When you’re injured in a car accident, medical bills can pile up quickly — long before your case settles. Fortunately, California law allows injured victims to receive necessary treatment through a medical lien, giving them access to care even if they can’t pay upfront.

But while medical liens can bridge the gap between treatment and recovery, they also affect your settlement and must be handled carefully. Here’s what every personal injury claimant should know. 

1. What Is a Medical Lien?

A medical lien is a legal agreement between you and your healthcare provider in which the provider agrees to delay payment for your treatment until your case settles.

In exchange, you (or your attorney) promise to pay the provider directly from your settlement or judgment proceeds.

This arrangement allows accident victims to access medical care immediately — even if they don’t have health insurance or funds to pay out of pocket. 

2. Common Providers Who Use Liens

Medical liens are often used by:

· Orthopedic surgeons and pain management specialists

· Chiropractors and physical therapists

· Imaging centers (MRI, CT scan facilities)

· Hospitals or urgent care centers

· Surgery centers or anesthesiologists

Some third-party companies also purchase medical liens from providers, making them lienholders with legal rights to repayment. 

3. How Liens Affect Your Settlement

While liens enable treatment, they also reduce your net recovery. The lien amount must typically be paid before you receive your share of the settlement.

For example:
If your settlement is $100,000 and there’s a $20,000 medical lien, that $20,000 is deducted and paid to the lienholder unless your attorney successfully negotiates a reduction.

Importantly, attorneys have a duty under California law to honor valid liens and satisfy them from client trust accounts before disbursing funds.

4. Negotiating Lien Reductions

An experienced personal injury attorney can often negotiate lien reductions once the case resolves.
Factors that help achieve reductions include:

· The overall settlement amount (especially if limited by policy limits)

· The ratio between medical bills and total recovery

· Provider cooperation and preexisting agreements with the law firm

· Demonstrated financial hardship or comparative fault considerations

Reductions can substantially increase your net payout, ensuring the lienholder is compensated fairly without consuming the entire settlement.

5. Health Insurance vs. Liens

If you have health insurance, your provider may cover the treatment and later assert a right of reimbursement — which is slightly different from a lien.

Health insurers, including Medi-Cal or Medicare, have statutory recovery rights that must be repaid from your settlement, though they’re often subject to federal and state reduction formulas. 

Final Thoughts

Medical liens are powerful tools that help personal injury victims access treatment without immediate payment. However, they must be managed strategically to prevent them from eroding your final recovery.

Before signing a lien agreement, talk to an attorney who can review the terms, communicate with your medical providers, and negotiate on your behalf.

Injured and Worried About Medical Bills?
At CHH Law, P.C., we routinely work with medical providers on lien-based treatment and ensure that our clients’ settlements are maximized through careful negotiation.
Contact us today for a free consultation to discuss your accident and treatment options.