Could a Law Firm Owe Double a Part C Plan Lien?

Law firms handling personal injury cases know they must protect Medicare’s interest when it comes to conditional payments. But fewer realize the steep risk involved when that Medicare claim comes from a Part C Medicare Advantage plan. Under federal law, just like with Medicare, failing to properly reimburse a Medicare Advantage Organization (MAO) could trigger a private cause of action. That action comes with a painful penalty: double damages.

The Law Says “Double”

The Medicare Secondary Payer (MSP) Act allows Medicare to recover conditional payments it makes when another insurer is responsible. This right also applies to MAOs, which operate under Medicare Part C. Regulations clarify that MAOs have the same recovery rights as traditional Medicare. That includes the right to sue and demand double what they are owed if reimbursement is ignored.

This isn’t theoretical. In Humana v. Western Heritage Insurance Co., the court awarded double damages when a MAO lien wasn’t paid. The defendant set the funds aside in a trust, but the Eleventh Circuit found that insufficient. The insurer owed $38,310.82, twice the original $19,155.41 lien.

Law Firms in the Crosshairs

It’s not only insurers who face this risk. Law firms have been sued too. One personal injury firm was hit with a $382,000 demand for failing to resolve a $191,000 Part C lien. The case settled out of court, but the lesson is clear: lawyers who disburse funds without addressing MAO liens risk personal liability.

The statute doesn’t require bad faith. Intent doesn’t matter. Good faith isn’t a defense. Nor is ignorance. If your firm had control of the funds, you could be liable.

Why Part C Plans Are Different

Part C plans are run by private insurers, not CMS. That changes the recovery process. You won’t find Part C lien info in the Medicare portal. You must identify and negotiate directly with the MAO plan or their recovery vendor.

Failing to recognize a Part C lien can result in unpaid debts and potential exposure to double damages.

What You Should Do

You need a process. Start by identifying Medicare beneficiaries early. Ask the right questions. Request all insurance cards. Confirm if a Part C plan is involved.

Once you know a Part C plan is in play, get a itemization of charges. Don’t assume you’re in the clear because you’ve resolved the conditional payments with CMS.

Before distributing any funds, ensure all MAO liens are paid. Document your file. Consult a Medicare compliance expert if needed.

Double the Risk, Double the Reason to Care

The takeaway is simple. If you miss a Medicare Advantage lien, you risk more than a claim. You risk paying double.

Don’t let your firm be the next cautionary tale. MAO liens are enforceable, aggressive, and financially serious. Treat them that way.