Medical Lien Funding vs. Pre-Settlement Funding

Medical lien funding is for healthcare providers who treated an injured plaintiff on a lien basis — deferring payment until the case resolves — and want to convert that receivable into cash now rather than waiting on the litigation timeline, particularly providers carrying a large volume of lien-based receivables across many cases at once.

Pre-settlement funding is for the plaintiff directly, who needs personal cash — for living expenses, bills, or any other purpose — while the case is pending, independent of any medical lien on the case, and is available whether or not any provider on the case has agreed to treat on a lien basis. A plaintiff's need for personal funds is entirely separate from how, or whether, any treating provider has agreed to defer payment.

Criterica Capital purchases the medical lien receivable from the provider, evaluating the underlying case's liability and expected recovery to price the purchase, and collects on the lien directly from case proceeds at settlement rather than the provider having to wait or pursue collection itself, removing the provider from the collections process entirely. The purchase price reflects Criterica Capital's own view of the case, which can differ from the provider's original assessment when the lien was extended.

The funder evaluates the plaintiff's case and advances a portion of the anticipated net settlement directly to the plaintiff, with repayment handled through the attorney's trust account at settlement, entirely separate from any medical lien the provider holds, and requiring no involvement from any treating provider.

The provider sells the lien at a discount to its face value, reflecting the time value of money and the risk that the case resolves for less than expected or takes longer than anticipated — the provider trades some value for immediate liquidity and certainty rather than carrying the receivable at full value for an uncertain period. Providers with a large volume of lien-based receivables can achieve meaningful cash-flow predictability by selling on a recurring basis rather than case by case.

The plaintiff's cost is structured as simple interest accruing on the advance until settlement, contingent on the case's success, and is entirely separate from whatever discount, if any, the medical lien was sold at, since the two transactions price two different receivables on the same case.

The purchaser of the lien assumes the risk that the case resolves for less than the net recovery needed to satisfy the lien in full, or that the case fails outright — the provider is paid at the time of purchase regardless of the ultimate case outcome, fully transferring that risk away from the provider's books.

The plaintiff's advance is non-recourse to the plaintiff personally; if the case fails, the plaintiff owes nothing, though the priority of medical liens, attorney fees, and any pre-settlement funding in the disbursement waterfall determines what, if anything, remains for the plaintiff at closing. Because repayment is capped at net recovery, a plaintiff facing a modest settlement after multiple liens and fees is still protected from any personal shortfall.

Medical lien funding wins for providers who would otherwise wait years for a lien-based case to resolve and prefer certain, immediate payment over the full face value of the lien later, particularly providers managing lien receivables across a large caseload. It is particularly valuable for smaller practices for whom a large volume of unpaid lien receivables can create real cash-flow strain.

Pre-settlement funding wins for the plaintiff who needs cash personally during the case, regardless of whether any medical liens exist on the matter, since the plaintiff's own need for funds is independent of how any provider is being paid.