The purpose of personal injury settlements is to make injured people whole for their medical bills, lost wages, and suffering. However, for many people, there can be a long wait for their final payment after settling their case.
Many people think that they will receive their settlement check right away; unfortunately, the processes associated with administration, law, and finance can greatly extend the duration of the wait for the injured party.
Knowing what happens aftera settlement can help with your confusion and lessen the stress associated with waiting for your settlement check to arrive.
Your settlement payment moving through several different stages of the payment process involves different people and a lot of different types of documents that need to be reviewed and approved before you receive your settlement payment.
1. What Are The Delays Caused by Paperwork Processing in Settlement?
Payments can be attributed to:
- Incomplete paperwork (including legal release forms)
- Error in medical billing records
- Incorrect personal information (or financial information)
- Mail delays in documents between parties.
Administrative errors may cause more delays, depending on the size of those errors, before they can proceed.
2. What Are The Processes Used by Insurance Companies That Slow Payment?
Insurance companies have procedures in place to process payments after they receive all required approved documentation from affected parties.
Some Procedures Used by Insurance Companies:
- Many approvals will be needed to process large amounts.
- Fraud prevention can take time, even if it is only one of the approvals.
- Financial processing/transaction processes can take time depending on insurance company policies, etc.
Claims departments may experience workload backlogs, which will only serve to aid in delaying payments as well. The internal checks used to validate/investigate payments can take from a day to weeks to complete from start to finish, based on the complexity of the claim under review.
3. Can Medical Liens Delay Settlement Checks?
Yes, before funds can be distributed, operations must settle all medical liens.
Operations will take note of the following:
- Hospitals will want to collect from settlement funds.
- The health insurance company will submit a claim for reimbursement of costs incurred related to the case.
- If applicable, a government program may have a lien associated with the operation of any required medical assistance.
4. Will Attorney Processing Time Impact Speed of Payment?
The attorney is a critical link in the ultimate distribution of funds from the settlement.
The following activities are necessary for proper distribution:
- Depositing the settlement check in the attorney’s trust account
- Clearing the bank hold period
- Deducting all case-related legal fees and expenses
- Issuing a final payment to the client
Attorneys must follow strict guidelines set forth by ethical and financial regulations to guarantee proper distribution of the funds from the settlement.
5. What Causes Banking and Financial Holds?
Holds can happen for a short period of time when depositing a large check.
Reasons for banking/financial institution holds include:
- Anti-fraud security procedures;
- Institution policies relating to large transactions;
- Validating funds on interbank transfers; and
- Delay at either the national or international level in clearing funds.
6. Could Disagreements Between Parties Result in Delays?
Disputes regarding settlement terms can result in problems such as:
- Provider’s late submission of claims
- Questions about payment allocation
- Administrative delay in communication
- Funds will not be released until these types of disputes have been resolved.
Conclusion
- Settlement delays are usually related to process issues, as opposed to a desire to delay the payment.
- The accuracy of paperwork will lead to shorter timelines for payments.
- Insurance reviews will be the norm for most circumstances.
- Before payment may be made to the medical provider, all medical liens must be cleared.
- Attorneys will ensure the legality and financial compliance of the processed settlement funds.
- If a financial transaction is a large sum, banks perform security checks to prevent loss