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
