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Glossary

Lien

A legal claim on part of your settlement by someone who paid for your care, such as a hospital, health plan or Medicare.

Last reviewed By the Editorial team 1 min read

General information, not legal advice. Talk to a licensed attorney in your state.

Quick answer

A lien is a legal claim on part of your settlement by someone who paid for your care, such as a hospital, a health plan or Medicare. It is usually paid out of the settlement before the rest goes to you.

In a car accident claim#

Several kinds of liens are common after a crash:

  • Medicare. Medicare must be repaid its conditional payments when a settlement, judgment or award is paid. Interest is charged if the debt is not resolved 60 days after Medicare's demand letter.
  • Medicaid. People who get Medicaid assign to the state their rights to payment for medical care from any third party, so the state can recover what it paid.
  • Hospitals. Many states give hospitals a lien by statute. In Texas it applies if the person was admitted within 72 hours of the crash, and a release of the claim is not valid unless the hospital's charges were paid or the hospital is a party to the release.
  • Health plans. Many plans have a right to be repaid, often through Subrogation. An insurer's right to be repaid from your settlement for what it already paid on your behalf. Glossary.

Liens can often be negotiated. Medicare, for example, gives a pro-rata reduction of the amount owed for your lawyer's fees and other costs of getting the settlement. The Settlement. An agreement to resolve a claim for an agreed payment, usually in exchange for giving up the right to sue. Glossary agreement usually says who pays each lien, and rules such as the Made-whole doctrine. A rule used in many states that an insurer or health plan should not be repaid from your recovery until you have been fully compensated. Policy or plan wording can sometimes override it. Glossary can limit what a health plan takes. Our guide to medical liens and subrogation explains each kind in detail.

Example#

Questions people ask

Can a lien be reduced?

Often. Many lienholders accept less, and some rules require a reduction, such as Medicare's reduction for the cost of getting the settlement. A health plan's rights depend on its terms and on state or federal law.

Is a lien the same as subrogation?

They overlap. Subrogation is an insurer's right to recover what it paid from the at-fault party. A lien is a claim attached to your recovery itself. Both are usually paid out of the settlement.

Sources

  1. United States Courts, Glossary of legal terms — general definition of a lien
  2. CMS, Non-Group Health Plan (NGHP) Medicare Secondary Payer (MSP) Beneficiary Reference Guide v1.0 — as of October 2026
  3. Cornell LII, 42 U.S.C. § 1396k(a)(1)(A) — as of October 2026
  4. Texas Legislature, Property Code § 55.002(a) — as of October 2026
  5. Texas Legislature, Property Code § 55.007(a) — as of October 2026

Last reviewed October 29, 2026 by the Accident Claim Facts editorial team. Found an error? Tell us.

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