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.
For personal injury firms, lien resolution is one of the most time-consuming and risk-heavy aspects of personal injury practice. Every lien has the potential to cut into your client’s net recovery and expose your firm to liability if mistakes are made. The challenge? Not every lien is created equal. Some demand specialized expertise, while others are more efficiently handled in-house.
Knowing which liens to outsource, and which to resolve internally, is essential to protecting both your clients and your practice.
Liens That Should Be Outsourced
Certain liens are simply too complex, too time-intensive, or too risky for most law firms to manage effectively on their own. These include:
- Medicare Conditional Payments – Governed by strict timelines and regulatory processes, with penalties for missteps.
- Medicare Advantage (Part C) Liens – Often enforced by aggressive recovery contractors with deep resources who seek double damages if you fail to repay.
- Medicaid Liens – Highly state-specific, requiring expertise in varying third-party liability statutes.
- ERISA Plan Liens – Backed by federal preemption and difficult plan language, often favoring reimbursement.
- FEHBA & Military Plan Liens – Complex federal programs with unique recovery rights.
- Private Health Insurance & Hospital/Provider Liens – Frequently involve aggressive billing practices and balance billing disputes.
These liens are best handled by professionals who negotiate them daily. Outsourcing here means fewer errors, better results, and more time for your firm to focus on trial work.
Liens Best Kept In-House
Not every lien type justifies outsourcing. Some are more straightforward or are better managed locally:
- Small Liens ($2,000 or less) – Costs of outsourcing may outweigh potential savings.
- Local Provider Liens – Especially when your firm has established relationships with the provider.
- Workers’ Compensation Liens – Governed by state-specific statutes, often better handled locally.
- Medicaid Estate Recovery Liens – State-driven with unique procedural requirements.
- Child Support Liens – Typically statutory and straightforward in enforcement.
- Pre-Settlement Funding Liens – Governed by contract law, often requiring simple verification.
These liens are usually not complex enough to require outside expertise and can be resolved more cost-effectively by your team.
Why This Decision Matters
The decision to outsource isn’t just about convenience, it’s about strategy. Making a mistake with a Medicare or ERISA lien can expose a firm to government enforcement or malpractice claims. Overpaying a hospital lien can reduce your client’s recovery and erode trust. On the other hand, outsourcing small, straightforward liens can create inefficiencies and unnecessary costs.
Striking the right balance allows your firm to:
- Maximize client recovery by ensuring complex liens are aggressively negotiated.
- Reduce liability by leaving high-risk liens to experts.
- Improve efficiency by handling routine liens internally.
Final Thought
Not all liens are created equal and not all should be outsourced. The key is knowing where your firm’s expertise ends and where outside specialists can add value. By strategically deciding which liens to keep in-house and which to outsource, trial lawyers can protect client recoveries, reduce liability, and run a more efficient practice.
At Synergy, we know which battles are worth fighting and how to win them. For the liens that carry the most risk and complexity, our team brings unmatched expertise to the table.
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
Navigating ERISA liens can be a daunting task, given the complexity of the Employee Retirement Income Security Act (ERISA) and its impact on self-insured health plan reimbursement. Although a comprehensive exploration of ERISA is beyond this blog, understanding some key strategies can help in resolving ERISA liens effectively.
ERISA Overview
Enacted in 1974, ERISA aims to protect employee benefit plan participants by enforcing standards of conduct for plan managers and ensuring plan funds are secure. However, its application in lien resolutions often draws criticism, particularly concerning the practical protection it offers.
ERISA and Health Plans
ERISA governs most employer health plans, with notable exceptions including government and certain religious plans. ERISA health plans generally include subrogation clauses, requiring reimbursement for injury-related expenses paid by the plan. Section 502(a)(3) of ERISA allows these plans to seek equitable relief for enforcement, often through equitable liens or constructive trusts. The law’s intricacies, slightly clarified by the Supreme Court, reveal that the statute in its application is far from straightforward.
Key Supreme Court Rulings
- Sereboff v. Mid Atlantic Medical Services, Inc. (2006): The Supreme Court confirmed that ERISA plans could enforce reimbursement provisions under equitable principles, affirming the power of self-funded plans to claim recovery via equitable liens.
- U.S. Airways, Inc. v. McCutchen (2013): The Court reinforced that written ERISA plan terms take precedence over equitable doctrines like “make whole” and “common fund.”
Select Strategies for Lien Reduction
While there are many tactics you can use to possibly reduce an ERISA lien, here are a few key ones to consider:
- Determine Plan Funding Status: Identify whether the plan is self-funded or fully insured. Self-funded plans are governed by ERISA and are harder to reduce under Supreme Court precedent, while fully insured plans generally will be subject to state law or common law principles. Review the Summary Plan Description (SPD) and Master Plan to determine funding status.
- Utilize ERISA Section 1024(b)(4): Request plan documents directly from the plan administrator, not from third-party administrators or recovery contractors. This legal right via the document request helps assess the strength of the plan’s claim and identify potential leverage points, such as challenging the applicability of equitable principles.
- Examine Plan Language: Look for ambiguities or specific provisions in the plan’s reimbursement clauses. Ambiguities can be used as leverage to reduce the amount owed to the lien holder.
- Leverage Equitable Doctrines: If the plan language does not explicitly reject doctrines like “make whole” or “common fund,” use these principles to argue for lien reduction. Make arguments based on partial reimbursement or proportional sharing of legal costs.
- Address Equitable Defenses: Use defenses like unjust enrichment or undue hardship to argue against full reimbursement, where applicable.
Conclusion
Effectively addressing ERISA liens requires a deep understanding of the plan’s funding status, precise examination of plan documents, and strategic application of legal and equitable arguments. The US Supreme Court’s ruling in McCutchen emphasized the importance of plan language, making it crucial to use Section 1024(b)(4) requests to your advantage. By leveraging these strategies, you can begin to navigate ERISA liens more effectively and potentially achieve optimal reductions in a claimed ERISA lien.
Working with specialized lien resolution companies can provide essential expertise and prevent costly mistakes when it comes to ERISA liens. If you want to find out more, contact us today to Partner with Synergy for lien resolution.
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
Personal injury law firms live in the courtroom. Their core focus is proving causation, liability, and damages not negotiating with Medicare, ERISA plans, or hospital billing departments. Yet, as every law firm knows, cases don’t truly end at settlement. They end when liens are resolved, and final disbursement is made.
And here lies the dilemma: lien resolution is time-consuming, highly technical, and fraught with risk. Increasingly, law firms turn to outsourcing as a solution. But the question many lawyers ask is, is it ethical to outsource lien resolution?
The answer is yes, when done correctly.
Ethics Matter in Outsourcing
Outsourcing lien resolution isn’t just a business decision. It’s a professional responsibility decision. Mishandling liens can expose clients to ongoing claims, delay disbursement, or even trigger penalties such as Medicare’s double damages provision. Worse, it can expose the attorney to malpractice risk.
The ABA and state bar associations recognize that outsourcing is both permissible and often beneficial, so long as lawyers follow specific ethical safeguards.
ABA Guidance on Outsourcing
ABA Formal Ethics Opinion 08-451 provides clear direction: lawyers may outsource legal and non-legal support services, but they retain ultimate responsibility. That means:
- Supervision: Attorneys must oversee outsourced lien resolution work and ensure it meets professional standards.
- Confidentiality: Client information must remain protected, just as if it were handled in-house.
- Reasonableness of Fees: Costs must be transparent, reasonable, and disclosed to the client.
In short, outsourcing requires active oversight to ensure compliance with ethical obligations.
State-Specific Ethical Rules
Many states echo the ABA’s position, often adding their own guidance:
- New York allows outsourcing as long as fees are disclosed and result in a net client benefit.
- Ohio and Utah emphasize obtaining informed client consent and ensuring costs are both reasonable and transparent.
This growing consensus makes it clear: outsourcing is not only permissible but also practical, provided ethical safeguards are followed.
Ethical Outsourcing Benefits Clients
At its core, outsourcing lien resolution ethically is about client protection. Done properly, it:
- Maximizes Client Recovery by ensuring liens are challenged, audited, and negotiated effectively.
- Reduces Risk by avoiding errors that could trigger legal or financial exposure for both client and attorney.
- Enhances Trust by giving clients confidence that every dollar possible is preserved in their recovery.
Final Thought
Trial lawyers shouldn’t hesitate to bring in lien resolution experts, so long as they do so ethically. By supervising outsourced work, securing client consent, and partnering with trusted providers, firms can meet their professional obligations while achieving better results for their clients.
At Synergy, ethical lien resolution is at the heart of what we do. We partner with trial lawyers nationwide to reduce risk, improve client outcomes, and protect the integrity of every settlement we are involved in.
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
In our previous blog, we tackled the Medicare conditional payment resolution process. However, if your client, during treatment for their injuries, switched to a Medicare Advantage Plan (MAO-Part C), the resolution process might not be over. Here’s why: While you may have resolved conditional payments with Medicare Parts A and B (traditional Medicare), MAO plans operate independently and may have covered some or all of your client’s medical expenses.
The issue arises because MAO plans are distinct from traditional Medicare, and beneficiaries can enroll in them during specific periods. Consequently, even if you resolved Medicare conditional payments, an MAO might have stepped in later, without your knowledge. CMS will not notify you about these MAO payments, and beneficiaries often lack clarity on their coverage types so it can easily be missed.
To verify MAO plan coverage, clients can check their status on MyMedicare.gov. Additionally, the 2020 PAID Act requires CMS to report MAO enrollments for the past three years, though access to this data is limited to Non-Group Health Plan Responsible Reporting Entities (RREs). You might need to request this information from the defense or painstakingly review medical bills to uncover potential MAO liens.
Attorneys must be vigilant, conducting thorough due diligence to uncover possible MAO liens. Failure to address these could result in double damages, as MAOs do enforce their reimbursement rights aggressively. The Medicare Secondary Payer Act grants MAOs the right to sue for double the lien amount if not repaid, a risk highlighted by cases like Humana v. Western Heritage Ins. Co. Here, Humana successfully claimed double damages after Western Heritage failed to reimburse a $191,000 lien.
To prevent such pitfalls, start your investigation early upon client intake, continue throughout representation, and finalize it before disbursing settlement funds. Identify any MAO liens and seek reduction or compromise as appropriate. Understanding and managing MAO liens is crucial to safeguarding your firm against significant financial exposure for this hidden lien.
Working with specialized lien resolution companies can provide essential expertise and prevent costly mistakes when it comes to Medicare Advantage plan liens. If you want to find out more, contact us today to Partner with Synergy for lien resolution.
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
Personal injury firms excel at what they were built to do: securing justice by proving liability, telling their client’s story, and getting the best possible settlement or verdict. Yet once the dust settles, another challenge arises, resolving liens.
Here’s the hard truth: lien resolution, while critical, is not a law firm’s core competency. And that reality carries real costs for firms that try to manage it in-house.
The Problem with Keeping Lien Resolution In-House
Handling liens requires a completely different skill set than litigating cases. Instead of cross-examining witnesses or preparing exhibits, lawyers and staff must wade through:
- Complex regulations governing Medicare, Medicaid, ERISA, FEHBA, and private health plans.
- Deal with aggressive recovery contractors like Rawlings, Equian, Optum, and Conduent—organizations whose sole job is to extract repayment from settlements.
- Time-consuming negotiations and audits to dispute unrelated charges and reduce repayment obligations.
This is not advocacy in the courtroom. It is administrative, regulatory, and negotiation-heavy work. And every hour spent on it is an hour taken away from moving existing or new cases toward resolution.
The Cost
When law firms try to resolve liens internally, they often pay the price in three ways:
- Lost Time – Staff and attorneys bogged down in lien disputes can’t focus on case strategy or trial preparation.
- Financial Risk – Missteps with Medicare or Medicaid can result in penalties, interest, or even double damages against the firm.
- Diminished Client Outcomes – Overpaying liens or failing to challenge invalid claims directly reduces a client’s net recovery and client satisfaction.
In short, doing lien resolution in-house diverts resources from your true strength: client advocacy and the pursuit of justice for those who are injured.
Why Outsourcing Is a Strategic Advantage
Outsourcing lien resolution isn’t about passing off busywork. It’s about recognizing that lien resolution is a specialized discipline requiring expertise, focus, and leverage.
- Deep Expertise: Lien resolution professionals live and breathe this work. They know the nuances of ERISA reimbursement provisions, Medicare conditional payments, and Medicaid state-specific rules.
- Leveling the Playing Field: Recovery vendors are massive corporations with teams dedicated to enforcing liens. Outsourcing ensures your client has equally sophisticated representation on their side.
- Better Financial Outcomes: Specialists know how to audit, negotiate, and challenge overreaching claims, often securing significant reductions for injury victims.
- Efficiency: By removing lien resolution from your team’s workload, you free up resources to focus on litigation and client service—the heart of your practice.
The Ethical Considerations
It’s not just about efficiency. ABA Model Rule 1.15 makes it clear: lawyers must protect third-party claims on settlement funds. That means missing a lien or paying one improperly isn’t just risky; it could be an ethical violation. Outsourcing to experts helps ensure compliance while safeguarding your firm’s reputation.
Conclusion
Trial lawyers already outsource to other experts in certain areas of their practices. Lien resolution is similar since it is not your firm’s core competency and treating it as such can be costly. By outsourcing to trusted experts, you not only protect your clients’ recoveries but also protect your practice from liability, inefficiency, and reputational harm.
At Synergy, lien resolution is what we do, day in and day out. Let us handle the complexity so you can get back to doing what you do best: winning cases and serving your clients.
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
Correctly navigating Medicare’s conditional payment resolution process is critical for personal injury attorneys, given the complex legal framework and the substantial risks involved in failure to reimburse. Under the Medicare Secondary Payer Act (MSPA), the Centers for Medicare & Medicaid Services (CMS) have broad powers to recover payments made on behalf of Medicare beneficiaries, including the right to sue trial attorneys directly. Failing to address Medicare’s reimbursement claims correctly can lead to severe financial and legal consequences for personal injury law firms.
MSPA: The Legal Framework
CMS can recover conditional payments from any entity that touches settlement dollars which are meant to reimburse medical expenses, including attorneys who handle personal injury settlements. The case of U.S. v. Harris starkly illustrates the potential pitfalls. In this case, a personal injury attorney was held liable for Medicare’s conditional payments despite settling a claim and notifying Medicare. The court ruled against the attorney, emphasizing that CMS’s rights under 42 U.S.C. § 1395y(b)(2) extend to recovering from entities that have received payments from primary plans, a personal injury law attorney.
A Labyrinth: The Medicare Resolution Process
Resolving Medicare’s conditional payments involves several steps:
- Initial Reporting: Contact the Benefits Coordination & Recovery Contractor (BCRC) before settlement to obtain a Conditional Payment Letter (CPL). This letter is preliminary and should be audited to remove unrelated care.
- Final Demand: After settlement, Medicare must be informed, and a Final Demand will then be issued. Payment must be made within 60 days to avoid interest accumulation and potential enforcement actions by the DOJ.
Mistakes to Avoid: Common Pitfalls
There are some common mistakes made by personal injury law firms when it comes to conditional payments. These mistakes can be costly, and it is best to avoid them:
- Relying on Conditional Payment Letters: Conditional Payment Letters are not final. Only a Final Demand Letter from Medicare confirms the amount due and is binding. Relying on preliminary figures can lead to significant shortfalls and legal issues, as evidenced by a 2019 case where a Maryland law firm settled a claim which was based upon reliance on incorrect figures in a Conditional Payment Letter.
- Improper Resolution Channels: Using incorrect methods to resolve conditional payments, such as state court proceedings instead of the required administrative processes, can result in severe repercussions, as seen in a Texas case where a state court ruling was sought to reduce what was owed to Medicare which wasn’t effective. Instead, the trial attorney was sued by the government for failure to properly reimburse Medicare.
Reducing What is Owed: Appeals, Compromises, and Waivers
When dealing with Medicare’s repayment formula, attorneys face a rigid calculation per the applicable regulation. The calculated repayment amount often doesn’t account for case-specific details impacting the recovery such as liability issues or policy limits. To address this fact, attorneys can:
- Appeal: Navigate through Medicare’s multi-level internal appeal process, which is lengthy, and interest accrues during the appeal.
- Request Compromise/Waiver: After paying the Final Demand, attorneys can request a compromise or waiver, potentially leading to a refund. Requests can be made under:
- Section 1870(c): Financial hardship waiver.
- Section 1862(b): Best interest of the program waiver.
- Federal Claims Collection Act: General compromise request.
Conclusion
Effective resolution of Medicare conditional payments requires diligence and adherence to proper processes prescribed by Medicare. Attorneys should avoid relying on preliminary figures, ensure timely and accurate reporting, and use appropriate channels for appeals or compromise/waiver requests. Understanding and navigating Medicare’s complex requirements is crucial to safeguarding against personal liability and ensuring successful settlement outcomes.
Working with specialized lien resolution companies can provide essential expertise and prevent costly mistakes when it comes to Medicare conditional payments. If you want to find out more, contact us today to Partner with Synergy for lien resolution.
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
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