Lien Management - Technical Specification

Medical lien tracking and settlement system

Purpose

The Lien Management module handles the creation, tracking, and resolution of medical liens against legal cases. Medical providers place liens to secure payment for services rendered to patients involved in personal injury cases. The system manages lien documentation, tracks lien amounts, handles negotiations, processes lien settlements, and ensures proper distribution of settlement funds to lien holders.

Key Concepts

Term	Definition
Medical Lien	Legal claim against case settlement for medical services
Lien Holder	Entity holding the lien (provider, hospital, etc.)
Lien Amount	Claimed amount for medical services
Lien Priority	Order of payment from settlement
Lien Negotiation	Process of reducing lien amounts
Lien Resolution	Final settlement of lien
Letter of Protection (LOP)	Agreement to pay from settlement
Lien Reduction	Negotiated decrease in lien amount
Lien Release	Document releasing lien after payment
Statutory Lien	Lien required by law (Medicare, Medicaid)

User Roles

Role	Description	Permissions
Lien Manager	Manages all liens	Full CRUD
Case Manager	Reviews case liens	Read, Update status
Attorney	Negotiates liens	Read, Update amounts
Paralegal	Processes lien documents	Create, Read, Update
Financial Analyst	Reviews lien finances	Read, Calculate
Settlement Processor	Handles lien payments	Read, Process payment
System Administrator	System configuration	All permissions

Field Documentation - Lien Entity

Field Name	Type	Required	Description	Validation Rules	Related Entity
ID	String	Yes	Unique lien ID	Auto-generated CUID	Primary Key
Lien Number	String	Yes	Human-readable number	Format: LIEN-YYYY-XXXXXXX	-
Legal Case	LegalCase	Yes	Associated legal case	Must be active case	LegalCase
Patient	Patient	Yes	Patient receiving services	Must match case patient	Patient
Lien Type	String	Yes	Type of lien	Enum: Medical, Hospital, Statutory, Subrogation, Other	-
Lien Sub Type	String	No	Specific lien category	Based on lien type	-
Lien Holder Name	String	Yes	Entity holding lien	Max 200 chars	-
Lien Holder Type	String	Yes	Type of holder	Enum: Provider, Hospital, Insurance, Government	-
Vendor	Vendor	No	If vendor is lien holder	Valid vendor	Vendor
Provider	ClinicalProvider	No	If provider holds lien	Valid provider	ClinicalProvider
Tax ID	String	No	Lien holder Tax ID	Format: XX-XXXXXXX	-
Contact Name	String	Yes	Lien contact person	Max 200 chars	-
Contact Phone	String	Yes	Contact phone	10 digits	-
Contact Email	String	No	Contact email	Valid email format	-
Contact Address	String	Yes	Mailing address	Max 500 chars	-
Filing Date	DateTime	Yes	When lien filed	Cannot be future	-
Service Start Date	DateTime	Yes	First service date	Cannot be future	-
Service End Date	DateTime	No	Last service date	After start date	-
Original Amount	Decimal	Yes	Initial lien amount	Positive decimal	-
Current Amount	Decimal	Yes	Current lien balance	>= 0	-
Negotiated Amount	Decimal	No	Agreed reduction	<= Original amount	-
Reduction Amount	Decimal	No	Amount reduced	Original - Negotiated	-
Reduction Percentage	Decimal	No	Percent reduced	0-100	-
Final Amount	Decimal	No	Amount to be paid	After all reductions	-
Interest Rate	Decimal	No	Interest rate if applicable	0-50%	-
Interest Amount	Decimal	No	Accrued interest	Calculated field	-
Priority Level	Integer	Yes	Payment priority	1 (highest) - 99	-
Lien Status	String	Yes	Current status	Enum: Filed, Verified, Negotiating, Agreed, Paid, Released, Disputed	-
Status Date	DateTime	Yes	When status changed	Auto-updated	-
Status Reason	String	No	Reason for status	Required for some statuses	-
Verification Status	String	Yes	Validation status	Enum: Pending, Verified, Invalid	-
Verification Date	DateTime	No	When verified	Set on verification	-
Verified By	User	No	Who verified	Valid user ID	User
LOP Sent	Boolean	Yes	Letter of Protection sent	Default false	-
LOP Date	DateTime	No	When LOP sent	Required if sent	-
LOP Document	Document	No	LOP file	PDF format	Document
Lien Document	Document	No	Original lien filing	PDF format	Document
Supporting Documents	Document[]	No	Bills, records, etc.	Multiple allowed	Document (1:Many)
Negotiation Notes	Text	No	Negotiation history	Max 5000 chars	-
Negotiation Date	DateTime	No	Last negotiation	Updated on negotiation	-
Negotiated By	User	No	Who negotiated	Valid user ID	User
Payment Status	String	Yes	Payment state	Enum: Unpaid, Partial, Paid, Void	-
Payment Date	DateTime	No	When paid	Required if paid	-
Payment Amount	Decimal	No	Amount actually paid	Required if paid	-
Payment Method	String	No	How paid	Enum: Check, Wire, ACH	-
Payment Reference	String	No	Check/transaction number	If paid	-
Release Document	Document	No	Lien release	Required after payment	Document
Release Date	DateTime	No	When released	After payment	-
Medicare Lien	Boolean	Yes	Is Medicare lien	Default false	-
Medicaid Lien	Boolean	Yes	Is Medicaid lien	Default false	-
ERISA Lien	Boolean	Yes	Is ERISA plan	Default false	-
Statutory Lien	Boolean	Yes	Required by law	Default false	-
Perfected	Boolean	Yes	Legally perfected	Default false	-
Expiration Date	DateTime	No	When lien expires	If applicable	-
Related Claims	Claim[]	No	Associated claims	For verification	Claim (1:Many)
Related Bills	MedicalRecord[]	No	Medical bills	Supporting docs	MedicalRecord (1:Many)
Notes	Text	No	Internal notes	Max 5000 chars	-
Created At	DateTime	Yes	Creation timestamp	Auto-generated	-
Updated At	DateTime	Yes	Update timestamp	Auto-updated	-
Created By	User	Yes	Creating user	Valid user ID	User
Updated By	User	Yes	Updating user	Valid user ID	User

Workflows

Lien Filing Workflow

1. Lien Receipt

   • Receive lien notice
   • Identify legal case
   • Verify patient match
   • Check service dates

2. Lien Documentation

   • Upload lien document
   • Enter lien details
   • Record lien amount
   • Set priority level

3. Verification Process

   • Verify lien holder
   • Validate services rendered
   • Check for duplicates
   • Confirm amounts

4. Recording

   • Create lien record
   • Update case liens total
   • Alert case manager
   • Send to attorney

5. LOP Processing

   • Generate Letter of Protection
   • Send to lien holder
   • Track acknowledgment
   • File documentation

Lien Negotiation Workflow

1. Pre-Negotiation Review

   • Review medical records
   • Verify services
   • Calculate reasonable value
   • Check comparable rates

2. Negotiation Initiation

   • Contact lien holder
   • Present settlement status
   • Propose reduction
   • Document discussions

3. Negotiation Process

   • Exchange offers
   • Review counteroffers
   • Calculate impact
   • Seek approval

4. Agreement

   • Finalize amount
   • Document agreement
   • Update lien record
   • Obtain written confirmation

Settlement Distribution Workflow

1. Settlement Preparation

   • List all liens
   • Verify amounts
   • Calculate priorities
   • Determine distribution

2. Lien Payment Calculation

   • Apply priority rules
   • Calculate pro-rata if needed
   • Deduct from settlement
   • Prepare payment schedule

3. Payment Processing

   • Generate payments
   • Process checks/transfers
   • Track payment status
   • Document payments

4. Lien Release

   • Obtain release documents
   • Verify full satisfaction
   • File releases
   • Close lien records

Statutory Lien Workflow

1. Medicare/Medicaid Check

   • Query beneficiary status
   • Request conditional payment
   • Calculate reimbursement
   • Set aside if required

2. Compliance Process

   • Follow statutory requirements
   • Meet reporting deadlines
   • Maintain documentation
   • Track correspondence

3. Resolution

   • Negotiate if allowed
   • Process payment
   • Obtain final demand
   • Secure release

Business Rules

Filing Rules

• Lien must be filed within statutory period
• Must relate to case accident/injury
• Service dates must be after accident
• Lien holder must be verified
• Amount must match supporting documentation

Priority Rules

• Statutory liens paid first (Medicare/Medicaid)
• Hospital liens typically second
• Provider liens by filing date
• Attorney fees after medical liens
• Patient receives remainder

Negotiation Rules

• Cannot negotiate statutory liens below requirements
• Reductions require written agreement
• Must maintain negotiation documentation
• Attorney approval for significant reductions
• Consider total settlement amount

Payment Rules

• Payment requires signed release
• Must pay agreed amount in full
• Payment within settlement timeframe
• Maintain payment proof
• Cannot pay without case settlement

Compliance Rules

• Medicare Secondary Payer (MSP) compliance
• Medicaid recovery requirements
• ERISA plan requirements
• State lien law compliance
• Reporting obligations

Integrations

System	Integration Type	Purpose
Legal Case System	Direct Database	Case association
Claims System	Direct Database	Verify services
Financial System	Direct Database	Payment processing
Document Management	File System	Lien documents
Medicare System	API/Portal	Statutory lien check
Payment System	API	Check/ACH processing
Settlement System	Direct Database	Distribution calculation

Common Issues

Issue	Description	Resolution
Duplicate Lien	Same services, multiple liens	Consolidate liens
Invalid Amount	Lien exceeds actual charges	Verify with bills
Missing LOP	No protection letter	Generate and send
Expired Lien	Past statutory period	May be invalid
No Release	Payment without release	Hold payment, get release
Medicare Issues	MSP compliance problems	Consult compliance team

Screenshots Needed

• Lien Dashboard
• Lien Entry Form
• Lien Search Grid
• Negotiation Tracker
• Settlement Distribution Calculator
• Priority Management
• Payment Processing Screen
• Release Document Manager
• Statutory Lien Workflow
• Lien Report Generator

Performance Considerations

• Quick lien total calculation
• Efficient priority sorting
• Fast settlement distribution calc
• Document retrieval speed
• Bulk lien processing

Security Considerations

• Financial data protection
• HIPAA compliance for medical info
• Attorney-client privilege
• Secure document storage
• Audit trail for negotiations
• Payment authorization controls

Notes

• Statutory lien requirements vary by state
• Medicare Set-Asides may be required
• Lien reduction impacts attorney fees
• Some liens have super-priority status
• Release documents are critical for closure