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, achieving a settlement or verdict is only half the battle. The real work isn’t finished until every lien is resolved. Yet lien resolution remains one of the most daunting aspects of personal injury practice. It is complex, time-consuming, and full of traps that can expose both clients and attorneys to risk.
So why is lien resolution such a challenge for PI firms and why is getting it right so important?
The Maze of Legal Obligations
Every personal injury firm knows they have a duty to identify and resolve all liens before distributing a client’s net recovery. What’s less clear is the scope of those obligations. Questions that routinely arise include:
- Am I personally liable if a lien isn’t resolved? In some cases, yes. Attorneys have faced lawsuits and even government enforcement actions for unpaid liens.
- Is it a lien, a reimbursement obligation, or just a debt? Sorting out what type of claim exists—and whether it is enforceable—requires detailed investigation.
- Does the claim cover past payments only, or future ones too? Plan language and governing law can make this distinction murky.
State and Federal Complexity
Different lien types fall under different legal frameworks. Some are governed by federal law like ERISA, Medicare, Medicaid, FEHBA, or the Federal Medical Care Recovery Act—while others hinge on state-specific statutes. In multi-state practices, the rules shift depending on the jurisdiction, multiplying the complexity.
The Role of Recovery Vendors
Even when the applicable law is clear, PI firms must often deal with aggressive recovery contractors such as Rawlings, Optum, Equian, and Conduent. These vendors have teams of professionals whose sole mission is maximizing recovery on behalf of plans. Negotiating with them requires not only persistence but also deep knowledge of lien law and available defenses.
The Stakes for Clients
Lien resolution isn’t just a procedural hurdle, it directly impacts client recoveries. If liens are overpaid, clients take home less than they deserve. If liens are not handled correctly, clients may face ongoing claims long after the settlement check clears. Trial lawyers must also balance “made whole” considerations, ensuring clients aren’t unfairly stripped of compensation they fought hard to win.
Why Getting It Right Matters
At its core, lien resolution is about:
- Protecting Client Recoveries: Every dollar unnecessarily paid to a lienholder is one less dollar in your client’s pocket.
- Protecting the Firm: Mistakes can lead to malpractice claims, bar complaints, or even personal liability.
- Protecting Your Reputation: A firm known for maximizing client outcomes and avoiding post-settlement chaos earns more 5-star Google reviews, referrals and long-term trust.
Final Thought
Lien resolution is one of the most challenging, high-stakes responsibilities a PI firm faces. It requires legal analysis, negotiation skills, regulatory knowledge, and meticulous documentation. For many firms, it is simply not efficient or safe to manage alone.
That’s why outsourcing lien resolution to trusted experts makes sense. With Synergy as your partner, you can safeguard client recoveries, reduce liability, and free your team to focus on what you do best: winning cases.
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
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.
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 representing injury victims, trial lawyers often find themselves navigating the murky waters of ERISA self-funded plans. A recurring and increasingly problematic issue is the use of reimbursement agreements. Some ERISA plans will refuse to pay claims until the injured party signs one of these agreements. On its face, that may sound routine, but these agreements often contain harsh, one-sided provisions that create major problems for both clients and their attorneys.
What’s in These Agreements?
Reimbursement agreements are essentially a second contract layered on top of the plan documents. They often include language requiring 100% reimbursement of injury-related medical payments, sometimes without consideration of attorney’s fees, costs, or equitable doctrines like “made whole” and “common fund.”
While the requirement to sign a reimbursement agreement appears very commonly in ERISA plan language, there are a minority of plans that are very aggressive about enforcing the requirement Union plans, in particular, will suspend claim payments until the member signs and returns the agreement. This puts injured parties in a bind: either agree to the plan’s terms (sometimes broader than what the plan documents actually allow) or risk having treatment bills go unpaid.
How Courts View These Provisions
For the most part, courts have upheld reimbursement agreements. However, there’s an important caveat: A reimbursement agreement cannot expand a plan’s rights beyond what is contained in the plan documents.
For example, if the plan documents do not expressly disavow the made whole doctrine, the plan cannot insert such a provision into the reimbursement agreement and enforce it. The courts have drawn this line, but the reality is that many participants and their attorneys lack the leverage, or resources, to fight these provisions before payments are cut off.
Why This Matters for Trial Lawyers
The consequences for your clients are real:
- Unpaid Medical Bills: If claims are pending while litigation plays out, clients may be hounded by providers or face credit damage.
- Settlement Delays: Unresolved reimbursement disputes can stall finalizing a case, putting both the client’s recovery and the lawyer’s fee at risk.
- Reduced Net Recovery: Even when settlements are reached, a reimbursement agreement with 100% payback can wipe out large portions of a client’s net.
At its core, the question is: Why force an injured party to sign a reimbursement agreement that simply duplicates rights the plan already has? The answer is leverage. Plans know that by withholding payment, they can pressure participants into signing agreements that tilt the balance even further in their favor.
Protecting Your Clients
Trial lawyers should take several steps when confronted with these situations:
- Review the Plan Documents First – Before advising a client to sign anything, examine the actual language in the Summary Plan Description (SPD) and master plan. The plan’s rights start and end there.
- Push Back on Overreach – If a reimbursement agreement attempts to extend rights beyond the plan terms, argue the lack of enforceability. Courts generally will not allow expansion through a secondary agreement.
- Educate Clients – Explain the risks of signing versus not signing. Clients should understand that refusing may delay claims payments, but signing could lock them into worse repayment obligations.
- Consider Early Lien Resolution Assistance – Specialists who deal with ERISA and union plans every day can help assess enforceability, negotiate reductions, and push back against overreaching agreements.
Why This Issue Will Keep Growing
Subrogation law continues to evolve, and recovery vendors are relentless. RAND research confirms that healthcare liens are becoming more frequent, more aggressive, and more burdensome for injury victims. As plans refine their strategies, trial lawyers must be equally prepared to protect their clients’ recoveries.
At Synergy, we do see ERISA plans use reimbursement agreements as a pressure tactic. While not every plan enforces them, those that do can cause significant disruption to claim resolution. Understanding the nuances and knowing when to fight can be the difference between safeguarding your client’s net recovery and watching it disappear.
Written by: By Kevin James, Esq. | Lien Resolution Strategy Coach
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
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