In April 2026, the Oregon State Bar Board of Governors approved a revised version of Formal Opinion 2015-190. The opinion takes a clear position on a settlement practice you have seen plenty of times. A defense lawyer asks you to join your client in indemnifying the defendant for any failure to reimburse Medicare or fund a Medicare set-aside. The opinion answers three questions about whether you should agree. The answer to all three is no.
If you settle cases involving Medicare beneficiaries, this opinion matters whether you practice in Oregon or not. Bar opinions travel. Defense firms read them. Plaintiffs lawyers should read them too.
What the Opinion Actually Says
The opinion addresses three scenarios. First, whether you should join your client in indemnifying the defendant for past medical expenses already advanced by Medicare. Second, whether you should join your client in indemnifying the defendant for future Medicare-related obligations like a set-aside. Third, whether defense counsel should even propose such language to begin with. All three answers come back as no.
The reasoning rests on two Oregon Rules of Professional Conduct. The first is Rule 1.7, which covers conflicts of interest. The second is Rule 1.8(e), which prohibits a lawyer from providing financial assistance to a client in pending litigation outside narrow exceptions like advancing court costs.
When you sign an indemnity agreement alongside your client, you become a surety for your clients obligation to pay Medicare. That status creates an inchoate claim you hold against your own client. If your client fails to reimburse Medicare or fund a set-aside, you face personal liability. Your client now has a financial relationship with you that did not exist before. Your personal interest sits in direct conflict with your obligation to give the client independent professional judgment.
The opinion uses a sharp example. Your client receives a settlement offer. The offer requires the indemnity. You have to advise the client on whether to accept. Your interest in avoiding personal exposure might push you toward a recommendation driven by your own exposure rather than your clients best outcome. The conflict is structural.
Even if you obtained written informed consent under Rule 1.7(b), Rule 1.8(e) still bars the arrangement. By agreeing to cover your clients failure to pay Medicare, you provide financial assistance in connection with litigation. That is what the rule prohibits.
The opinion then turns the analysis on defense counsel. Under Rule 8.4(a), a lawyer who knowingly induces another lawyer to violate the rules also commits misconduct. So defense counsel proposing this language is in violation as well.
Why This Reaches Beyond Oregon
The ABA Model Rules use nearly identical language to Oregon’s Rules 1.7, 1.8(e), and 8.4(a). Most state bars track the same framework. Oregon’s reasoning will apply in most any jurisdiction.
These indemnity provisions appear in settlement releases across the country every day. They show up in standard form releases from major liability carriers. Some attorneys sign them without a second thought because the case has to close. The Oregon opinion gives you written authority to refuse. Many other state bars have reached the same conclusion. The trend is consistent.
The right answer at the negotiating table has always been to refuse the lawyer indemnity and address Medicare separately. The opinion gives you ammunition to push back when the other side acts as if the language is routine.
What This Means for Your Firm
The indemnity issue is one corner of a larger Medicare Secondary Payer compliance picture. Your firm faces real exposure on every settlement involving a Medicare beneficiary or someone reasonably expected to enroll within thirty months. The MSP Act allows the government to recover from anyone who received settlement proceeds, including the law firm. Double damages are authorized by federal statute.
Refusing a bad indemnity provision does not solve the underlying compliance work. You still have to address conditional payments, Medicare Advantage liens, and the analysis around future medicals. You still need accurate ICD codes in Section 111 reporting. You still need a defensible file showing what your firm did and why.
The administrative burden of doing this work in-house is substantial. Conditional payment disputes require pulling Payment Summary Forms, identifying unrelated charges, drafting dispute letters, and tracking deadlines. Medicare Advantage plans require separate research because no central database exists. Set-aside analysis requires medical record review and a defensible methodology.
When a paralegal or case manager spends hours per file on this work, those hours come out of the bank for substantive litigation tasks. The work also requires expertise that does not develop in a general PI practice. Errors are costly. The list of firms that have paid the government to resolve MSP failures keeps growing, with public settlements ranging from $6,000 to $250,000 and ongoing compliance obligations imposed.
Where Personal Injury Firms Should Spend Their Time
The high-value work in your practice is case development, depositions, expert preparation, mediation strategy, and trial. That is where revenue and reputation get built. MSP compliance is required, but does not move a case forward in any of those areas.
Two questions worth asking about your current process. First, what does your team spend per file on lien resolution and Medicare compliance work, measured in actual hours? Second, what would those hours produce if redirected to case development or settlement strategy?
The honest answer for most firms is that compliance work consumes more capacity than personal injury firms realize. Pushing this work to a specialized partner, like synergy., removes a burden from staff who have higher and better uses for their time. The compliance gets done by people who do nothing else, with documented processes and standing relationships with the Benefits Coordination and Recovery Center. Your file stays defensible. Your team stays focused on the work that wins cases.
Practical Takeaways
Read the revised Oregon opinion and keep a copy handy. When a defense lawyer pushes lawyer indemnity language, you have authority to point to.
Audit your standard release review process. If your team signs broad Medicare indemnity provisions as a matter of routine, that practice should stop.
Look at your firm’s MSP compliance process with the same honesty you bring to every other operational question. If the work sits on staff who are already stretched thin, the file is at risk and the firm is leaving precious capacity on the table.
The Oregon opinion is a useful reminder that Medicare compliance is not a paperwork problem. The MSP exposure for you and your firm is real. The work belongs in expert hands so your team focuses on the legal work that drives outcomes.
Why Synergy is the Answer to Help You Scale
Synergy exists to help firms confront the operational realities being driven by Medicare compliance pressure. By removing administrative burdens related to Medicare compliance, lien identification, verification and resolution, from your staff, we help you strengthen your practice’s capacity for high-value legal work and sustainable growth. Learn more at https://partnerwithsynergy.com/medicare-compliance/
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