saeedian Law Group, we’ve helped personal injury victims in California recover over $100 million in compensation. With 16+ years of experience, our team of expert personal injury lawyers can help you review medical lien agreements, understand deadlines, negotiate reductions, and protect your settlement. Book a free consultation with us today – let’s help you get the full compensation you deserve without unexpected lien issues.

In this blog, we’ll explain the different types of medical liens in California, how the statute of limitations applies to each, what happens if a lien expires, and the exceptions that might extend the deadline.

What Is a Medical Lien in California?

In California, a medical lien is a legal claim that a healthcare provider places on a personal injury lawsuit or settlement to ensure they get paid for medical services rendered. It is commonly used in personal injury cases, such as car accidents, slip and falls, or other negligence claims.

When a person gets injured and does not have the money to settle medical bills upfront, a doctor or hospital may agree to treat them on a lien basis. So, instead of asking for payment upfront, the healthcare provider typically agrees to defer payment until the case is resolved.

The injured party then signs a lien agreement to pay the provider from the compensation they’ll eventually receive. The lien is usually formalized with a written agreement and sometimes recorded with the county.

Once a settlement is reached, the lien gives the medical provider the right to collect payment directly from the settlement before the patient gets their share. If the injured person refuses to pay, the provider may take legal action to enforce the lien or file a claim against the settlement funds.

People typically use medical liens when they don’t have insurance or don’t have money to pay for care immediately. But while liens help people get needed treatment, they can also reduce how much money the injured person receives at the end. This is because medical providers might charge more than typical insurance rates, and lien payments can take a big portion of the personal injury settlement.

Types of Medical Liens

In California, various types of medical liens may apply, depending on who covered the treatment and how. Understanding the types of liens can help injured individuals and their attorneys protect their settlement and manage the amount ultimately paid out.

1. Contractual Provider Liens – These are private agreements between the patient and a medical provider, like a doctor, clinic, or hospital. The provider agrees to treat the patient without upfront payment, in exchange for being paid later from the personal injury settlement. The patient typically signs a lien agreement allowing the provider to collect directly from the settlement funds.
2. Statutory Liens – Statutory liens are automatically granted by law when government programs pay for injury-related treatment. For example, if Medi-Cal pays for medical care related to the injury, it has a legal right to be reimbursed from any settlement. The same applies to Medicare and the Department of Veterans Affairs. These agencies usually send formal notices to the injured person or their attorney about the lien. In addition, they expect repayment before the injured person receives their share of the settlement.
3. Health Insurance Liens – Some private health insurance plans include a subrogation clause. Subrogation allows the insurance company to recover what it paid if the injured person later gets a settlement. These liens often involve negotiation between the health insurer and the injured party’s attorney to determine repayment.These liens depend on the terms of the insurance policy and the type of plan. Some employer-based ERISA plans may be more aggressive in seeking full repayment. Meanwhile, attorneys often negotiate these liens to reduce the repayment amount, especially if the settlement is limited or doesn’t cover all damages.

What Is the Statute of Limitations for Medical Liens in California?

Statute of limitations simply means the legal deadline for filing a lawsuit or enforcing a legal right. In the context of medical liens in California, it refers to how long a medical provider, insurance company, or government agency has to legally pursue repayment after treatment has been provided or a settlement is reached.

Under California law, the statute of limitations for medical liens depends on the type of lien and how it was created. Generally, providers and agencies must act before the settlement funds are distributed. If they wait too long, they risk losing their right to recover payment. To protect all parties, attorneys usually verify, negotiate, and resolve liens during or immediately after the injury claim is settled.

For contractual medical liens, the statute of limitations is generally 4 years from the date payment is due, according to the California Code of Civil Procedure 337. If the agreement was verbal, the statute of limitations is 2 years, as specified in the Code of Civil Procedure 339. These California medical lien deadlines start when the provider should have been paid, typically when the personal injury case is resolved.

For statutory liens, such as those involving Medi-Cal, Medicare, or Veteran Affairs, enforcement is governed by state or federal law. Government programs generally assert their lien rights during the claim process and must act before funds are disbursed to the injured person. For example, under the Hospital Lien Act in the California Civil Code, a hospital must record the lien before the settlement is paid out.

Are There Exceptions to the Statute of Limitations for Medical Liens?

Yes, there are some exceptions to the statute of limitations for medical liens in California, depending on the type of lien and the surrounding circumstances. Although time limits generally apply, there are certain situations where these time limits can be extended or paused. These exceptions help make sure that lienholders aren’t unfairly prevented from recovering payment due to delays beyond their control.

1. If the injured person or their attorney acknowledges the debt in writing or makes a partial payment toward the lien, this can restart the statute of limitations. This rule applies to contractual liens and gives the provider more time to enforce the agreement, starting from the date of the new acknowledgment or payment.
2. If a patient or attorney intentionally hides the settlement or fails to notify the lienholder, courts may allow extra time to file a claim. Such fraud or concealment can toll (pause) the statute of limitations until the provider discovers the wrongdoing. This protects providers of health care services from losing their right to collect simply because they were misled.
3. If the lienholder isn’t properly notified or if the settlement is delayed for a long time, they may still have a valid claim. For statutory liens, especially those involving Medi-Cal, Medicare, or hospital liens, the lienholder must be notified before the settlement is paid out. Courts generally expect lienholders to act promptly, but a delay that wasn’t their fault may justify an exception.
4. If the injured party is legally incapacitated, such as due to a coma, mental illness, or being a minor, or if they file for bankruptcy, the statute of limitations may be paused. These situations can extend the time a lienholder has to pursue repayment. That’s because the law recognizes that the person may not be in a position to resolve the debt immediately.

What Happens if the Statute of Limitations Expires for a Medical Lien?

If the statute of limitations expires for a medical lien in California, the lienholder may lose the legal right to enforce the lien or recover payment through court action. This means the provider, health insurance company, or government agency can no longer sue or collect the debt by legal force. Essentially, the lien becomes legally unenforceable, although the debt may still appear in billing records or credit reports as medical debt.

For statutory liens, failing to record the lien before settlement or not giving proper notice can result in the lien being invalid. And if the lien is not properly asserted before the settlement funds are distributed, the lienholder generally has no further claim on the settlement. This is why attorneys often work to verify and resolve all liens before finalizing a personal injury case.

Sometimes, while not a legal remedy in court, a provider might continue to report the unpaid amount to credit agencies or send bills to the patient. If the statute has expired, the patient has the right to dispute this, especially if the debt is past the 7-year reporting limit under the Fair Credit Reporting Act (FCRA).

However, even after expiration, a lienholder and patient or their attorney may agree to a voluntary repayment. In certain cases, this happens if the lienholder negotiates a reduced amount. In some other cases, the injured party may prefer to settle the matter to avoid credit damage, future billing, or disputes. Note that this is optional, as the patient cannot be forced to pay once the lien is unenforceable.

Should You Hire a Doctor on a Lien Basis in California?

Hiring a doctor on a lien basis in California can be a helpful solution if you need immediate medical treatment but cannot afford to pay out of pocket. However, it’s a decision that comes with both advantages and potential disadvantages. Whether it’s the right choice depends on the nature of your personal injury case, the strength of your claim, and your access to other medical or insurance options.

The main benefit of hiring a doctor on a lien basis is access to immediate medical attention without upfront payment. Apart from that, it can also strengthen your personal injury claim, since documented treatment shows the seriousness of your injuries and creates a clear medical record.

However, the biggest risk is cost. Doctors who work on a lien basis often charge higher rates because they’re taking on financial risk and waiting months or years to get paid. Once your case settles, those charges come directly out of your share, potentially leaving you with less than expected. That’s why it’s important to work with an attorney who has experience handling lien-based treatment and who can negotiate down the lien amounts after your case resolves.

Additionally, some insurance adjusters and defense attorneys may question the credibility of treatment provided on a lien, especially if they suspect overbilling or bias. In such cases, it could impact the value of your claim.

When It Makes Sense

In summary, a lien arrangement may be worth considering if:

• You don’t have health insurance or can’t cover medical expenses.
• You have a strong personal injury case with clear liability.
• You’re working with a skilled personal injury attorney who can manage liens and negotiate reductions.
• The provider has experience with personal injury cases and understands the lien process.

How to Handle Medical Liens and Protect Your Interests in CA

If you don’t manage medical liens properly, they can eat deep into your compensation. But with the right steps, you can minimize what you owe and keep more of your settlement. Here are practical tips to help you handle medical liens effectively:

• Hire a personal injury attorney early. An experienced personal injury attorney can guide you through the lien process from the start. They can review lien agreements before you sign, make sure that providers follow legal procedures, and even negotiate lien reductions when your case settles.
• Review all lien agreements before signing. Don’t sign any lien agreement without reading it carefully. Make sure it clearly states the provider’s rights, the repayment terms, and any limits on the amount they can collect. If the language is overly aggressive, ask your attorney to negotiate fairer terms or look for another provider.
• Keep detailed records of all medical treatment. This includes all medical bills, appointment summaries, lien agreements, and communications with providers. These records help your attorney confirm that charges are related to your injury and are reasonable.
• Confirm that all liens are legally valid. For a lien to be enforceable, it must follow specific rules under the California medical lien laws. For example, hospitals must provide notice of the lien before settlement is paid out. An invalid or improperly filed lien may not have to be honored, so your attorney should verify the legitimacy of each claim.
• Negotiate reductions after settlement. Many providers are willing to accept less, especially if your settlement is limited or if there’s a risk they might receive nothing. Moreover, government agencies like Medi-Cal or Medicare also have procedures for negotiating fair settlement reductions based on hardship or proportionality.
• Plan for liens when calculating your settlement goals. Understand that liens will come out of your final settlement, so factor them in when negotiating the total compensation. Your attorney can help estimate how much you’re likely to owe so you have a realistic picture of your net recovery.

Need Help From an Experienced Personal Injury Attorney?

Whether you’re a patient or a medical provider, understanding the statute of limitations for medical liens can protect your rights and your settlement. To avoid costly mistakes, it’s best to work with a personal injury attorney who understands how medical liens work in your jurisdiction.

If you’re dealing with medical liens in a California personal injury case, Saeedian Law Group can help. We’ll handle the legal details and fight for the best outcome on your behalf. Contact us today for a free consultation and let our experienced team help you get the most out of your case.

FAQ

With over 16 years of experience, we understand that handling medical liens can prompt a lot of questions, especially during a stressful personal injury case. Thankfully, our expert personal injury lawyers at Saeedian Law Group have compiled some quick answers to common questions you may have about how medical liens work and how to protect yourself.

How Can I Find a Doctor Who Will Accept a Medical Lien in California?

Many personal injury attorneys have a network of doctors who are willing to treat patients on a lien basis. You can also search online for lien-based medical care in California or ask your attorney for referrals.

Do Personal Injury Attorneys Work With Lien Doctors?

Yes, most personal injury attorneys regularly work with doctors who accept liens. They often coordinate care and help ensure the provider agrees to wait for payment until the case settles.

What Happens if I Have a Medical Lien but Lose My Case?

If you lose your case, you may still be personally responsible for the medical bills. Some providers may be willing to negotiate or reduce the amount, but the lien itself doesn’t disappear just because the case was unsuccessful.

How to Get a Medical Lien Removed

To remove a medical lien, you or your attorney can try negotiating with the provider to waive or reduce it, especially if there was no settlement. In some cases, you can challenge the lien if it wasn’t properly filed or doesn’t meet legal requirements.

Do California Health Care Providers Generally Accept Medical Liens?

Not all providers do, but many who focus on personal injury treatment will. These include chiropractors, orthopedic specialists, and physical therapy clinics familiar with lien-based billing.

Are There Specific Requirements for Medical Liens to Be Valid in California?

Yes, especially for hospital liens under the Hospital Lien Act. The provider must give proper notice before settlement funds are distributed, and the lien must relate to medical costs for treatment of the injury involved in the case.