HOSPITAL LIENS
Welcome to our hospital liens blog page! Our Synergy experts have extensive experience and InSights in managing hospital liens and navigating the complex world of healthcare reimbursement. Our blogs cover a wide range of topics related to hospital liens, including the basics of hospital liens, how to negotiate hospital liens, government benefit preservation, and more. We understand the financial burdens that can arise from hospital liens and the challenges that families and individuals face when dealing with them. Our goal is to provide you with the information and resources you need to navigate the process with confidence and achieve the best possible outcomes. We’re passionate about helping our clients protect their hard-fought recoveries and secure their financial futures, and we’re excited to share our expertise with you. Check back often for new blog posts and updates!
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
When a hard-fought personal injury case is resolved, trial lawyers and their clients often breathe a sigh of relief. The hard work is over or so it seems. But lurking beneath the surface of every settlement is a potential minefield: unresolved healthcare liens. This “post-resolution lien chaos” can negatively impact even the most favorable outcomes, leading to financial, ethical, and professional consequences that causes an impact long after the case is closed.
What Is Post-Resolution Lien Chaos?
Post-resolution lien chaos occurs when liens—Medicare, Medicaid, ERISA, FEHBA, military, hospital, or private health plans—are not properly identified, negotiated, and resolved. At first, it may look like a small administrative issue. In reality, it can mushroom into:
- Delayed client disbursements that frustrate injury victims.
- Unexpected repayment demands from aggressive recovery contractors or government agencies.
- Double damages and lawsuits, especially in cases involving Medicare conditional payments or Part C plan liens.
- Reputational harm to the lawyer, whose client expected finality, not protracted disputes with lien holders.
In other words, unresolved liens don’t just threaten client recoveries—they threaten your practice.
Why This Matters More Than Ever
Healthcare reimbursement systems grow more complex each year. As the RAND Institute found, liens are increasingly common and burdensome, particularly in mass tort litigation and Medicare cases. CMS, Medicaid agencies, ERISA plans, and hospital providers are all more aggressive than ever in enforcing reimbursement rights.
The consequences of ignoring or mishandling liens can be severe:
- Financial Exposure: Improper handling of Medicare conditional payments or Part C plan liens can result in personal liability and double damages.
- Ethical Duties: ABA Model Rule 1.15 makes it clear—lawyers must safeguard third-party claims and cannot simply release disputed funds.
- Client Harm: Every dollar paid unnecessarily to a lien holder reduces your client’s net recovery, undermining the very purpose of the litigation.
The True Cost to Trial Lawyers
Many firms underestimate the drain lien resolution creates. Hours spent negotiating with recovery vendors, auditing medical charges, or disputing Medicare demands often eat into a firm’s bottom line. Worse, if something is missed, post-resolution disputes can pull the lawyer back into a case they thought was finished—sometimes years later.
The reality? A mistake made with liens does not just cost a client money; it costs law firms efficiency, profitability, and peace of mind.
Preventing Post-Resolution Chaos
Avoiding lien chaos is about expertise and timing. Best practices include:
- Early Identification: Begin lien investigation as soon as the case is opened, not after settlement discussions start.
- Accurate Validation: Confirm the legal validity of every asserted lien; not every claim is enforceable.
- Strategic Negotiation: Leverage knowledge of ERISA, Medicaid, Medicare, and state-specific lien law to minimize repayment demands.
- Consider Outsourcing: For many firms, partnering with a lien resolution expert eliminates liability, reduces internal costs, and ensures clients receive the maximum net recovery.
Final Thought
Resolution should bring closure, not new battles. Law firms who treat lien resolution as an afterthought risk exposing both themselves and their clients to costly, time-consuming chaos. On the other hand, those who prioritize lien resolution as a core part of case strategy safeguard client recoveries, uphold their ethical obligations, and protect their own practice from unnecessary risk.
At Synergy, we help trial lawyers resolve liens the right way. So when the case ends, it truly is completely over.
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 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
Introduction
The landscape of healthcare billing can be complex and confusing, both for healthcare providers and patients alike. When there is third-party liability involved, such as in cases of accidents or injuries caused by someone other than the patient, the responsibility for billing insurance can become even more complex. In these situations, a hospital may explore various avenues to determine the primary source of payment for the medical services provided. One common question that often arises is whether hospitals and healthcare providers are obligated to bill insurance, particularly government programs like Medicare or Medicaid. In this post, we will explore healthcare billing, the role of insurance, and the requirements associated with billing Medicare and Medicaid generally and in third-party liability cases.
The Basics of Healthcare Billing
Healthcare billing is the process by which healthcare providers submit claims to insurance companies or government programs to receive payment for the services they render to patients. Health insurance, whether private or government-sponsored, plays a crucial role in covering medical expenses and ensuring access to healthcare services for covered individuals.
Providers are generally encouraged to bill insurance companies to facilitate the reimbursement process and reduce the financial burden on patients. However, the decision to accept insurance and the specific agreements between providers and insurers can vary.
Do Hospitals and Providers Have to Bill Insurance?
In the United States, there is no federal law mandating that hospitals or healthcare providers must bill private insurance, Medicaid, or Medicare. Providers have the flexibility to decide whether they will accept insurance and enter into agreements with specific insurance plans for the amount of those payments for specific services. While it’s customary for healthcare providers to bill insurance, including Medicare and Medicaid, some may choose not to participate in certain networks or programs. However, this decision can have implications for both the provider and the patient, as non-participating providers may charge higher fees, leaving patients responsible for a larger portion of the bill.
Typically, hospitals initiate billing by submitting claims to the primary health insurance for the medical services rendered. This is a standard practice, and hospitals typically bill the patient’s insurance as part of the normal billing process. In situations involving third-party liability, the hospital may engage in a process known as Coordination of Benefits. This involves determining the order in which multiple insurance policies will contribute to covering the patient’s medical expenses. The hospital may work with the patient’s primary insurance provider, and if applicable, the insurance provider who represents the at-fault third party.
The hospital will likely conduct an analysis balancing how they receive the largest payment for their services in the shortest period of time. While the hospital works through the billing and coordination process, the patient may still be responsible for co-pays, deductibles, or any charges not covered by insurance. Clear communication between the hospital and the patient about financial responsibilities is crucial.
Billing Medicare: An Overview
Medicare, a federally funded program, provides health coverage for individuals 65 and older and certain younger individuals who suffer from specified disabilities. Providers can participate in the Medicare program or be non-participating providers, though this is uncommon.
Participating providers agree to accept Medicare-approved amounts as full payment for covered services, and they submit claims directly to Medicare. Non-participating providers may charge more than the Medicare-approved amount and may require patients to pay the difference, known as “balance billing.”
It’s important to note that while providers are not required to participate in Medicare, they are prohibited from discriminating against Medicare beneficiaries. This means that providers cannot refuse to treat a patient solely because they are covered by Medicare.
When the payment for treatment is someone else’s apparent responsibility, the provider has an obligation to not bill Medicare. Under the Medicare Secondary Payer Act, Medicare may not pay for a beneficiary’s medical expenses when payment “has been made or can reasonably be expected to be made under a workers’ compensation plan, an automobile or liability insurance policy or plan (including a self-insured plan), or under no-fault insurance.”[1] However, if responsibility for the medical expenses incurred is in dispute and other insurance will not pay promptly, the hospital, provider, physician, or other supplier may bill Medicare as the primary payer.
Billing Medicaid: An Overview
Similarly, by law, the Medicaid program is the “payer of last resort.” If another insurer or program has the responsibility to pay for medical costs incurred by a Medicaid-eligible individual, that entity is generally required to pay all or part of the cost of the claim prior to Medicaid making any payment. This is known as “third-party liability” or TPL. Third parties that may be liable to pay for services include private health insurance, Medicare, employer-sponsored health insurance, settlements from a liability insurer, workers’ compensation, long-term care insurance, and other State and Federal programs (unless specifically excluded by Federal statute).
Problems can arise when a provider decides they would rather be reimbursed from a beneficiary’s tort settlement. A provider may make this decision if it suspects it would be entitled to a higher reimbursement amount than it would receive from Medicaid. This does not always work out in the provider’s favor if the settlement amount ends up not being enough to satisfy the provider’s claim. Typically, providers have only 1 year from the date of service to submit bills to Medicaid.
Navigating the Billing Process
Patients should be proactive in understanding their insurance coverage and seeking clarification from providers about their billing practices. It is advisable to confirm whether a healthcare provider accepts the insurance, including Medicare or Medicaid, and inquire about any potential out-of-pocket costs. Being informed and seeking in-network providers can significantly alleviate the complexities of the billing process.
No Surprises Act
The No Surprises Billing Act, officially known as the No Surprises Act, is a U.S. federal law enacted as part of the Consolidated Appropriations Act, 2021. It addresses the issue of surprise medical billing, a situation where patients receive unexpectedly high medical bills, often due to receiving care from out-of-network providers, even in emergencies or situations beyond their control. The act aims to protect patients from exorbitant bills for out-of-network healthcare services, particularly in emergency situations and certain non-emergency situations.
Key provisions of the No Surprises Billing Act include:
- Patients are protected from surprise billing in emergency situations, where they have little or no control over the choice of healthcare provider, by limiting their out-of-pocket costs to in-network amounts.
- In situations where insurers and providers cannot agree on reimbursement rates for out-of-network services, the No Surprises Act establishes an Independent Dispute Resolution (IDR) process. This process involves an independent third party reviewing and resolving disputes between healthcare providers and insurers regarding reimbursement.
- The Act requires healthcare providers and insurers to provide patients with a good faith estimate of the expected costs for scheduled services, allowing patients to better understand and plan for their healthcare expenses.
- Patients are protected from balance billing for out-of-network emergency services and certain non-emergency services provided at in-network facilities.
The No Surprises Billing Act primarily focuses on protecting patients from unexpected and excessive medical bills, and it does not specifically address third-party liability situations in the traditional sense. However, its impact on third-party liability scenarios can be seen in the context of emergency care and situations where patients have limited control over the choice of healthcare providers.
In cases of emergency care, where patients may not have the opportunity to choose in-network providers, the No Surprises Act helps protect patients from balance billing and ensures that their out-of-pocket costs are limited to the amounts they would pay for in-network services. While the No Surprises Act primarily addresses disputes between insurers and providers, the IDR process could potentially be used in certain third-party liability situations where disagreements arise over reimbursement for medical services.
Conclusion
In the complex world of healthcare billing, there is no universal requirement for hospitals and providers to bill insurance, including Medicare or Medicaid. The decision to participate in insurance programs is often at the discretion of individual providers. In normal situations, patients should advocate for themselves by being informed about their insurance coverage, seeking in-network providers when possible, and clarifying billing arrangements with healthcare providers. In third-party liability situations, planning is often not possible. However, the No Surprises Billing Act should add a layer of protection, preventing unexpected billing surprises for patients whether or not available insurance is billed, or the hospital maintains a debt or asserts a lien.
[1] 42 U.S.C. §1395y(b)(2).
Teresa Kenyon, Esq. and Kevin James
Effectively minimizing or eliminating the reimbursement of any claimed medical lien is a critical part of ensuring just compensation for the injured. Personal injury lawyers encounter numerous obstacles in the process of resolving liens. While the negotiation and resolution of liens can be done independently by the attorney and their teams, collaborating with a seasoned lien resolution expert can alleviate these challenges. The obstacles a personal injury lawyer may face encompass time-consuming tasks such as identification of lienholders, navigating the intricate web of jurisdiction-specific lien laws, and negotiating for the most substantial reduction possible. Confronting these challenges may prevent attorneys from focusing on what the firm does best and distract from the primary task of representing more clients successfully.
If you decide not to outsource lien resolution functions to experts, the following noteworthy precedents will serve as valuable guides in your efforts to minimize liens. The applicability of these cases for lien resolution depends on the unique context of the case and differences from jurisdiction to jurisdiction. Nevertheless, these cases have played a substantial role in shaping lien resolution principles in their respective areas.
Medicaid – Arkansas Department of Health and Human Services v. Ahlborn (2006):
Ahlborn was a landmark case that has played a pivotal role in establishing the principle of “proportional recovery” in Medicaid lien reduction. The Supreme Court ruled that Medicaid can only recover from the portion of settlement dollars that can reasonably attributed to medical expenses. The mandate from the Court is that an allocation must be made between medical expenses and all other types of damages. The parties agreed to a pro-rata reduction prior to the Court’s ultimate holding in Ahlborn, but it is most important to note that the Court expressly refused to mandate a method of allocation, only that an allocation must be done.
Medicaid – Gallardo v Marstiller (2022)
The Court provided additional clarification regarding the previous limitations for reimbursement to Medicaid as espoused by Ahlborn by holding that the Medicaid Act permits states to seek reimbursement from settlement payments allocated for future medical care, not just past medical care.
ERISA – Cigna v Amara (2011)
This case focused on whether the employees could enforce the terms of the ERISA Plan based on misleading SPDs, even if the terms of the Plan and the SPDs did not align. The Supreme Court ruled in favor of the employees, holding that the terms of an ERISA plan could be enforced based on equitable remedies when there was a discrepancy between the plan documents and the SPDs. The Court clarified that, under ERISA, the terms of the plan documents govern, but if there is a conflict or discrepancy between the plan documents and the SPDs, the actual plan terms controlled.
ERISA – US Airways, Inc. v. McCutchen (2013):
The US Supreme Court held that while ERISA plans are contractual, and their terms are generally enforceable, equitable doctrines can sometimes be invoked to limit the extent of reimbursement sought by a plan. The Court ruled that when a plan seeks reimbursement from a participant’s recovery, the common-fund doctrine and unjust enrichment principles can be considered to ensure fairness. However, the Court also emphasized that the specific terms of the Plan and the intent of the parties, as expressed in the plan documents, should guide the analysis. The Court remanded the case to the lower courts to apply these equitable principles in determining the extent of reimbursement owed to the ERISA plan, taking into account the circumstances of the case. While used by subrogation vendors as their support for why they don’t have to reduce their self-funded ERISA lien, it is also strongly support for the injured party when the policy language is not clear and concise.
ERISA – Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan (2016):
Montanile focused on whether the ERISA health benefit plan could enforce its subrogation rights to recover funds from Montanile’s settlement after he had spent the settlement proceeds on nontraceable items. The Montanile decision clarified the limitations on health benefit plans’ ability to enforce subrogation rights in certain circumstances. It emphasized the importance of timely action by plans to assert their rights and highlighted the challenges plans may face when seeking recovery from participants who have already spent settlement funds on general expenses.
Hospital/Provider – Howell v. Hamilton Meats & Provisions, Inc. (Cal 2011):
California Supreme Court case that addressed the issue of medical cost recovery in personal injury lawsuits. In this case, the court held that a plaintiff in a personal injury case could only recover the reasonable value of medical services actually provided, as opposed to the higher billed amount. The decision clarified that the “collateral source rule” did not allow plaintiffs to recover medical expenses greater than the amount actually paid for the services, typically negotiated down by health insurers. This ruling had implications for the calculation of damages in personal injury cases, limiting the amount plaintiffs could recover for medical expenses.
Medicare – Bradley v Sebelius (11th Cir 2010)
The 11th Circuit Court of Appeals dealt a significant blow to Medicare’s reimbursement practices under the Medicare Secondary Payer Act. The ruling, stemming from a case challenging Medicare’s ability to recover from the portion of the settlement dollars intended to compensate the heirs for their damages under Florida’s Wrongful Death Act’. This holding establishes that the Medicare Secondary Payer Act does not preempt the Florida Wrongful Death Act and that Medicare was limited to the funds allocated to the survivorship claim.
Medicare Advantage – In re Avandia (3rd Cir 2012):
The first court to conclude that a Medicare Advantage Plans rights under the Secondary Payer Act are identical to those under traditional Medicare. Unfortunately, some subrogation vendors for Medicare Advantage plans have twisted this and subsequent cases to mean that they have the same right to make a recovery but then do not believe it means that they have the same liabilities or requirements for reduction or compromise as traditional Medicare.
Conclusion
In conclusion, effectively managing and minimizing medical liens in personal injury cases is a multifaceted and evolving challenge. The landscape of lien resolution is continuously shaped and redefined by significant legal precedents, such as Ahlborn, Gallardo, Amara, McCutchen, Montanile, Howell, Bradley, and the Avandia case. These rulings collectively underscore the necessity for personal injury attorneys to be acutely aware of the nuanced and jurisdiction-specific legal frameworks governing medical liens.
For attorneys, these cases serve as essential guides in navigating the complex terrain of medical lien resolution. They offer strategic insights into negotiating lien reductions, understanding the scope of lienholders’ rights, and leveraging equitable doctrines to contest excessive claims. More importantly, these rulings underscore the importance of precise and informed decision-making in the resolution process.
The evolving legal landscape, characterized by these landmark cases, reinforces the value of collaboration with experienced lien resolution professionals. While personal injury attorneys possess the legal acumen to represent their clients effectively, partnering with lien resolution experts can provide the specialized knowledge and strategic insight necessary to navigate this complex area efficiently. Such collaboration not only maximizes the potential for reducing liens but also allows attorneys to focus on their core competency—advocating for their clients—thereby enhancing the overall effectiveness and success of their legal practice.
Partner with Synergy for lien resolution services here.
March 9, 2023
Introduction
Navigating the complex world of healthcare liens can be overwhelming, especially for cases involving military personnel, Veterans, Medicaid recipients and the uninsured who need hospital care. However, understanding the intricacies of programs like the Federal Medical Care Recovery Act (FMCRA), Medicaid, and hospital lien laws is crucial to ensure that those who are injured pay back as little as possible. This article explores the FMCRA, Medicaid, and hospital liens, and highlights important laws and applicable court cases that have shaped how these programs recover. By understanding the nuances of these programs, a trial lawyer can be better prepared to decide whether to partner with lien resolution experts to get the best results.
Military
The Federal Medical Care Recovery Act (FMCRA) [1] is designed to ensure that the person or entity responsible for a Veteran’s injury pays for their medical care, rather than the taxpayers. The Act grants the United States the right to recover the reasonable value of medical care and treatment from the party responsible for the injury. This applies to TRICARE beneficiaries and covers care provided by Uniformed Services facilities, care paid for by TRICARE, or both. The funds recovered by the program are used to supplement the budget allocated by Congress, enabling each VA medical facility to provide exceptional care and services to Veterans.
The FMCRA empowers the federal government to recover the costs of medical care in cases where the United States is authorized or required to provide or pay for medical care for someone suffering from a disease or injury caused by the intentional conduct or negligence of a third party. To recover the cost, the government relies on 10 U.S.C. § 1095 and expects beneficiaries to pursue the case to protect the government’s interests. Many military branches require the attorney hired by the injured party to sign an Attorney Protection Agreement, acknowledging their responsibility to protect those interests. However, the government does not provide attorneys representing injured parties with fees or reductions for their interests, specifically for attorney fees and costs associated with effectuating the settlement. [2]
The government has a lien on any proceeds of recovery for medical and hospital care provided by Veterans’ Administration hospitals or private health care providers. The government has three ways to recover medical and hospital care costs in cases of tort liability by a third party: subrogation, intervening or joining in any action brought by the injured person, or initiating such an action in conjunction with the injured or deceased person. None of these procedures is mandatory, and the head of the department or agency furnishing care has the discretion to choose the method.
Medicaid
Medicaid is a public benefit program that provides essential healthcare coverage to individuals who meet financial eligibility criteria. The program is funded by both the federal and state governments, with administration at the state level.
In the landmark case of Ahlborn[3], the US Supreme Court limited the amount of funds that Medicaid can recover when a beneficiary receives a settlement in a third-party liability situation. Under federal law, Medicaid is only entitled to recover funds that are attributable to medical expenses, rather than the entire settlement or judgment. State statutes that mandate full reimbursement of Medicaid expenditures are unenforceable, as far as they do not exempt from recovery the non-medical portions of the settlement, such as damages for pain and suffering or lost wages.
In Wos v. E.M.A. [4], the US Supreme Court held that North Carolina’s statute, which allocated up to one-third of personal injury awards to medical expenses, was preempted by the anti-lien provision of the Medicaid Act. This decision rendered arbitrary allocations in state statutes unenforceable, and the Medicaid anti-lien rule from Ahlborn prevented North Carolina’s statue from being enforced as written.
However, the recent case of Gallardo v. Marstiller[5] potentially changes the analysis set forth in Ahlborn. The US Supreme Court ruled that Florida can seek reimbursement from settlement amounts that represent “payment for medical care,” whether past or future. This decision may have implications for certain cases, and the circumstances of each case will need to be considered to determine whether the Ahlborn analysis applies or is modified now by Gallardo’s inclusion of future care.
Hospital Liens
Hospital lien laws are established by state statutes, and their interpretation through case law varies significantly from state to state. Consequently, there is no single pivotal case or statute that forms the legal basis for a hospital lien.
The key to reducing the amount owed under a hospital lien is to focus on the actual reasonable value of the services provided. Rather than attempting to negotiate down from the full billed charges presented by the hospital, it is essential to assess the fair cost of care and negotiate accordingly. Hospital bills are often inflated, bearing little relation to what should be paid for the services provided.
Those familiar with health insurance may have noticed the vast difference between billed charges and the amount paid to a provider based on contractual agreements between facilities and insurance carriers. For example, a bill could be presented for $45,000, while a health insurance carrier may have a contract to pay only $16,000. Facilities also offer uninsured discounts. It is unfair to require an injured party who receives a settlement to pay the full amount. Moreover, if there are insufficient funds to cover the bill, it is inequitable to attach a lien to the whole settlement and then assert a debt for the remaining amount, which is often significantly more than what would have been paid by Medicare, Medicaid, or a private insurer.
So, what is the reasonable cost for services? It varies depending on the location, facility, and procedure. Obtaining this information is not easy. Hospitals that receive payments from Medicare are required to submit a Hospital Cost Report (CMS Form 2552-110), which provides detailed information about the costs incurred in each department.
Conclusion
In conclusion, even though military medical care, Medicaid and hospital liens third party liability recovery all involve the reimbursement of the cost of medical treatment, how they are handled in the legal system varies. The Federal Medical Care Recovery Act ensures that those responsible for a veteran’s injury pay for their medical care, and the funds recovered supplement the budget allocated by Congress to provide exceptional care and services to veterans. Medicaid provides essential healthcare coverage to financially eligible individuals, with a recent Supreme Court decision potentially changing how reimbursement from settlements is handled. Hospital liens, which vary by state, can be reduced by focusing on the actual reasonable value of services and negotiating accordingly. It is essential to consider the fair cost of care rather than the inflated billed charges presented by hospitals, and obtain detailed information about costs incurred in each department. Ultimately, these topics highlight the importance of ensuring that those in need of medical care receive fair and just treatment in the legal system.
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Are you tired of dealing with the headache of lien resolution on your own? Look no further than Synergy – your ultimate lien resolution partner! With hundreds of years of combined experience, our team of expert negotiators has the skills and knowledge to handle even the most complex liens, dealing with insurance carrier recovery departments and subrogation vendors like no other. By partnering with Synergy today, you’ll gain access to our unparalleled team of lien resolution specialists who will work tirelessly to maximize the reduction of liens. Don’t waste any more time struggling with troublesome and time-consuming liens. Let Synergy’s subrogation-busting team take care of it for you, so you can focus on what you do best – help other clients. Trust us, now is the time to make the smart move and partner with Synergy.
[1] 42 USC 2651-2653
[2] 5 USC 3106
[3] Arkansas Dept. of Health and Human Servs. V Ahlborn, 547 U.S. 268 (2006)
[4] Wos v E.M.A., 568 U.S. 627 (2013)
[5] 596 US ___(2022)
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