Why Medicare Conditional Payments and Advantage Plan Liens Matter More Than Ever

If your firm is settling personal injury cases, Medicare conditional payments and Medicare Advantage Plan (MAO) liens aren’t just red tape, they’re legal minefields. Overlooking them could cost your client and your firm big.

Here’s what you need to know and why it matters.

Medicare Conditional Payments: Serious Risk, Strict Rules

Under the Medicare Secondary Payer Act (MSPA), Medicare has a statutory right to recover payments it made for injury-related care when another party (like a liability insurer) is responsible. These are called conditional payments.

CMS doesn’t just have a lien, it has subrogation rights, a private cause of action, and the power to seek double damages. That means if you disburse funds before resolving Medicare’s claim, your firm could be sued.

The process is bureaucratic and slow. You must:

• Contact the Benefits Coordination and Recovery Contractor (BCRC) early
• Review and dispute the Conditional Payment Letter (CPL)
• Report the final settlement
• Wait for and pay the Final Demand within 60 days

Failing to do this properly can lead to interest, Treasury enforcement, or worse, a malpractice claim.

Medicare Advantage Plans: Same Rights, Different Rules

MAOs (Part C plans) are private companies paid by Medicare to provide benefits. Thanks to the Third Circuit’s ruling in In re Avandia, MAOs have the same recovery rights as traditional Medicare under the MSPA.

The kicker: MAOs often work through aggressive recovery contractors like Rawlings/Machinify or Optum/Katch. These entities move fast, push hard, and don’t care about fairness, they care about getting paid.

Trial lawyers need to:

• Identify whether a client is covered by an MAO
• Demand plan documents to confirm repayment rights

MAO liens are often inflated or misapplied. Without deep knowledge of their limits and defenses, you’re fighting blind.

Why It Matters

Ignoring or mishandling Medicare or MAO liens:

• Delays disbursement
• Exposes your firm to liability
• Reduces your client’s net recovery
• Damages your reputation

It’s not just about compliance. It’s about outcomes.

Best Practices

Here’s how experienced firms protect themselves:

• Start early. Identify Medicare and MAO liens pre-settlement.
• Audit everything. Challenge unrelated charges. Don’t rely on preliminary numbers.
• Pay smart. Consider compromise or waiver post-payment to reduce what’s owed.
• Know your defenses. Made whole, procurement cost offsets, and the requirement to follow Medicare protocols can all be leveraged.
• Outsource strategically. A lien resolution partner with Medicare expertise is not a luxury—it’s risk mitigation.

Why Partner with Experts Like Synergy

At Synergy, our lien resolution team understands the nuances of Medicare and MAO claims. We’ve handled thousands of cases and negotiated countless reductions. We know the playbook of recovery contractors, and we use that to protect your client’s recovery.

Let your team focus on trials. Let us handle the liens.