If you are receiving a settlement from a personal injury case, you are likely depending on that money to cover medical expenses and help compensate for lost wages as a result of the injury you have sustained. Understanding how a personal injury settlement will be paid out can be complicated, and it’s especially important to understand how a VA or Tricare lien can impact the amount you get from a settlement.
It’s possible that a lien will reduce the amount you receive from your settlement, and that can make it difficult to cover the expenses you have accrued as a result of the personal injury. It can be frustrating as a veteran with an injury to face yet another barrier to receiving the compensation you need — especially if you’ve already undergone a lengthy lawsuit procedure to get the settlement in the first place.
Let’s take a closer look at what a VA or Tricare lien is and how it might impact your personal injury settlement amount.
The VA is the Department of Veteran Affairs, and Tricare is a health insurance provider for military personnel and retirees. If you are a qualified enrollee in Tricare, then this federal government program will likely cover some of your expenses if you are injured in a situation that may result in a personal injury lawsuit. Car accidents are among the most common of these occurrences.
Due to the Medical Care Recovery Act (MCRA), being enrolled in Tricare may affect your personal injury settlement. MCRA is a federal law that states “when the Federal Government provides treatment or pays for treatment of an individual who is injured or suffers a disease, the Government is authorized to recover the reasonable value of that treatment from any third party legally liable for the injury or disease.”
To put it simply, if the VA or Tricare has provided treatment or payment for treatment due to an injury and you later receive a personal injury settlement for the same injury, the VA or Tricare is eligible to collect the amount they paid in treatment from the settlement you receive. In order to collect these funds, the VA or Tricare will place a lien against any future funds awarded due to the injury. Tricare operates under unique circumstances, and the insurance provider is not required to notify you of the lien in advance.
If you have a lien from the VA or Tricare, a portion of your personal injury settlement will likely be used to reimburse the VA or Tricare for the medical treatment you received. There is no cap on the amount that Tricare can receive — either in total amount or as a percentage of the settlement. What this means is that if the medical expenses that Tricare covered are high enough, your entire settlement could be used to reimburse Tricare, leaving you with no additional funds from the personal injury lawsuit.
Tricare liens are typically deducted before any other liens or fees (with the exception of Medicare liens). This means that once you receive the settlement amount, Tricare will receive their total portion (or as much of it as possible if the settlement is lower than the Tricare lien). After that, any additional liens from other entities and attorney fees will be deducted from the remaining amount. Whatever is left over will go to you as a direct payment from the settlement.
It may be frustrating to find out that much of your settlement will be deducted before you receive any money to use for medical expenses and lost wages. However, it is important to note that there are options for disputing or renegotiating a Tricare lien.
First, there is an option to apply for a reduction in the lien amount based on hardship. If you can demonstrate a pressing need for the funds from your personal injury settlement, you may be able to successfully negotiate a lower amount for the VA or Tricare lien, leaving you with a bigger portion of the settlement to use on your own expenses.
Secondly, the VA or Tricare can only place a lien for the amount of the actual expenses related directly to the personal injury for which the settlement was awarded. It can be worthwhile to go through medical records with careful attention to detail and see if there are any reported expenses included in the lien amount that were not actually related to the injury in question. If so, these expenses would be removed from the lien amount, providing you with more direct payment.
Please fill out the form below, or give us a call, and we will get back to you as soon as possible. The more detail you can provide, the better we can determine if we can help you. (And even if we can’t take your case, we will do our best to offer other options, and point you in the best direction we can!)