Several years ago, while I was attending Parker Seminars in Las Vegas, I ran into a personal injury collections attorney who was starting his business teaching other chiropractors and healthcare providers how to work with personal injury attorneys. At that time, I was focused more on the cash practice with my new clinic in Petaluma. However, when he talked to me about the rewards and risks of treating personal injury patients, I remembered how much I really enjoyed working with whiplash patients. He mentioned treating patients on liens, and I was intrigued. I started looking more into it and decided to pivot my practice towards a personal injury-focused practice, and I'm glad I did. I find these patients to be more rewarding, more compliant, and easier to work with than most others.
In the world of chiropractic and medical care, few decisions carry as much weight as whether to accept personal injury (PI) patients on a lien. These are the patients who have been injured—often in car accidents or other incidents—and who can’t afford treatment upfront. Instead, they sign a legal agreement (the “lien”) stating that payment for services will come from their eventual settlement. It’s a leap of faith for the practitioner, requiring patience and risk tolerance, yet it often leads to a higher rate of reimbursement and a chance to help individuals when they need it most.
One of the most compelling reasons to treat patients on a lien is the potential for increased reimbursement compared to other payer types. Consider common alternatives: cash-paying patients can provide instant payment but often balk at higher treatment costs, threatening their compliance. Insurance-based patients are usually more reliable about attending care, but insurance carriers can impose low reimbursement rates and administrative hassles. Meanwhile, Medicare—though consistent—pays notably low rates. For example, in Petaluma, CA (ZIP code 94954), the Medicare reimbursement for CPT code 98941 (3-4 region spinal adjustment) often sits around the mid-$30 range, and that’s before co-pays and deductibles come into play. In contrast, a personal injury lien, once settled, can recover much more substantial fees for the exact same service.
On top of that, patients in personal injury cases are typically highly motivated to follow the recommended treatment plan. Their legal case—and by extension, any financial settlement they might receive—often hinges on their medical records and documented progress. By working on a lien, healthcare providers can guide patients through a comprehensive treatment plan without the constant worry that finances will derail their care. Patients who might otherwise cut corners or stop scheduling appointments can now fully commit to their recovery, knowing they only owe once their case is resolved.
In the video above, the attorney calls the lien an IOU. I like this approach because that's what it is. You're treating a patient, and they do not pay out of pocket. Instead, they build up a substantial IOU. This bill could be in the form of thousands of dollars. This is a promise to pay. Somebody is promising to pay. Technically, it's the patient who is promising to pay, but in California, we collect from the attorney. We rely on ethical attorneys to pay our bill in full or nearly in full, depending on how the case settles. We also assume risks as below.
Despite these advantages, accepting personal injury liens is not without its risks. The most obvious challenge is the waiting period for reimbursement. Depending on how long litigation or settlement negotiations take, months or even years may pass before a provider sees payment. This can strain a practice’s cash flow, especially if a large portion of the patient population consists of PI cases. Compounding the delay, some attorneys may pressure providers to reduce their bills to fit within settlement constraints, creating a possible loss of revenue. There’s also the prospect of encountering unscrupulous attorneys who place a doctor’s lien at the bottom of the payout list, leaving little left to satisfy the full bill. Proper screening of attorneys and clear communication from the start can help mitigate these problems, but there’s always an element of unpredictability.
As of the time of this blog post in 2025, I have at least two patients whom I treated in 2022 for whom I am still waiting to get paid. These patients are in the litigation phase, which is why it has taken so long. Most patients are pre-litigation. It's a settlement between the attorney and the insurance company. It does not go to trial, so it is usually faster. I have found that local attorneys in Sonoma County will process pre-litigation patients faster than those in Southern California.
When the time comes to treat a personal injury patient on a lien, the administrative process itself demands due diligence. During the intake, you should gather basic information about the accident (dates, location, any applicable insurance), confirm attorney representation, and ensure the patient truly understands the implications of lien-based care. Next, you’ll want the attorney to sign a formal lien agreement, one that clearly outlines billing rates, anticipated services, and the expectation of full payment upon settlement. Documentation throughout care becomes especially critical: comprehensive chart notes, detailed reports, and timely updates to the attorney strengthen both the patient’s legal case and your position for reimbursement. Finally, once treatment ends, you’ll compile all relevant paperwork, finalize invoices, and wait for the attorney to disperse any settlement funds, ideally without substantial negotiation over your fees.
In California, personal injury providers and attorneys must navigate several critical legal precedents and regulations that affect how medical bills are treated—and ultimately paid—once a case settles. Two of the most frequently cited cases in this arena are Howell v. Hamilton Meats & Provisions, Inc. (2011) and Pebley v. Santa Clara Organics (2018). These rulings, alongside other guidance such as Corenbaum v. Lampkin (2013), shape the framework for determining the value of medical services, reimbursement rates, and how much a provider can ultimately recover on a lien.
Howell v. Hamilton Meats & Provisions, Inc. (2011)
The Howell decision from the California Supreme Court set a pivotal precedent regarding the relationship between the amount a medical provider bills and the amount that can be recovered in a personal injury lawsuit. Specifically, the Court held that a plaintiff’s economic damages for past medical expenses are limited to the lesser of:
1. The amount the plaintiff or their insurer actually paid, or
2. The reasonable value of the medical services rendered.
This means that if a chiropractor or other healthcare provider bills a certain figure but ultimately accepts a reduced amount—either from insurance or through negotiation—the defendant (or their insurer) can argue that the lower figure is the true measure of “reasonable value.” In lien-based cases, Howell often factors into settlement negotiations, as attorneys defending the claim may point to prevailing rates or actual accepted amounts from other cases to justify a lower reimbursement figure.
Pebley v. Santa Clara Organics (2018)
The Pebley case further clarified how California courts view medical billing in personal injury actions. In Pebley, the plaintiff chose to treat outside of their insurance network, incurring charges that were higher than what would typically be paid through an in-network provider. The appellate court ruled that when a plaintiff elects or is forced to treat out-of-network, the proper measure of damages is still the “reasonable value” of the medical services. This could mean that the patient (and provider) may recover more than typical insurance rates—if they can demonstrate that those higher out-of-network charges reflect the fair market value of the services.
For providers who treat on a lien, Pebley serves as both a caution and an opportunity: while you may justify higher charges because of more specialized care, you must still be prepared to demonstrate that your fees align with a reasonable and customary value in the region. See below.
Corenbaum v. Lampkin (2013)1
Another notable case, Corenbaum, reinforced that the total amount billed by a medical provider cannot be presented as evidence of damages if that full amount is never actually paid. Instead, the court upheld that only amounts actually paid or incurred (or the reasonable value of the services) are relevant to determining damages. For lien-based providers, this underscores the importance of thorough documentation and a defensible fee schedule that reflects local market rates.
Practical Implications for Lien-Based Care
1. Documentation of Fees: Given the scrutiny on what constitutes “reasonable value,” it is essential to maintain clear and consistent fee schedules. You should be ready to justify your rates with supporting data on prevailing charges in your geographic area and specialty.
2. Negotiation Dynamics: Defense attorneys often leverage these cases to argue that medical bills are over-inflated, seeking to reduce settlement payouts—and your eventual lien reimbursement. A solid understanding of Howell, Pebley, and Corenbaum allows you to anticipate these arguments and present counter-evidence supporting your fees.
3. Attorney Partnerships: California’s legal framework incentivizes collaboration between providers and attorneys who understand the nuances of personal injury reimbursement. This partnership can mitigate the risk of severe lien reductions, particularly when both parties agree on the “reasonable value” concept.
4. Setting Patient Expectations: Whether a lien arises from an out-of-network choice (as in Pebley) or simply from a patient’s inability to pay upfront, both you and your patients should be aware that settlement negotiations hinge on these legal precedents. Educating your patients on how and why fees may be disputed—or reduced—helps maintain trust throughout the protracted lien process.
Overall, Howell v. Hamilton Meats2, Pebley v. Santa Clara Organics3, and related California jurisprudence highlight that while treating personal injury patients on a lien can ultimately offer higher reimbursements, it also comes with legal scrutiny. Thorough documentation, careful fee justification, and proactive collaboration with ethical attorneys can ensure that you recover fair compensation for your services, aligning with both patient welfare and California’s evolving legal standards.
1. Establishing “Usual, Customary, and Reasonable” Fees
In California, the concept of charging “usual, customary, and reasonable” (UCR) fees arises frequently in personal injury cases—especially in light of Howell v. Hamilton Meats and Pebley v. Santa Clara Organics, which emphasize the “reasonable value” of medical services. While the law does not prescribe a single formula to determine these fees, courts and attorneys often rely on market-based data to decide what is fair. One practical, objective resource is fairhealthconsumer.org. This nonprofit platform compiles geographically tailored data on healthcare costs, letting you compare your proposed fees to prevailing rates in your area.
Using a site like Fair Health Consumer helps you show that your charges align with the going market rate. For example, if you are billing CPT 98941 (3-4 region spinal adjustment) in the Petaluma, CA (ZIP code 94954) region, you can see typical out-of-network charges or “allowed” amounts that reflect local pricing norms. This can bolster your position during lien negotiations, especially when an opposing party attempts to argue that your charges are inflated.
2. Relevant California Rules and Regulations
• Reasonable Value Standard
Under Howell, a plaintiff’s recovery for past medical expenses is capped at the lesser of (1) the amount actually paid or (2) the reasonable value of services. When you set your fees, you must be prepared to demonstrate that they reflect legitimate market values, not arbitrary or unsubstantiated markups.
• Out-of-Network vs. In-Network Charges
The Pebley decision acknowledges that patients can seek out-of-network providers, who may charge more than in-network rates, as long as those fees remain “reasonable” for your particular region and specialty. This underscores the importance of documenting why your higher out-of-network rate is justified—e.g., specialized care, advanced equipment, or recognized local fee standards.
• Medico-Legal Scrutiny
In a personal injury context, defense counsel (or the court) can challenge fees seen as excessive. Thorough documentation of your fee schedule and references to neutral data (like Fair Health Consumer) help demonstrate that your rates are not inflated beyond community norms.
3. Common Methods for Setting Fees — Pros & Cons
1. Basing Fees on FairHealthConsumer.org or Similar Benchmark
• Pros:
• Strong justification for “reasonable” charges in court or during negotiations.
• Easy for attorneys, adjusters, and courts to reference a standardized database.
• Cons:
• May require regular updates as the data changes, adding administrative tasks.
• Might not reflect highly specialized treatments or unique modalities in your practice (you may need additional data to justify above-average fees).
2. Using Your Standard Cash/Insurance Rates
• Pros:
• Simple approach: consistent across all patient categories.
• Less administrative time spent updating a “special” PI fee schedule.
• Cons:
• Standard rates may be too low if originally pegged to low-reimbursement carriers (e.g., Medicare or certain HMOs).
• Courts could question your “true” usual fee if you constantly discount it for cash or insurance patients.
3. Charging at the Upper Range of Usual & Customary (Out-of-Network)
• Pros:
• Potentially higher return for your services, especially if justified by your expertise, equipment, or extended care.
• Can compensate for long wait times on liens and negotiation risks.
• Cons:
• Greater scrutiny from defense attorneys and possibly the court.
• Higher likelihood you’ll be asked to reduce your bill during negotiations to match settlement constraints.
Best Practices for Fee Setting and Negotiation
1. Document Everything
Maintain a clearly defined fee schedule that you apply consistently. If you offer discounts (e.g., time-of-service or hardship discounts), keep comprehensive records and policies showing how and why you do so.
2. Demonstrate Market Rates
Print or export cost references from Fair Health Consumer, relevant regional studies, or insurance fee schedules (if publicly available) to substantiate your charges. This is particularly helpful if you plan to bill at the higher end of the local range.
3. Explain Your Specialty or Additional Value
If you have advanced certifications or specialized equipment that justify higher fees, include that explanation in your medical narratives. The more value you can prove, the stronger your argument when someone challenges your bills.
4. Seek Legal Counsel
Collaboration with attorneys or professional billing consultants can protect you from inadvertently violating California’s insurance or consumer-protection laws. A knowledgeable legal advisor can also help you craft lien agreements that stand up to scrutiny.
5. Regularly Revisit Your Fee Schedule
Market conditions and regional cost data change over time. Make an annual or biannual review of your rates and available benchmarking tools (e.g., Fair Health Consumer) to ensure your fees remain aligned with recognized norms.
It’s understandable why some providers might think twice before extending treatment on a lien. The lack of immediate payment and the specter of difficult attorney negotiations can be daunting. Yet, for those with the organizational systems and financial reserves to handle delayed payments, there can be a significant upside. Not only do you stand to earn rates that surpass traditional insurance and especially Medicare, but you also provide a vital service to patients who might otherwise go untreated. Additionally, your willingness to accept these cases can result in stronger relationships with local personal injury attorneys, translating to more referrals over time.
Ultimately, the decision to treat personal injury patients on a lien comes down to your practice’s priorities and risk tolerance. If your practice can absorb the delayed revenue, embrace thorough documentation, and implement a solid plan for managing liens, you’ll likely find that personal injury work can enrich both your bottom line and your commitment to providing essential care. While the downsides are real, the benefits—higher reimbursement, increased patient compliance, and the satisfaction of guiding injured individuals back to health—are often well worth the extra effort.
