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.
Introduction
Effective lien resolution is pivotal in personal injury cases. Liens—claims from healthcare providers, insurers, or government agencies against a plaintiff’s settlement—can significantly impact the net recovery. Understanding and managing these liens is crucial for maximizing the client’s recovery and ensuring compliance with legal requirements.
What is a Lien?
In personal injury cases, a lien represents a claim by an entity seeking reimbursement for medical expenses or benefits provided to the injured party. These claims must be addressed to avoid compromising the client’s net settlement.
Overview of Various Lien Types
Medicare Liens Conditional Payments: Medicare’s conditional payments for medical expenses necessitate reimbursement from settlement proceeds under the Medicare Secondary Payer Act. The resolution process is managed by the Medicare Secondary Payer Recovery Contractor (MSPRC), which involves reporting the settlement to the MSPRC and resolving the reimbursement obligation with them through their normal process.
Medicare Advantage (Part C) Liens: Medicare Advantage plans, administered by private insurers, can assert liens for covered medical expenses. To resolve, you negotiate directly with the private insurer or their recovery contractor. The process is governed by the same laws as traditional Medicare but involves private insurance entities.
Medicaid Liens: Medicaid liens are asserted by state programs for medical expenses paid on the plaintiff’s behalf, with each state having distinct laws. To resolve, you contact the state Medicaid agency to determine the lien amount, negotiate reductions, and comply with state-specific procedures.
ERISA Liens: ERISA liens arise from employer-sponsored plans, often with strong subrogation rights if self-funded. In resolving these liens, first understand the ERISA plan terms, then engage with the plan administrator, and negotiate reductions under federal law (if self-funded), which can be complex. If the plan isn’t self-funded, then state law will apply.
FEHBA/Military Liens: FEHBA and military plans like TRICARE may assert liens for medical expenses. To resolve, contact the relevant federal agency or military plan administrator to understand lien rights and negotiate reductions where feasible.
Private Health Insurance Liens: Private insurers may assert subrogation claims based on their policy’s provisions. To resolve, first review the insurance policy, then negotiate directly with the insurer, and argue for reductions based on equitable principles or other legal related arguments for reduction based upon state law.
Hospital and Provider Liens: Hospitals and providers may assert direct liens for unpaid medical bills. To resolve, negotiate with providers, leveraging financial hardship or equitable distribution arguments, and the reasonable cost of care.
Conclusion
Navigating the complexities of various liens requires a thorough understanding of their unique characteristics and resolution processes. From Medicare to ERISA and military liens, each type demands specific strategies for effective resolution. Understanding these nuances ensures that personal injury lawyers can protect their clients’ interests and secure the highest possible net recovery.
If you want to do further reading on the subject, our white paper is a detailed guide to the different lien types and all of their nuances. You can download “Advanced Lien Resolution Techniques – Medicare, Medicare Advantage, Medicaid, ERISA, FEHBA, Military Liens and Hospital Liens” by clicking HERE. If however you are ready to partner with Synergy and outsource lien resolution today, contact us NOW.
Written by: Jason D. Lazarus, J.D., LL.M., MSCC | CEO
Resolving healthcare liens is essential to ensuring that personal injury clients receive their maximum net recovery. A structured approach to negotiating and resolving these liens helps protect clients’ interests and comply with legal requirements. Here’s a streamlined guide to managing healthcare liens effectively:
Pre-Negotiation Preparation
Start with a case analysis. Evaluate the total settlement and the client’s recovery to understand the impact of each lien. Assess the legal enforceability and negotiability of liens. Inform the client about the liens and their potential effects on the settlement. Discuss negotiation strategies and secure approval for lien reductions.
Engagement with Lienholders
The first step in resolution, is to contact lienholders directly via phone, letter, or meetings. Clearly present your case for lien reductions and provide supporting documentation.
Negotiation Strategies
Once you have made contact and started the negotiation process, use legal arguments to negotiate lien reductions. This may involve challenging the lien’s validity, arguing for equity-based reductions, or applying state-specific reduction statutes. A couple of key arguments are:
- Financial Hardship: For government liens (e.g., Medicare, Medicaid), you can present evidence of financial hardship to negotiate reductions based on certain statutory provisions.
- Equitable Distribution: Advocate for proportional reductions based on the client’s net recovery and not being made whole to ensure a fair share of the settlement proceeds remains with the client.
Documentation and Compliance
As part of your resolution process, you should document all agreements in writing, detailing reduced amounts and payment terms. Obtain confirmation from lienholders that their claims are satisfied. Ensure adherence to legal and regulatory requirements throughout the negotiation process. Maintain accurate records of all activities.
Payment and Finalization
Once agreement has been reached with the appropriate lien holder, facilitate payment of the negotiated lien amounts from the settlement proceeds. Obtain lien waivers or releases from health insurers to confirm that the lien is fully satisfied and no further claims will be made.
File Closure
As your last step in the resolution process, you need to have a closure process. First, verify that all resolution requirements are met in the final stage. Keep all relevant documents for future reference and potential audits. Update records to reflect the final lien resolution outcome and ensure accurate final distribution in the closing statement. Notify the client of the lien resolution outcome and provide a final closing statement detailing the distribution of funds.
Conclusion
Implementing these steps ensures an effective management for negotiating and resolving healthcare liens. The end result maximizes the client’s net recovery and results in compliance with legal requirements. While outsourcing can be beneficial, mastering the in-house lien resolution process for liens that aren’t outsourced is crucial.
To read more on the topic of negotiating and resolving healthcare liens, click HERE to download our white paper titled “Negotiating and Resolving Healthcare Liens – Best Practices for Personal Injury Law Firms”. If you are ready to outsource, partner with Synergy today by CONTACT us now.
Navigating hospital and provider liens in personal injury cases can be a labyrinthine process. These liens trigger ethical considerations, generally involve inflated charges, and have intricate state-specific regulations to navigate. For personal injury attorneys, understanding these liens and devising effective strategies to manage them is crucial.
The Challenge with Hospital Liens
Hospital bills often include charges that greatly exceed actual costs. Many hospitals leverage lien rights, often supported by statutes, to attempt to secure payment for these excessive charges. Negotiating from full billed charges is a strategic mistake; these figures are often inflated and not reflective of the true cost of care. Instead, the focus should be on negotiating from a reasonable value standpoint.
Is the claim a lien or debt?
The first step in resolving hospital/provider claims is understanding whether you’re dealing with a lien or a debt. A lien is a legal claim on settlement proceeds, generally established by statute or contractual agreement. Conversely, a debt arises from unpaid medical care. When you are dealing with a debt, the question for the personal injury victim as a starting point is whether they want to resolve the debt from their settlement proceeds. In most instances it does make sense to encourage resolution so as to avoid having debt collection pursued in the future.
In contrast, liens are a legal claim against the personal injury recovery, borne out of statutes and ordinances. For example, while California has consumer-friendly lien laws, Florida’s regulations vary by county. Familiarizing yourself with state-specific lien statutes and common law is essential for effective resolution for a valid lien.
Best Practices for Resolution
- Identify and verify the existence of any hospital lien claims versus just a debt.
- Once identified, check to see if the hospital has properly “perfected” the lien under appropriate state law. Also, determine under your state law the legal limitations on a hospital’s right to reimbursement.
- Confirm whether the hospital has already received any payments from insurance and whether there is a balance.
- Dispute any attempts to balance bill if payments were received from insurance.
- Engage in negotiations using the following as a guide to different available arguments (Note: Not all will apply, assess your case and use appropriate arguments):
- Challenge any unrelated charges in the hospital billing.
- Use reasonableness arguments for the charges.
- Make any arguments available under state statutes for limitations on reimbursement.
- Argue equitable doctrines like common fund or made whole, if available under state law. Raise arguments related to client hardship, limited insurance policy limits, and comparative fault to negotiate further reductions in the lien.
- Use pro rata share types of arguments in cases with multiple lienholders, argue for a pro rata distribution of a set amount of the settlement pool of funds.
- Finalize resolution by obtaining a complete release of the lien from the hospital.
Conclusion
Resolving hospital/provider claims is indeed a complex task, but with a strategic approach, attorneys can effectively manage these claims. By focusing on reasonable charges, understanding local lien laws, and employing robust negotiation strategies, you can mitigate the impact of hospital/provider claims and ensure that your client’s net recovery is protected.
Working with specialized lien resolution companies can provide essential expertise and prevent costly mistakes when it comes to hospital & provider claims. If you want to find out more, contact us today to Partner with Synergy for lien resolution.
Written by: Jason D. Lazarus, J.D., LL.M., MSCC | CEO
When settling cases involving clients with federal or military healthcare coverage, understanding the complex landscape of lien recovery rights is crucial. This blog highlights key issues and strategies related to federal employee and military healthcare liens.
FEHBA Liens
The Federal Employees Health Benefits Act (FEHBA) covers federal employees, retirees, and their families through specialized health plans administered by private carriers under the Office of Personnel Management (OPM). FEHBA’s preemption of state laws is pivotal; as affirmed by the Supreme Court in Coventry Health Care of Missouri Inc. v. Nevils, FEHBA preempts state laws that might limit these plans’ subrogation rights. This ruling solidified that FEHBA plans can demand full reimbursement from settlements, similar to ERISA plans, although FEHBA plans typically contain more lenient recovery provisions.
To address FEHBA liens, start by reviewing the plan’s language. While FEHBA liens are strong, potential reductions are still possible, given that the plan’s recovery provisions may provide needed negotiating leverage.
Military Liens
Military healthcare programs—such as Veterans Health Administration (VHA), Champ VA, and Tricare—each have distinct reimbursement rights governed primarily by the Federal Medical Care Recovery Act (FMCRA). Unlike other types of liens, these programs do not involve traditional liens but rather direct claims against responsible third parties.
Veterans Health Administration: Recovery rights stem from 38 U.S.C. § 1729 and FMCRA. The VA can pursue reimbursement claims connected to third-party settlements. For the VA, the resolution process involves requesting bills and navigating a tiered review system for compromise or waiver requests.
Tricare: Governed by similar provisions, Tricare’s recovery rights are outlined in 32 C.F.R. §199.12. Tricare does not require set-asides but considers future medical expenses, and recovery claims are managed through the JAG office. Challenges with Tricare include managing attorney fees and determining the military’s right to recover from first-party auto insurance policies.
Key Issues:
- Attorney Fees: Tricare’s form protection agreement often prohibits the government from paying attorney fees, creating complications in settlement negotiations.
- First-Party Auto Insurance: The right to recover from uninsured motorist (UM) coverage is debated and often hinges on specific policy language, as demonstrated in Government Employees Ins. Co. v. Andujar.
Conclusion
FEHBA and military healthcare liens present distinct challenges. FEHBA’s federal preemption necessitates focus on plan-specific language to negotiate reductions, while military liens involve navigating direct claims under FMCRA and managing complex issues like attorney fees and UM insurance recovery.
Working with specialized lien resolution companies can provide essential expertise and prevent costly mistakes when it comes to FEHBA & military liens. If you want to find out more, contact us today to Partner with Synergy for lien resolution.
Written by: Jason D. Lazarus, J.D., LL.M., MSCC | CEO
Lien resolution in personal injury cases is complex, and handling it in-house poses significant challenges. To explore the why, it is important to consider key common questions:
What are my legal obligations as plaintiff’s counsel and am I personally liable?
Attorneys must ensure all liens are properly identified and resolved, which involves adhering to ethical rules and potential personal liability for unresolved liens.
Is there a lien? Reimbursement obligation? Just a debt?
Determining whether a claim is a lien, a reimbursement obligation, or just a debt requires meticulous investigation and analysis. This process is time-consuming and requires attention to detail to ensure all obligations are accurately identified.
Is the reimbursement obligation owed limited to past payments or does it also include future payments?
Understanding whether reimbursement includes only past payments or also future ones adds complexity, requiring careful interpretation of plan terms.
Are there any state-specific laws peculiar to the jurisdiction that impact lien resolution for the client?
State-specific laws affect lien enforceability and resolution, necessitating up-to-date knowledge of varied regulations across jurisdictions.
For non-government benefit plans, what law applies? State or federal? Is it governed by ERISA, FEHBA, FMCRA, or state law? Combination of laws?
Navigating whether state or federal laws (e.g., ERISA, FEHBA) govern non-government benefit plans can be challenging, especially in multi-state cases.
Who is the plan administrator and recovery vendor for non-government plans?
Attorneys must identify the proper contractor then establish communication with these entities, understand their lien recovery processes, and negotiate accordingly.
Can the plan or vendor actually prove it is the type of plan it claims to be? And its recovery rights under the law?
Scrutinizing the legitimacy of plans and their claimed recovery rights requires thorough legal research and sometimes challenging lien holders’ claims.
When looking at the client’s net recovery, are they made whole and is reimbursement to the lien holder proper?
Ensuring that clients are made whole while balancing the required reimbursement to lien holders is a delicate task. Attorneys must navigate the complexities of lien negotiations to maximize the client’s net recovery.
What standard reductions or other reductions are available under state or federal statutes for the applicable lien?
Applying standard reductions and exploring other reduction options requires detailed knowledge of relevant statutes and legal defenses.
Conclusion
The intricate nature of lien resolution often makes it challenging for law firms to handle alone. Attorneys must navigate a labyrinth of legal obligations, complex negotiations, and meticulous documentation to protect their clients’ interests. This is why outsourcing makes sense for most types of healthcare liens.
For a deeper dive on this subject, download our white paper titled “The Daunting Task of Resolving Liens for Personal Injury Law Firms” by clicking HERE. To get started with outsourcing lien resolution by partnering with Synergy contact us TODAY.
Medicaid liens often arise in personal injury cases where the injured party is indigent, and the program has covered the client’s medical expenses. Under federal law, Medicaid programs must recover these expenses from third-party settlements. However, the process is governed by both federal and state laws which are nuanced but protect the Medicaid beneficiary’s rights while allowing Medicaid to recover a portion of its costs.
Medicaid’s Right to Recover
Every state must have laws allowing Medicaid to recover funds for injury-related medical care from settlements or judgments. Federal law mandates that Medicaid recipients assign their right to recover these expenses to the state.
Limitations on Medicaid Recovery
Federal law mandates that states participating in Medicaid must enact third-party liability laws, ensuring that states can recover medical expenses from liable third parties. However, this recovery is limited by the anti-lien provisions of federal law, which places limits on the state’s ability to impose liens on any property of a Medicaid recipient. While the third-party liability provisions required by federal Medicaid law is an exception to the anti-lien provisions, there is a tension between these laws which has led to some key United States Supreme Court decisions related to Medicaid liens.
Key US Supreme Court Medicaid Decisions
- Ahlborn v. Arkansas DHS (2006): In Ahlborn, the Court ruled that Medicaid agencies cannot recover from portions of a settlement designated for non-medical damages, such as pain and suffering or lost wages. This ruling was hailed as a major victory for injury victims, significantly reducing the financial burden of Medicaid liens due to the pro-rata approach the court seemingly sanctioned.
- Wos v. EMA (2013): Reaffirmed Ahlborn in holding that Medicaid can only recover from funds designated for medical expenses, striking down arbitrary state recovery statutes.
- Gallardo v. Marstiller (2022): Expanded Medicaid’s right to recover from both past and future medical expenses in settlements, complicating lien resolution further.
Conclusion
In conclusion, understanding Medicaid’s recovery rights—and the protections offered by cases like Ahlborn and Wos—is crucial for securing fair outcomes for injury victims. Also, the now somewhat changed landscape due to Gallardo is an important consideration. Understanding the limits of Medicaid’s recovery rights, while ensuring compliance with state laws, is essential for maximizing your client’s net recovery. By navigating these complexities and applying pro-rata reductions based on Ahlborn and Wos, you can reduce Medicaid liens and maximize the client’s net settlement.
Working with specialized lien resolution companies can provide essential expertise and prevent costly mistakes when it comes to Medicaid liens. If you want to find out more, contact us today to Partner with Synergy for lien resolution.
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