LIENS
Welcome to Synergy’s blog page dedicated to the topic of lien resolution. Our team of subrogation experts share their InSights and knowledge on the latest developments and best practices in lien resolution. Stay up-to-date with the latest trends and strategies to ensure that you have the information you need to navigate the complexities of lien resolution.
You settled the case. Medicare was paid back. The file is closed. Or so you thought.
If your client had a Medicare Advantage Plan, also known as Part C, that “closed” file could come back to haunt you. Part C liens are the sleeper issue in Medicare Secondary Payer Act (MSP) compliance. Miss one, and your firm could be liable for double damages under a private cause of action brought under the MAO.
Here’s what you need to know to protect your clients and your practice.
What Makes Part C So Dangerous?
Medicare Advantage Plans are not the same as traditional Medicare. They are private insurance plans approved by Medicare that bundle Part A, B, and D benefits. But unlike traditional Medicare, there’s no central clearinghouse like BCRC or CMS that alerts you to Part C lien exposure. This creates a blind spot.
Clients often don’t understand which type of Medicare coverage they have. Even if you asked about Medicare and paid the conditional payment final demand, that doesn’t mean you’ve satisfied every lien. A client could have switched to a Medicare Advantage Plan without your knowledge. If that plan paid for accident-related care, they’re entitled to reimbursement and they can come after you for it.
No Notice, Big Consequences
You won’t be notified about a Part C lien through the standard Medicare conditional payment resolution process. Neither CMS nor BCRC will alert you. And you don’t have direct access to the data that shows which MAO your client might have been enrolled in.
That changed slightly with the PAID Act, which now requires CMS to share a client’s Medicare Advantage enrollment history, but only with Responsible Reporting Entities (RREs). Plaintiff lawyers don’t have access unless the defense is willing to cooperate.
Without this information, a Part C lien might surface months or years after the settlement is disbursed. At that point, it’s too late to pass the cost to anyone else. The MAO can file a private cause of action for double damages under the MSP.
How to Detect a Part C Lien Early
You can’t rely on clients to know or remember their coverage. You need process. By doing a bit of detective work, here is how you can protect against these hidden liens:
- Collect insurance cards at intake. Ask for every government and private insurance card, not just the red, white, and blue Medicare card.
- Verify coverage. Have the client log into their MyMedicare.gov account to check current and past coverage.
- Review the medical bills. Look for plan names or EOBs that indicate private Medicare Advantage billing.
- Partner with experts. Specialized lien resolution services can help identify and negotiate these liens.
Why Part C Liens Are Enforceable
MAOs have the same recovery rights as Medicare when it comes to conditional payments. They operate under the same MSP statute. But they also have a big stick: the ability to file a lawsuit for double the lien amount if they’re not paid. That’s not theoretical. MAOs and their subrogation vendors have already filed these types of suits. Certain jurisdictions have upheld their rights.
What To Do When You Find One
Once you identify a Part C lien, treat it like any other statutory lien.
- Demand documentation. Request itemized statements that tie the charges to accident-related care.
- Push for reductions. MAOs must apply procurement cost reductions and are generally open to negotiation.
- Evaluate compromise or waiver. If the lien would take an unfair portion of the settlement, explore options under the MSP compromise/waiver provisions.
Don’t Wait Until Disbursement
MAO lien exposure needs to be tracked throughout the life of a case. Intake is the first opportunity, but you should re-check coverage again before settlement and once more before disbursement. Treat it like a compliance checklist.
Failure to detect and resolve a Part C lien doesn’t just create client dissatisfaction, it creates real financial exposure for your firm.
Bottom Line
Part C liens are hidden, hard to find, and aggressively enforced. Your best protection is a process-driven approach to identifying MAO coverage as early as possible. Synergy has deep experience resolving these liens and minimizing client and firm exposure.
Don’t let a hidden lien cause you future heartache.
Written by: By Jason D. Lazarus, J.D., LL.M., MSCC | Founder & Chairman of Synergy | Founder of Special Needs Law Firm | Author of Amazon Best Sellers – Art of Settlement & Litigation to Life | Host of Trial Lawyer View by Synergy Podcast | Peak Practice by Synergy Curator
A core challenge for plaintiff attorneys handling third-party liability cases involving federal employees or retirees is navigating FEHBA (Federal Employees Health Benefits Act) reimbursement and subrogation rights. Unlike state statutory or common-law liens, FEHBA liens are grounded in a federal statutory framework and contract obligations imposed by the Office of Personnel Management (OPM). Understanding where these rights come from and how they operate is essential to protecting client recoveries.
When FEHBA was enacted in 1959, it established a nationwide health benefits program for federal employees and tasked OPM with negotiating contracts with private carriers. Although FEHBA itself does not explicitly articulate subrogation or reimbursement rights, OPM has long required those rights as a condition of coverage in carrier contracts. Over years of litigation, the courts have wrestled with how those contractual rights interact with state law and where such claims must be litigated.
The first major Supreme Court decision on this issue came in Empire HealthChoice Assurance, Inc. v. McVeigh (2006). In McVeigh, a FEHBA plan administrator sued in federal court to recover amounts it had paid for medical care after a beneficiary’s state-court tort recovery. The Supreme Court held that FEHBA’s preemption clause does not by itself create federal question jurisdiction, because FEHBA contains no express federal cause of action for reimbursement and does not automatically displace state contract law. As a result, plan reimbursement claims are generally governed by state contract principles and are typically litigated in state court unless another basis for federal jurisdiction exists.
In the years following McVeigh, lower courts developed competing views on whether state laws that restrict subrogation or reimbursement like anti-subrogation or made-whole doctrines applied to FEHBA plans. One notable example was Calingo v. Meridian Resource Co., where a federal district court initially held that FEHBA did not preempt a state anti-subrogation statute because the contract provisions did not “relate to coverage or benefits.” However, after OPM issued guidance clarifying that subrogation and reimbursement rights are integral to the nature, provision, and extent of federal benefits and do fall within FEHBA’s preemption clause, the court reversed course and upheld preemption.
The legal landscape solidified in Coventry Health Care of Missouri, Inc. v. Nevils (2017). In Nevils, a FEHBA carrier asserted a reimbursement lien after paying medical benefits; the insured satisfied the lien and then sued under state law that prohibited subrogation. The U.S. Supreme Court held unanimously that FEHBA’s express-preemption provision preempts state laws barring or limiting reimbursement when the plan’s contractual terms “relate to the nature, provision, or extent of coverage or benefits, including payments with respect to benefits.” This decision confirmed that FEHBA plans’ contractual reimbursement rights are enforceable nationwide and are not subject to state anti-subrogation or lien-reduction doctrines.
Today, FEHBA lien enforcement is relatively uniform: carriers have robust contractual reimbursement rights that federal law preempts state limitations, but those rights are still typically enforced through state-law contract or equitable claims unless an independent federal jurisdictional basis (such as diversity) exists.
What Nevils Means for Plaintiff Attorneys
This doctrinal history matters because it dictates how you approach reductions. Under FEHBA, you cannot rely on state made-whole rules, anti-subrogation statutes, or generalized fairness doctrines to nullify or reduce a carrier’s lien. Once coverage is established and there is a clear connection between the benefits paid and the injury at issue, federal preemption controls, and your traditional state-law offsets will often fail.
Many plaintiff lawyers approach FEHBA liens the same way they approach Medicaid liens or hospital liens, relying on state law doctrines, but FEHBA recovery provisions are fundamentally different.
Practical Ways Liens Can Be Reduced or Compromised
- Focus on the Contract Language.
Unlike Medicare, FEHBA does not provide a statutory fixed repayment formula. Each FEHBA carrier operates under an OPM-approved contract. It is imperative that you obtain the proper contract. Some contracts include provisions for attorney fee offsets or limits tied to amounts actually paid. Others assert broad priority rights against settlement proceeds. Your leverage depends entirely on what the contract says, not on what state law would prefer. - Audit the Lien Charges.
Many FEHBA carriers and their subrogation vendors still overreach. Charges unrelated to the injury, duplicate billings, or amounts covered by secondary plans do not belong in the demand. Obtaining and auditing the itemized paid-claims ledger remains one of the few realistic reduction tools and often uncovers legitimate disputes that support negotiation leverage. - Request a Formal Waiver or Hardship Reduction.
Some carriers, through internal subrogation or recovery manuals, allow discretionary reduction or compromise based on financial hardship or equity factors. These are not legal entitlements, they are negotiated concessions. A strong written compromise request, with documentation of limited settlement funds, attorney fees, future medical needs, and hardship, is often required, and carriers vary widely in flexibility. - Highlight Attorney Fees and Settlement Constraints.
Some carriers will in writing consider equitable factors such as attorney fees and case severity in a compromise, again, not because FEHBA requires it, but because the specific contract language allows it. Always secure any reduction or compromise in a written payoff agreement before settlement funds are disbursed.
Why FEHBA Experience Matters
FEHBA liens occupy a narrow but unforgiving corner of lien resolution. Congress chose uniform federal enforcement over state flexibility, and the Supreme Court enforced that choice. For plaintiff counsel, the takeaway is simple: FEHBA lien reduction is not easy, and state law arguments often fail. Success depends on early identification, contract-based analysis, and disciplined negotiation grounded in the federal scheme, not assumptions rooted in state law.
Handled correctly, FEHBA liens become manageable and predictable. Handled casually, they erode client recoveries and delay settlements. In this area of practice, experience and process translate directly into better outcomes for your clients.
Written by: Teresa Kenyon | Vice President of Lien Resolution at Synergy
Medicare conditional payment resolution poses substantial risk for trial lawyers and paralegals when timelines slip or deadlines get missed. The Centers for Medicare and Medicaid Services (CMS) publishes formal response standards, but real-world experience may not match those expectations. Knowing where CMS timelines tend to break down, and where your legal obligations are non-negotiable can protect you and the settlement proceeds.
This article focuses exclusively on Medicare Parts A and B, not Part C or D. It emphasizes the CMS resolution timelines and deadlines that matter most for law firms. These include the Final Conditional Payment Process (FCPP), interest accrual on Final Demands, appeal deadlines, and Department of Treasury referral exposure. It also addresses mandatory insurer reporting and International Classification of Diseases (ICD) coding issues that quietly drive delays as well as inflated Medicare Final Demands.
Under the Medicare Secondary Payer (MSP) Act, CMS holds expansive recovery rights and a direct cause of action against attorneys. Courts have confirmed personal liability exposure to primary plans or entities that receive settlement proceeds when Medicare interests remain unresolved. This specifically includes attorneys and their firms who receive or control settlement funds.
The risk does not come from a lack of published guidance. CMS has documented timelines for each stage of the process. The problem arises when firms rely on those timelines as reliable predictors instead of planning around how CMS operates in practice.
Medicare Activity from Intake Through Settlement
Medicare involvement begins long before settlement. Once a claim is reported to the Benefits Coordination Recovery Contractor (BCRC), CMS opens a recovery case and begins tracking Medicare payments. CMS states that an initial Conditional Payment Letter (CPL) should be issued within roughly 65 days of reporting. In practice, initial letters often arrive earlier. However, delays can occur if the beneficiary is now deceased, the person was never a Medicare beneficiary (and confirmation is needed), or if it classifies as a special project case.
CPLs serve a narrow purpose. They allow you to view the initial non-final claims included in the conditional payment amount. CMS process allows disputes of unrelated treatment an unlimited number of times before settlement is reported by way of audit of the CPL. It is very important to note that they do not cap Medicare’s recovery rights and they certainly do not prevent CMS from adding new (or even older) payments later. Treating these conditional payment amounts as final binding numbers remain one of the most common and costly mistakes in Medicare resolution.
Delays at this stage most often stem from reporting incorrect dates of loss, untimely failures under mandatory reporting rules, missing ICD diagnosis codes, or overly broad injury descriptions that pull unrelated care into the Medicare ledger.
The Final Conditional Payment Process (FCPP) and CMS Response Reality
For cases approaching settlement, CMS offers the FCPP. Within 120 days before the expected settlement date, you can submit a notice, through the Medicare portal, that the case will settle soon and request to initiate the final conditional payment process. During this 120-day period, you can submit one dispute per claim line for relatedness (arguing that a service isn’t related to the case). Medicare must resolve disputes within 11 business days. When you’re within exactly 3 business days of settlement, you request the final conditional payment amount on the portal. Medicare then locks in that amount. Your settlement must occur within 3 business days of the request, and you must report the settlement details within 30 days.
Without this process, Medicare’s Final Demand is issued after the settlement details are reported, which can lead to surprises or last-minute increases in the conditional payment amount. By locking in a final amount in advance, you know exactly what Medicare will require for repayment, which helps you plan settlement disbursements, avoids renegotiating the settlement terms post-demand, and reduces risk of misallocation or unexpected repayment amounts. Having a time-stamped, final payment summary allows you to structure settlements with full knowledge of Medicare’s position, reducing risk of delay or additional repayment obligations afterward.
Final Demand Letters and the 60 Day Payment Obligation
Once CMS issues a Final Demand letter, the most rigid timeline begins. Payment is due within 60 days of the demand date. Interest begins accruing on day 61 at a rate exceeding double digit annual percentages. CMS does not pause interest while an appeal is pending, regardless of reason, unless settlement funds have not been received and you can prove it with supporting documentation.
This reality drives strategy. Firms that intend to pursue an appeal, waiver, or compromise often pay the Final Demand first to stop interest from running. If CMS later grants relief, refunds issue back to the beneficiary or counsel – whoever paid CMS. Waiting to resolve disputes before paying Medicare often costs more in interest than the dispute saves. Instead, best practice is to dispute as many times as necessary prior to submitting settlement information. Then paying Medicare within 60 days of the Final Demand issuance to stop the interest meter from running while you continue your appeals.
Appeal Deadlines and Treasury Referral Exposure
Medicare appeals follow a multi-level administrative structure with strict deadlines. The first level appeal must be filed within 120 days of the Final Demand date, with subsequent deadlines tied to each decision issued along the way. These deadlines operate independently from payment obligations and must be calendared separately.
Paying a Final Demand does not waive appeal rights. Missing an appeal deadline does. If balances remain unresolved after collection notices, CMS refers the matter to the Department of Treasury, where offset actions and enforcement accelerate quickly. Firms should treat Treasury referral as a failure point to be avoided at all costs, not managed.
Mandatory Insurer Reporting and Problems that Arise
Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) added mandatory reporting requirements as a means of driving Medicare’s recovery workflow and ensuring compliance by Medicare beneficiaries as well as their attorneys. Insurers paying settlements must report claims involving Medicare beneficiaries. Generally, they must include the injury victim’s name, date of birth, Medicare Beneficiary Identifier (MBI), and Social Security Number (or the last five digits). Additionally, they must provide the date of loss, ICD-10 diagnosis codes for the illnesses/injuries alleged, claimed or released in the Total Payment Obligation to Claimant (TPOC) settlement, judgment, award, or other payment. The TPOC report must also include the date and amount of the settlement.
Issues arise when the Section 111 reporting does not match what was reported by the Medicare beneficiary or their attorney. For example, if different dates of loss, settlement dates, or settlement amounts are reported by involved parties, a new CMS file will likely be opened. Considering the significant role that ICD-10 codes play in the conditional recovery process, parties should be aligned in their selection of codes as well as the accident dates. One way to do this is by adding specific ICD-10 codes to the settlement terms, being careful not to use vague codes or an excessive number of codes. Aligning with the insurer on reporting data often shortens the time for a CMS response and reduces Final Demand amounts without formal appeals.
What Are Best Practices?
Firms that achieve consistently strong Medicare outcomes don’t sit back and wait for CMS’s default timelines to unfold. They report cases early and accurately, maintain ongoing audits of conditional payment activity, and proactively control the Medicare resolution process rather than letting it become reactive. Rather than triggering the Final Conditional Payment Process as a matter of course, they deploy it strategically when the case is truly within the appropriate settlement window to lock in a time-stamped final amount and limit surprises. They timely satisfy Final Demands when asserted and, just as importantly, pursue refunds or reductions through waiver, compromise or related dispute mechanisms when appropriate. They also ensure primary insurer reporting (including Section 111/Mandatory Insurer reporting) is accurate long before CMS compiles the Medicare payment ledger to avoid unnecessary conditional payment accruals and disputes.
Most importantly, they treat Medicare resolution as a core legal function integral to settlement strategy, not a back-end administrative task to be dealt with at the end. And they build their cases for resolution with that legal strategy in mind from the outset.
Why This Matters for Client Outcomes
Every unnecessary dollar paid to Medicare reduces the client’s net recovery, every delay undermines trust, and every missed deadline creates avoidable compliance risk. Because Medicare’s statutory timelines are firm even when CMS processing times are not. Planning around that reality protects your clients, your firm, and your reputation. Medicare’s conditional payment process requires early reporting and proactive management to avoid post-settlement surprises and escalating demand amounts.
Synergy partners with trial lawyers and paralegals nationwide to manage Medicare conditional payments, timing risk, and compliance with precision. When the rules stay fixed and CMS’s processes don’t adjust to litigation timetables, experience and proactive execution matter most.
Written by: Teresa Kenyon | Vice President of Lien Resolution at Synergy & Jasmine Patel | Medicare Lien Resolution Specialist at Synergy
If your client is on Medicare, Medicare compliance must be part of your resolution strategy. Failing to address the Medicare Secondary Payer Act (MSP) can trigger denials of future care, government recovery actions, or worse, personal liability for your law firm.
Here’s what you need to know, and what you should be doing about it.
Why the MSP Matters
Medicare is a secondary payer. That means it only pays for injury-related care if no other insurer is responsible. When a personal injury case settles and Medicare has already paid for related treatment, the government wants its money back. These are called conditional payments.
However, that isn’t the end of the matter. If a settlement includes compensation for future medical care, the Centers for Medicare & Medicaid Services (CMS) expects the injured party to use that money before billing Medicare. Failing to consider Medicare’s future interests can lead to Medicare denying coverage for future care.
Two Key Compliance Risks
- Conditional Payment Recovery
Medicare can recover what it paid before settlement. Errors in resolution can cause serious compliance risks for personal injury firms.
- Future Medicals and Set-Asides
Settlements that include future medicals may require considering Medicare’s future interests. One way to consider Medicare’s interests is with a Medicare Set-Aside (MSA)—a portion of funds set aside to pay for future Medicare-covered services. While not legally required in liability cases, CMS policy strongly encourages this. The risk? Medicare might deny care and your client could claim malpractice against your firm for failing to advise them.
How the Government Enforces the MSP
Trial lawyers are being held accountable related to mistakes in terms of MSP compliance. Recent Department of Justice actions include:
- A $250,000 settlement with a law firm that failed to repay conditional payments.
- A firm required to start a compliance program and assign a specific employee to handle MSP obligations.
- Cases where the DOJ pursued lawyers even when co-counsel failed to repay Medicare.
Making mistakes related to these obligations isn’t just risky for your client—it’s risky for your practice.
Best Practices for Trial Lawyers
- Screen Every Client
Identify Medicare beneficiaries or those reasonably expected to become eligible within 30 months. This includes clients on SSDI.
- Follow the CAD Protocol
- Consult with experts to address conditional payments and possible futures.
- Advise your client about Medicare’s rights and what might happen if they don’t protect them.
- Document the file, especially if the client declines to set aside funds.
- Control the MIR Narrative
Collaborate with defense counsel to ensure accurate ICD codes and dates of accident are properly reported. Incorrect data can trigger denial of care or new demands from Medicare.
- Reject Bad Release Language
Many defense-prepared releases include overreaching or outright inaccurate Medicare language. Avoid agreeing to anything not supported by law.
- Don’t Disburse Too Early
Always wait for Medicare’s final demand, not just a conditional payment letter, before disbursing funds.
Educate Clients and Protect Your Firm
Make sure your client understand Medicare’s rights to reimbursement. In addition, your client needs to understand the risk of doing nothing when it comes to futures. Document your advice.
Final Thought
Medicare compliance is not optional. Trial lawyers must take proactive steps to protect both their clients and their firms. You don’t need to be a compliance expert, but you should work with one.
Want to avoid costly mistakes and closes cases compliantly? Synergy is the nation’s leading MSP compliance partner for law firms. We can help you get it right, every time.
Written by: By Jason D. Lazarus, J.D., LL.M., MSCC | Founder & Chairman of Synergy | Founder of Special Needs Law Firm | Author of Amazon Best Sellers – Art of Settlement & Litigation to Life | Host of Trial Lawyer View by Synergy Podcast | Peak Practice by Synergy Curator
If your firm is settling personal injury cases, Medicare conditional payments and Medicare Advantage Plan (MAO) liens aren’t just red tape, they’re legal minefields. Overlooking them could cost your client and your firm big.
Here’s what you need to know and why it matters.
Medicare Conditional Payments: Serious Risk, Strict Rules
Under the Medicare Secondary Payer Act (MSPA), Medicare has a statutory right to recover payments it made for injury-related care when another party (like a liability insurer) is responsible. These are called conditional payments.
CMS doesn’t just have a lien, it has subrogation rights, a private cause of action, and the power to seek double damages. That means if you disburse funds before resolving Medicare’s claim, your firm could be sued.
The process is bureaucratic and slow. You must:
- Contact the Benefits Coordination and Recovery Contractor (BCRC) early
- Review and dispute the Conditional Payment Letter (CPL)
- Report the final settlement
- Wait for and pay the Final Demand within 60 days
Failing to do this properly can lead to interest, Treasury enforcement, or worse, a malpractice claim.
Medicare Advantage Plans: Same Rights, Different Rules
MAOs (Part C plans) are private companies paid by Medicare to provide benefits. Thanks to the Third Circuit’s ruling in In re Avandia, MAOs have the same recovery rights as traditional Medicare under the MSPA.
The kicker: MAOs often work through aggressive recovery contractors like Rawlings/Machinify or Optum/Katch. These entities move fast, push hard, and don’t care about fairness, they care about getting paid.
Trial lawyers need to:
- Identify whether a client is covered by an MAO
- Demand plan documents to confirm repayment rights
MAO liens are often inflated or misapplied. Without deep knowledge of their limits and defenses, you’re fighting blind.
Why It Matters
Ignoring or mishandling Medicare or MAO liens:
- Delays disbursement
- Exposes your firm to liability
- Reduces your client’s net recovery
- Damages your reputation
It’s not just about compliance. It’s about outcomes.
Best Practices
Here’s how experienced firms protect themselves:
- Start early. Identify Medicare and MAO liens pre-settlement.
- Audit everything. Challenge unrelated charges. Don’t rely on preliminary numbers.
- Pay smart. Consider compromise or waiver post-payment to reduce what’s owed.
- Know your defenses. Made whole, procurement cost offsets, and the requirement to follow Medicare protocols can all be leveraged.
- Outsource strategically. A lien resolution partner with Medicare expertise is not a luxury—it’s risk mitigation.
Why Partner with Experts Like Synergy
At Synergy, our lien resolution team understands the nuances of Medicare and MAO claims. We’ve handled thousands of cases and negotiated countless reductions. We know the playbook of recovery contractors, and we use that to protect your client’s recovery.
Let your team focus on trials. Let us handle the liens.
Written by: Teresa Kenyon Esq., Vice President of Lien Resolution Strategy at Synergy
In the world of personal injury litigation, where settlements can make or break a client’s future well-being, coordination of benefits is no longer a side issue, it’s central to protecting your client’s recovery. For veterans, military retirees, and their families, that complexity multiplies when Medicare, TRICARE, or VA benefits overlap. Once you add a client’s injury recovery to the mix, personal injury firms must be careful to avoid compliance pitfalls, reimbursement demands, and potential denial of care.
So how do these benefit systems interact and why does it matter for your client?
The Basics:
TRICARE, TRICARE for Life, and benefits under the Department of Veterans Affairs (VA) provide essential health care coverage to military service members, veterans, and their families, but they serve different populations and have distinct features. TRICARE primarily offers health care to active-duty service members and their dependents under the age of 65. It provides a range of services including medical, dental, and mental health care through various plans like TRICARE Prime and TRICARE Select. In contrast, TRICARE for Life is a premium-free health care program specifically for Medicare-eligible military retirees and their dependents, which acts as a secondary payer to Medicare and enhances benefits by covering additional services not fully addressed by Medicare. On the other hand, benefits under the VA focus on providing comprehensive health care to veterans with a variety of services, including specialized care for service-connected injuries and conditions. While TRICARE emphasizes readiness and access for currently active military personnel, TRICARE for Life reinforces support for older veterans with Medicare coverage, and VA benefits cater primarily to those who have discharged from military service. Each program is tailored to meet the unique needs of its respective beneficiaries, highlighting the complexities of health care available to those who have served in the U.S. Armed Forces.
Who Pays First?
Understanding the payer hierarchy is critical. Medicare, Tricare, and the VA all have distinct rules about who pays when:
- TRICARE acts as a secondary payer to Medicare. If your client has both, Medicare pays first, and TRICARE picks up what’s left, as long as the service is covered under TRICARE.
- VA benefits, however, are not health insurance. The VA provides care for service-connected conditions, often outside the coordination rules that apply to Medicare or TRICARE.
- Medicare is always the primary payer when used with TRICARE, unless the medical condition is service-connected, in which case the VA may take priority.
When a PI settlement enters the equation, things get trickier. Now Medicare’s rights under the Medicare Secondary Payer Act (MSP) come into play, potentially triggering obligations, even if other programs are involved.
Why This Matters in the Personal Injury Context
When a veteran or military retiree is injured and receives a settlement, failing to coordinate correctly between these programs can lead to:
- Duplicate payment recovery demands from Medicare, VA, or TRICARE
- Denial of future Medicare-covered care
- Compromised client recoveries
- Malpractice exposure to the trial attorney
Even more critical, Medicare may conditionally pay for treatment related to the injury, expecting reimbursement once the settlement is finalized. But if TRICARE also pays or the VA is involved, lawyers must untangle the web of who owes what and when.
Practical Example
Let’s say your client is a 68-year-old military retiree with TRICARE and Medicare. They were injured in a motor vehicle accident and treated at a civilian hospital. Medicare pays first; TRICARE covers the balance. The VA is uninvolved unless the injury is tied to military service.
When a settlement is reached, Medicare will seek reimbursement for conditional payments made for injury-related care. But here’s the catch: if TRICARE also paid, there may be a duplicate demand, or worse, a confusing mismatch in what each program believes is owed.
Without a coordinated lien resolution process, your client could be stuck repaying more than required or face future coverage denials.
What About VA?
If care was rendered at a VA facility for a service-connected condition, VA is usually primary, and Medicare/TRICARE may not be involved. But if the injury is not service-connected, Medicare steps in, and the VA may bill the client directly.
The VA also asserts its own lien rights under 38 U.S.C. § 1729, meaning it may demand reimbursement from the PI settlement. These claims are governed by different rules than Medicare and must be negotiated separately—something many lien resolution vendors miss.
Why This is Important to Trial Lawyers
Ignoring or making mistakes regarding these coordination rules can:
- Jeopardize the client’s future care
- Delay disbursement of settlement funds
- Invite government recovery actions
- Create financial exposure for your firm
Worse, failure to account for the VA, TRICARE, or Medicare’s role in paying for care can result in missed reimbursement demands or post-settlement denial of care, problems that could have been avoided with proper coordination.
How We Help
At Synergy, we’ve seen too many cases where failure to understand TRICARE, VA & Medicare benefit coordination has been costly and exposed firms to unnecessary risk. Our team handles the nuanced resolution of VA liens, TRICARE liens, and conditional Medicare payments to protect everyone involved. We believe trial lawyers and their teams should be focused on getting justice, not deciphering overlapping federal benefits. That’s where our expertise comes in.
Final Thought
If your client has any combination of Medicare, TRICARE, or VA benefits, don’t assume that standard Medicare coordination applies. Each program has its own rules, and they don’t always play nicely together. Engage an expert early. Know who paid what. And protect your client’s recovery by engaging experts before funds are disbursed.
Contact Synergy today. Our team of MSP compliance experts can resolve even the most complicated scenarios, so you don’t have to worry.
Written by: Rasa Fumagalli JD, MSCC, CMSP-F | Director of MSP Compliance at Synergy.
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