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Sandy Simpson
13/Nov/2025
lien resolution

5 Common Mistakes in Lien Resolution (and How to Avoid Them)

Lien resolution is often an overlooked step in the settlement process. Nonresponsive lienholders, incomplete billing records, and the pressure to close a case quickly can easily push lien resolution to “tomorrow’s” to-do list. But delaying this step can have serious consequences – reducing the client’s net recovery and increasing the attorney’s potential risk exposure.

Handled incorrectly, liens can delay settlements, reduce client satisfaction, or even open the door to malpractice claims. Handled properly, they protect all parties, maximize recovery, and close cases with confidence.

That’s where ClearLiens by Medivest comes in. Our comprehensive lien resolution services are designed to help attorneys avoid common mistakes, stay compliant, and ensure clients receive the best possible outcomes. To illustrate why lien resolution matters so much, here is a list of five common mistakes attorneys make during the lien resolution process and how to avoid them.

1. Waiting Too Long to Address Liens

Mistake: Many attorneys focus on negotiating the best settlement first, leaving liens as an afterthought.

Risk: Liens don’t go away simply because a settlement is reached. Ignoring them until the end can stall settlement disbursement, leave attorneys scrambling to resolve last-minute issues, or even trigger accrued interest for the client due to failing to pay liens on time (Medicare).

Avoid Problems: Start identifying potential lienholders as early as possible by doing a lien investigation. Building lien resolution into your case workflow ensures there are no surprises when it’s time to disburse funds.

2. Failing to Identify All Liens Properly

Mistake: Overlooking certain lienholders, particularly government entities like Medicare, Medicaid or the Department of Veterans Affairs (VA), Medicare Advantage Plans (MAPs) Managed Care Organizations (MCO’s which are privately administered Medicaid), or any other private health insurance creates hidden risks.

Risk: Missing a lien can expose attorneys and clients to unforeseen repayment obligations, and for Medicare liens, heavy interest obligations, or even double damages. In some cases, the amount of an undiscovered lien can even exceed the settlement itself, leaving the client and, more likely, the attorney with a significant hurdle to overcome.

Avoid Problems: Implement a thorough intake and verification process to minimize potential issues. Ask clients detailed questions about their insurance coverage and treatment history, and confirm with all potential lienholders before closing the case.

3. Accepting the First Payoff Amount Without Question

Mistake: Paying whatever amount the lienholder initially demands.

Risk: Many lien demands include unrelated charges or fail to account for reductions due to case-specific factors, such as comparative fault or limited policy limits. Paying in full without review can unnecessarily reduce your client’s net recovery.

Avoid Problems: Always request an itemized statement and review the detailed payment spreadsheet carefully. Challenge unrelated or inflated expenses and negotiate reductions. Lienholders are often willing to compromise when presented with evidence of financial hardship, pre-existing medical conditions, or legal grounds for reduction.

4. Ignoring Compliance Requirements (Especially Medicare)

Mistake: Skipping or mishandling compliance obligations, such as reporting to the Centers for Medicare & Medicaid Services (CMS).

Risk: Failing to follow Medicare’s strict notification and repayment timelines can result in significant interest obligations or potential penalties, and can create unnecessary liability for your firm.

Right of Action Against “Any Entity”

  • The MSP statute gives Medicare the right to pursue recovery from any party that paid the claim or received a portion of the settlement funds as well as providers who received payment for services related to the compensated claim. This includes the claimant, attorneys, and even insurers in some cases.

Double Damages Penalty

  • If Medicare has to take legal action to recover, the statute allows it to seek double its damages (the amount it paid conditionally minus procurement costs), plus interest.

Avoid Problems: Treat Medicare compliance as a non-negotiable requirement. Familiarize yourself with CMS guidelines or partner with a professional lien resolution provider, such as Medivest, to ensure all requirements are met accurately and on time.

5. Ignoring Compliance Requirements (Especially Medicare Not Educating Clients About Liens Obligations and Timelines)

Mistake: Waiting until after settlement to explain lien obligations and the time it may take to resolve them.

Risk: Clients are often surprised to learn that a significant portion of their settlement will be directed toward healthcare liens. Even more frustrating, lien resolution is not always a quick process. While some liens can take as little as 60 days, others may stretch close to a year, depending on the complexity and the responsiveness of the lienholder. This lack of transparency can leave clients feeling blindsided, dissatisfied, and distrustful, which may lead to strained relationships or even formal complaints.

Avoid Problems: Set clear expectations with clients from the start. Explain both the financial impact of liens and the possible timelines for resolution. By discussing upfront that lien resolution is a necessary, and sometimes lengthy, part of the process, you build trust, manage expectations, and help clients stay patient and informed while waiting for their settlement funds to be finalized.

Conclusion: Protecting Clients, Protecting Your Practice

Lien resolution is far more than a box to check at the close of a case. It’s a critical component of risk management and client advocacy. By addressing liens properly and avoiding common mistakes, attorneys can maximize client recoveries, reduce delays, and protect themselves from unnecessary liability.

If lien resolution feels overwhelming or time-consuming, you don’t have to handle it alone. ClearLiens by Medivest, specializes in navigating the complexities of Medicare, MAP, Medicaid, MCO, VA, TriCare, FEHBA/FELA, ERISA, Hospital/Private Healthcare, and other healthcare-related liens. Partnering with our team helps ensure compliance, streamlines the resolution process, and safeguards both your clients and your practice.

For questions or to get started on a case today, visit us here to request more information.

 

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Medivest
14/Jul/2025
lien investigationlien resolution

The Perils of Failing to Investigate for Medicare and Other Liens

On May 12, 2021, the Court of Appeals of Iowa published its opinion number 20-1250 in Forbes v. Benton County Agricultural Society and reminded everyone that in order to avoid surprises that lead to bad settlement results, plaintiffs in liability cases or employers in Workers’ Compensation cases, should always perform a lien investigation into the existence of any lien holders, entities, or plans that could assert a claim for reimbursement of paid claim charges (for this article, all simply referred to as liens). The next steps upon identifying any such liens would be to follow up with the lien holder or recovery agent resolution for an audit of claim relatedness, before moving forward to report settlement details and negotiate a final payment to resolve the lien.  While the negotiation of the lien is often finalized after settlement, it could easily be a form of legal malpractice for an attorney to move to settlement without first inquiring as to whether liens exist.

In August of 2017, Larry Forbes sustained an injury while on the premises of the Benton County Iowa fairgrounds, and hired an attorney to file a negligence action. After initial discovery, counsel for the Benton County Agricultural Society (Ag. Society), made an offer to Forbes’s counsel to settle for $10,000.

The letter referenced TRICARE but not Medicare and stated: “Based on information you have provided to date, Mr. Forbes had an excellent recovery, and his actual medical bills totaled $2,732, for which Tricare apparently had a subrogation interest.” Burris added, “There is no indication that Mr. Forbes had to pay anything out-of-pocket, or that the medical providers are actually charging anything beyond the $2,732 paid.”

After negotiating, Forbes agreed to settle his suit with the Ag. Society for $12,500. In return, Forbes would dismiss the suit with prejudice. Counsel for the Ag. Society then informed Forbes’ counsel that if Forbes was Medicare eligible, her client would require “final CMS letter, showing the amount owed, if any, in reimbursement to Medicare.” However, after reaching the agreement, Forbes’ attorney learned that Medicare was pursuing a Medicare lien in the amount of $25,482 for reimbursement of conditional payments it made toward Forbes injury related medical expenses. Forbes’ attorney attempted to renegotiate the settlement once the existing Medicare conditional payments came to light. However, the Ag Society pushed back, insisting Forbes accepted the agreed upon terms of the settlement and was aware of his obligations to Medicare. The Ag Society moved to enforce the settlement by filing a motion for summary judgment.

When the case went to court, Forbes argued the agreement was unenforceable and claimed there was a “mutual mistake” because the parties failed to reach a “meeting of the minds.” The Iowa District Court for Benton County disagreed with Forbes and ruled in favor of the Ag. Society granting it summary judgment, based on its position that the settlement contract was enforceable. The Court of Appeals of Iowa affirmed the District Court’s ruling, reaching its affirmation under the theory that settlement agreements are essentially contracts and because the District Court properly applied contract law. The Court of Appeals confirmed that the lower court record showed a “meeting of the minds,” and that Forbes therefore, bore the risk of the mistake.

The Court of Appeals provided a detailed analysis on how a party may be considered to bear the risk of a mistake, such as when:

“(a) the risk is allocated to him by agreement of the parties, or

(b) he is aware, at the time the contract is made, that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient, or

(c) the risk is allocated to him by the court on the ground that it is reasonable in the circumstances to do so.”

The court decided that Forbes bears the risk of mistake in two of these exceptions:

“The first of those two exceptions is called “conscious ignorance.” See id. cmt. c. Under that exception, even if Forbes did not agree to bear the risk of mistake, he was aware when he agreed to the settlement that he had limited knowledge about potential Medicare payments. And despite that uncertainty, he “undertook to perform” the bargain. See id. In doing so, he assumed the risk of the mistake. See id. We agree with the district court that Forbes had exclusive access to his medical records and the ability to investigate whether Medicare would seek a recovery claim.

On the second exception, even if Forbes were not consciously ignorant about the possibility of a Medicare recovery claim, the district court was still reasonable in assigning the risk of mistake to him. See Pathology Consultants v. Gratton, 343 N.W.2d 428, 438 (Iowa 1984); see Restatement (Second) of Contracts § 154 cmt. a. As the court noted, Forbes’s fall occurred nearly two years before he sued. In that time, he had the opportunity and the burden to inquire thoroughly into the payment of his medical bills. It made sense for the court to allocate the risk of any mistake to Forbes.”

The full opinion and summary of the case can be read here: https://www.iowacourts.gov/courtcases/12533/embed/CourtAppealsOpinion.

Takeaways

Lien Investigation should be addressed during the pendency of any liability claim to determine which health plan paid for the injured party’s injury related treatment and whether they will be asserting any contractual or statutory claim for reimbursement/lien.

Law firms representing injured parties should request and gather all bills for treatment when they also request copies of medical records.  They should determine which health plans paid those bills.

They should ask their clients for copies of the front and back of all insurance cards issued to them, including any plans that begin covering the injured party during the representation. This is especially important for those who are eligible/enrolled in any type of government-issued medical insurance plan such as Medicare, Medicaid, VA/TRICARE/CHAMPVA, or who works/worked for a government entity (Such as FELA or FEHBA), or whose health plan is governed by federal law (such as an employer based self-funded ERISA plan).  This is because for many of these plans, little or no steps are required by the plan to perfect their lien to be able to make a claim for reimbursement.

Injured parties almost always want “their money” fast. However, patience is a virtue, and often will protect the injured party and their attorney, especially in Lien Resolution and Lien Investigation. For example, response times for Conditional Payment Letters/Medicare liens from CMS can sometimes take up to 45 days if CMS has no prior notice of the claim and settlement. Responses from VA/TRICARE/CHAMPVA often take longer.

Parties should take this into consideration and be proactive and inquire as to liens early in the case, so that if a settlement opportunity arises, they are able to have an accurate picture of all outstanding liens at the right time.  Otherwise, they may be settling prematurely and, as Mr. Forbes learned, at their peril. If all liens are correctly identified but some of the payments claimed for reimbursement are not injury related, or if there may be a pending request to reduce the claim beyond the often standard procurement cost reductions allowed under Medicare Lien Resolution for the pro-rata fees and expenses to obtain the settlement, such as under an equitable principle such as the Made Whole Doctrine, an attorney may maintain the entire amount of the requested lien, while disbursing fees, expenses, and the non-disputed portion to the client, so that their client, and their firm will be protected.

Neglecting to address liens early on or certainly close to the time of settlement is taking an unnecessary risk.

Working with an experienced lien resolution group will often produce faster response times and more money into your injured clients’ pockets. Happier clients are more likely to refer your firm more business. Lien Resolution practitioners have familiarity with the various lien processes, have lien holder contacts on file, use electronic portals and secure email systems of recovery agents, often use proprietary diagnosis review software, and should know which remedies may be available when, and how to best help the attorney analyze facts and factors of cases in favor of the injured party when applicable.

Medivest Can Help

Medivest can help you navigate through the complexities of lien resolution while you work toward a desired settlement outcome. Call us to today to speak to one of our highly trained settlement consultants for a free lien case consultation. For more information about Medivest or to refer a case, please call 877.725.2467 | Monday – Friday 8 am to 5 pm EST.

 

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Sandy Simpson
30/Jul/2024
cmsNGHP

CMS Shares New NGHP MSP Beneficiary Reference Guide

On July 19, 2024, the Centers for Medicare & Medicaid Services (CMS) created a new reference guide which will be referred to as, Non-Group Health Plan (NGHP) Medicare Secondary Payer (MSP) Beneficiary Reference Guide version 1.1.

The update provides details on the process of recovering conditional payments from the Medicare beneficiary, which typically involve the following steps:

  1. Reporting the case to the BCRC
  2. BCRC issues a Rights and Responsibilities letter
  3. BCRC identifies Medicare’s interim recovery amount and issues the CPL
  4. BCRC issues a Conditional Payment Notification (CPN)
  5. Dispute Process
  6. BCRC issues a recovery demand letter
  7. Assessment of Interest and Failure to Respond
  8. Referral of debt to the Department of Treasury

 

For further details on the steps of recovering conditional payments, visit CMS’ website here. To download the Non-Group Health Plan (NGHP) Medicare Secondary Payer (MSP) Beneficiary Reference Guide Version 1.1 by clicking here.

DISCLAIMER:

This guide is intended to provide Medicare beneficiaries with a reference manual to help them navigate the Medicare conditional payment recovery process. It is in no way intended as an exhaustive, step-by-step guide, nor is it intended to replace, supersede, or otherwise contradict any existing policy or procedural guidance. If anything in this manual appears to create ambiguity or to alter an existing process or obligation in any way, we recommend that the reader seek further guidance.

For Additional Information

Medivest will continue to monitor changes occurring at CMS and will keep its readers up to date when such changes are announced. For questions, feel free to reach out to the Medivest representative in your area by clicking here or call us direct at 877.725.2467.

 

 

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Medivest
29/Mar/2023
cmslien resolution

Expansion of Medicaid Lien Recovery Reiterated to State Medicaid Directors by CMS After Gallardo v. Marstiller

On March 8th, 2023, Centers for Medicare & Medicaid Services (CMS), via Deputy Administrator and Director Daniel Tsai, offered its first official notification regarding the Gallardo v. Marstiller U.S. Supreme Court ruling to all state Medicaid agencies. The notification reiterates the requirement of state Medicaid agencies to recover their injury-related payments (liens) from settlement funds. It informs them that now those lien payment recoveries can be recovered from any portion of settlement funds designated as compensation for medicals. This includes funds considered to be compensation for future medicals of a Medicaid member.

 

A Brief Review of Gallardo v. Marstiller

In 2022, the Supreme Court of the United States (SCOTUS) took on the case of Gallardo v. Marstiller. At question was whether Florida’s Medicaid program was only entitled to be reimbursed for the money it spent for a Medicaid beneficiary’s past medicals from both the portion of the settlement that represents future medical expenses and past medical expenses or only from the portion of the settlement allocated as past medicals.  The SCOTUS affirmed 7-2 that the Medicaid Act permits a State to seek reimbursement from settlement payments allocated for future medical care in addition to payments allocated to past medicals.

Medivest followed the case and decision closely in 2022, and documented the details and some new questions that the decision opened up. One of those questions was, would state Medicaid agencies and their recovery agents become more aggressive in pursuing their reimbursement/lien recoveries from any and all medical damages paid in settlements?  The letter from the Deputy Administrator and Director, RE: Third-Party Liability in Medicaid: State Compliance with Changes Required in Law and Court Rulings, seems to indicate that the answer is yes.

 

CMS Letter – SMD # 23-002

In the letter from the Deputy Administrator and Director, the Gallardo ruling is referenced as reason for pursuing past medical payments (i.e. liens) from the future medical portions of a settlement or past medical portions of a settlement.  Additionally, the Consolidated Appropriations Act, 2022 (CAA, 2022; P.L. 117-103) is referenced. This requires states to have laws in effect that bar liable third-party payers from refusing payment for an item or service solely on the basis that such item or service did not receive prior authorization under the third-party payer’s rules.

It is worth mentioning, the letter does not expand the law. It is CMS’s attempt to help remind the various state Medicaid agencies of their ongoing obligation to recover their liens and that now, post Gallardo, they may reach into any medicals to recover those liens. The full letter can be read here.

 

Questions Regarding Lien Resolution?

Medivest will continue to assist injured parties by auditing Medicaid lien payment ledgers to confirm only injury-related payments are reimbursed, and in negotiating the resolution of any Medicaid liens from traditional Medicaid lien holders and privately administered Medicaid Managed Care Organization (MCO) health plans. We are always working to find ways to reasonably reduce the overall reimbursement for the injured parties.

For additional questions regarding lien resolution, please contact us here.

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Medivest
01/Sep/2020
lien resolutionnews

Is Paying a Third Party Liability Medicare Lien Only the Concern of the Plaintiff?

Click here for a downloadable copy of this blog

On Friday August 21, 2020, the U.S. Attorney’s Office for the Middle District of Pennsylvania announced a $53,295 settlement of Medicare Secondary Payer Act, 42 U.S.C. §1395y(b)(2) (“MSP”) debt.  The settlement described in the press release demonstrates the U.S. Government’s continued interest and intent in enforcing the recovery provisions of the MSP.

Headlines on MSP recovery often focus on plaintiff attorneys who fail to adequately address Medicare conditional payment reimbursement claims, often called Medicare liens by attorneys and Medicare beneficiaries.  However, at fault parties and their insurance carriers need to pay close attention to these MSP recovery actions.  That is because the MSP provides for joint and several liability of primary plans such as liability carriers and self-insureds, including the potential for double damages, even after settlement proceeds have been paid and a release has been signed.

While the plaintiff attorney is the focus of the headline “Harrisburg Law Firm Pays $53,295 To Reimburse Medicare Program” the press release indicates that one of the defendants in the underlying improper drug dispensing case, paid $33,750 of the $53,295 to the U.S. for settlement of the MSP debt.  Insurance carriers or self-insureds sometimes insist on forwarding the lien payment to Medicare because they don’t want to pay a settlement to the plaintiff, only to later be asked to pay the Medicare portion (or more) again, if the plaintiff’s attorney has not timely paid the lien.

There is no information about why the plaintiff’s firm did not pay the amount demanded, but ultimately paid $19,545.15 toward the debt in this settlement with the U.S. Government.  The conditional payments were described in the press release as being $84,353 with the ultimate settlement amount being $53,295.  This seems to indicate that a 36.82% procurement cost reduction was allowed.  The settlement did not include a double damages request or even include any additional interest.

It is not clear from the press release whether there were any appeals over the amount of Medicare’s demand “determination” that led to the delayed payment of the lien and whether the release agreement contemplated the defendant/primary plan agreeing to pay the Medicare debt from withheld settlement funds.   Did the parties do their due diligence in investigating the debt?  Did they coordinate with each other over whether any Conditional Payment Letters contained amounts not related to the claimed/released injuries?  Did they coordinate their respective settlement notification/reporting to make sure that the ICD codes reported from the plaintiff and defense were aligned, and to help prevent an overreach in the future by Medicare in potentially flagging more than just injury related claims.

Could it have been similar to the recent Osterbye case in which the parties seemed to rely on Conditional Payment Letters as opposed to the official Medicare demand at the time of settlement? See JOSEPH C. OSTERBYE, as Administrator of the ESTATE OF…, Slip Copy (2020) 2020 WL 3546869, June 30, 2020.  In Osterbye, the Administrator of an estate of a deceased Medicare beneficiary sued the U.S. Government and the primary plan defendant alleging that there was a mistake of fact as to the amount owed to Medicare when the plaintiff failed to recognize that two files had been opened for the same case.  The plaintiff alleged that the defendant had “initiated” a separate conditional payment claim with Medicare without disclosing to plaintiff the amount of the separate conditional payment amount and arguing that plaintiff would not have settled the case if he had known that Medicare had a lien for over $100,000.00.  At the time of settlement, the Conditional Payment Letter that the plaintiff was in possession of only indicated about $13,000.00 in conditional payments.  In Osterbye, the NJ U.S. District Court denied the defendant’s motion to dismiss on the basis that the settlement may have been entered into based on mistake of fact indicating that the facts of the settlement will have to be investigated.   A similar issue was also addressed in the Langone state court case referenced in a prior blog article where parties mistakenly relied on Conditional Payment Letters instead of a demand letter.

Take Aways:

While some insist MSP recovery obligations are solely a plaintiff’s concern, defendants should pay close attention to make sure the debt is satisfied or otherwise resolved – Medicare will issue a case closed letter once the debt is satisfied even when a compromise is reached for an amount lower than the demand

Not all courts will be as accommodating to the plaintiff’s attorney as in the Osterbye Court.  Instead of a second bite at the settlement apple, the plaintiff’s attorney in Osterbye could have just as easily been accused of legal malpractice by the injured party, if there was a lack of disclosure or lack of competence by the attorney in verifying the proper amount of Medicare’s demand

Plaintiff and defense should cooperate with each other over what steps are being taken to confirm conditional payment resolution, including whether either party has hired a third party to investigate, audit, and/or negotiate the demand balance

Both parties should know that it is imperative to obtain a demand letter as opposed to a Conditional Payment Letter prior to settling a case unless the correct procedures have been taken via the Medicare Secondary Payer Recovery Portal to provide the 120 day anticipation of settlement notification and to request the Final Conditional Payment Calculation within 3 days of a settlement the details of which need to be timely reported

Plaintiff attorneys should be proactive in addressing Medicare’s past interests in a settlement by auditing payment summary forms to dispute non-injury related items, should timely notify Medicare of the settlement details to obtain procurement cost reductions, and should also consider whether lien resolution via waiver or compromise of the procurement cost reduced demand may be a suitable option to help the injured party retain more of the settlement proceeds.

 

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Medivest
02/Jun/2020
lien investigationlien resolution

Update on Medicare Conditional Payment Enforcement Actions

Click here for a downloadable copy of this blog

In March 2020, the U.S. Attorney’s Office, as an enforcement arm of the U.S. Department of Justice, filed a lawsuit on behalf of the Department of HHS and its sub agency, CMS, against an attorney in Texas alleging failure of the attorney representing a party injured in a motor vehicle collision to properly reimburse Medicare for conditional payments.  The case is U.S. v. Carrigan & Anderson, Case 4:20-cv-00991, Filed 03/18/2020 in U.S. District Court for the Southern District of Texas, Houston Division.

That would not really seem like big news as we have written about several conditional payment enforcement actions by the U.S. Attorney’s Office/Department of Justice over the past few years against plaintiff attorneys for a failure to properly inquire with CMS’s Beneficiary Coordination & Recovery Center (BCRC) contractor and address amounts to be reimbursed to CMS.[1]

However, unlike some of the other cases, the plaintiff attorney in this case took proactive steps attempting to address Medicare’s past interests in the liability settlement.  Unfortunately, the steps taken were misguided.  Had the attorney requested a compromise or waiver and/or appealed the demand amount by CMS, he would have likely fared better.

Prior to settlement, the attorney properly provided notification of the claim to the BCRC triggering the search by the BCRC for claim related conditional payments.  The case settled for $70,000.00 and the plaintiff attorney provided notification of the settlement to the BCRC.  Presumably, the plaintiff and attorney had received a copy of an earlier Conditional Payment Letter.  Within a few weeks after the settlement notification was provided, the BCRC delivered a demand letter in the amount of $46,244.74, demanding payment within the standard 60 day time period  from the date of the demand and informing of the right to appeal its demand amount.

Let Medivest Handle Your Lien Resolution Matters

The attorney creatively filed a motion with a state court in Texas challenging the amount demanded by Medicare and provided notice of same to the BCRC.  He called the motion, Motion To Determine Portion of Plaintiff’s Settlement That Constitute Reimbursement of Medical Payments Made in and Regarding Settlement.  The court reviewed submitted evidence including an affidavit signed by plaintiff counsel suggesting the claim settled at 1/10th its full case value, and issued an order reducing the amount to be paid to Medicare by 90% to a figure of $4,700.00.  Plaintiff counsel submitted a copy of the order to the BCRC.  The full demand amount went unpaid and began accruing interest at nearly 10% APR on the 61st day post-demand (for current demands, the annual interest percentage rate is now over 10%).

As of March 18th, 2020, when the U.S. filed its recovery action in U.S. District Court, the alleged reimbursement amount had increased to $53,445.93 including interest. The U.S. requested recovery of its fees and costs but interestingly did not request double damages.

The U.S. Attorney’s position is that state courts lack authority to make determinations of federal law including amounts owned to Medicare under the Medicare Secondary Payer Act, 42 U.S.C. Section 1395y(b)(2) (MSP).   Furthermore the complaint asserts that because there is an administrative procedure in place under the current MSP regulations, if the plaintiff and attorney disagreed with the demand amount, the administrative appeals process should have been followed, i.e. that there was a failure to exhaust administrative remedies, an express condition precedent to seek redress in U.S. District Court for appeal of Medicare Initial Determinations such as the amount of a demand or a denial of a waiver.

Take Aways

Dispute and Appeal
  • Review each conditional payment letter to verify each reimbursement claimed is injury related
  • Dispute all non-injury related claims in a timely manner before the matter settles or before CMS issues its final demand
  • If unhappy with a CMS reimbursement of conditional payment demand, consider appealing through CMS’s administrative appeals process
  • You have 120 days to request a first level appeal in writing

In the meantime, consider one of the other post demand dispute processes allowed that may offer your client relief from what you consider to be an unreasonable demand.  Depending on the outcome, the appeal may not be necessary.

Compromise Requests 
  • Requesting a compromise to the BCRC offering a sum certain to resolve the claim laying out arguments based in equity similar to the ones made to the state court judge in the case above and/or according to regulations governing compromises by the U.S. Government existing in the CFR
  • Compromise requests are forwarded by the BCRC to the applicable CMS Regional Office (RO) and a response is provided within 45 days of the BCRC’s receipt of the request
  • Responses will either be accepted, countered, or rejected
Waivers
  • If not happy with the response to the compromise request and if the financial condition of the plaintiff is such that they have a hard time meeting their day to day living expenses, a waiver request could be an alternative option
  • Waiver requests entail filling out a detailed Social Security Administration financial form called the SSA 632-BK
  • To make its decision, CMS will evaluate resources of the plaintiff, income, the amount of the settlement, outgoing expenses, and hardship factors and may take up to 120 days from start to finish so you need to be mindful of the appeal deadline for the original demand.

 

[1] January 2020 DOJ US Attorney https://www.medivest.com/philadelphia-based-personal-injury-law-firm-agrees-to-resolve-allegations-of-unpaid-medicare-debts/ Philadelphia plaintiff firm settles for $6,604.59,

Nov 2019  US Attorney General – Baltimore plaintiff firm settles with Medicare for $91,406.98

March 2019 DOJ US Attorney  – Maryland plaintiff firm settles with Medicare for $250k

June 2018 DOJ US Attorney – Philadelphia plaintiff firm settles with Medicare for $28k

 

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Medivest
30/Jan/2020
lien investigationlien resolutionmedicare

Hospital Lien Collection Case in Colorado: Medicare Beneficiaries Beware!

A state appellate court in Colorado just held that hospitals in Colorado may forego billing Medicare or Medicaid even when an injured party is a Medicare or Medicaid beneficiary, and may proceed against the injured party as long as the hospital follows certain procedures. See Harvey v. Centura Health Corporation and Catholic Health Initiatives, — P.3d —- (2020) Court of Appeals No. 19CA0091 January 30, 2020*.

Those procedures are that the hospital must first submit charges to the “property and casualty insurer and primary medical payer of benefits available” to the injured person when that person is injured as a result of negligence or wrongful acts of another person, before filing a lien. The state appellate court clarified that neither Medicare nor Medicaid are primary payers of medical benefits and because of this, held that Hospitals in Colorado do not need to bill Medicare and/or Medicaid before filing a lien.

Therefore, Colorado hospitals interested in collecting larger amounts of money than Medicare and/or Medicaid will pay will likely forego billing Medicare and/or Medicaid, and will put the at fault party on notice of its charges, will bill the liability carrier for the at fault party, and then proceed to file a lien against the injured party likely to receive a third party liability settlement.

Of course the charges must be related to the underlying third party liability injury and must be reasonable and necessary. So even if a Colorado hospital lien is perfected, the injured party has a right to dispute whether the charges are injury-related and to contest the reasonableness or necessity of the charges.

Call Medivest when your injured client is facing a hospital lien to allow our specialists to first determine if all of the requested charges are related to the underlying injury, and to negotiate with the lien holder or its recovery agent regarding the amount of reasonable and necessary charges. Don’t let your client pay unreasonable or unnecessary hospital bills even when a lien is filed!

*While this case has not been released for publication in permanent law reports and could be subject to a petition for rehearing in the Court of Appeals or for Certiori in the Supreme Court of Colorado, it is important to be aware of hospital practices in this regard.

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Medivest
07/Nov/2019
lien resolution

Law Firm Pays Over $90,000 to Settle A Failure to Reimburse Medicare Claim Brought by U.S. Attorney for the District of Maryland

Once again, a law firm was alleged to have failed to properly reimburse Medicare for conditional payments made by Medicare for injuries that were compensated in at least one settlement on behalf of an injured client. The press release, which can be found here involves a fact pattern a little different from a few other recent recovery actions by the U.S. Government related to alleged MSP violations. Often attorneys will refer liability cases to other attorneys or firms that handle personal injury, premises liability, and medical malpractice claims. The attorney that refers the case is typically allowed to share in the attorney’s fees obtained upon successful resolution. The fees obtained by the referring lawyer/firm are supposed to approximate and reflect a reasonable amount for the amount of work they do. Some attorneys do a thorough intake procedure and maintain contact with the client throughout the representation, are copied on all correspondence, and may provide input on strategy and procedure. After all, they have a responsibility to the injured party that originally contacted them in the first place. This matter involved six cases the U.S. Attorney’s office was investigating and of the six, four had been referred by the investigated firm to co-counsel. The firm was held responsible for the alleged failures to reimburse Medicare, regardless of whether they were a referring firm for a case handled by another firm or whether they were the handling the claim from start to finish.

We have provided other instances over the past few years where settlements were made with the Department of Justice including here and here.

However, Plaintiff attorneys in particular should be on high alert because the most recent enforcement actions have been focused on attorneys that disbursed funds to their clients after case finalization but failed to ensure that Medicare’s conditional payments were paid or otherwise resolved.

Take Aways:

  • Because the MSP grants both a direct lien right and a subrogation right to the U.S. to collect Medicare’s conditional payments, parties to a settlement should inquire, evaluate and confirm all injury-related Medicare expenditures for past medicals at the time of settlement.
  • Even if you “only” refer an injury case to another attorney who may do a majority of the work on the case, you should take an interest in verifying the existence of any liens that need to be addressed.
  • Due diligence is required for both the defense and plaintiff side to avoid unnecessary MSP legal exposure.
  • In addition to checking and verifying the correct demand amounts from CMS contractors, prior to settlement, steps should be taken by all parties to expand lien search inquiries beyond traditional Medicare (and Medicaid) to determine whether a Medicare Advantage Plan/Organization (MAP/MAO) or Prescription Drug Plan (PDP) made any conditional payments that could be recovered under the MSP. This is because the MSP private cause of action provision has been held in at least two federal circuits to apply to MAO’s and would likely be held to apply to PDP’s too.
  • There is value in evaluating Conditional Payment Summary forms that accompany the conditional payment correspondence from Medicare to confirm all entries on the form are injury-related and/or determine whether some entries should be disputed.
  • During the lien investigation process, parties should analyze whether a compromise (reduction) of a lien or potentially a waiver may be appropriate.

It is crucial for prospective settling parties to investigate conditional payment reimbursement amounts or work with an entity familiar with lien investigation procedures.
Medivest provides lien resolution services to help parties satisfactorily negotiate outstanding public and private health care matters including Medicare liens, Medicaid liens, Veterans Administration/TriCare liens, hospital liens, and doctors’ bills. Our lien resolution team works hard to dispute non-claim related bills, resolve and reduce outstanding bills/liens, and will seek refunds for amounts already paid when appropriate. Please reach out to discuss lien resolution today.

 

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Medivest
26/Mar/2019
lien resolutionnews

Law Firm to Pay $250,000 to U.S. For MSP Non-Compliance (Failing to Reimburse/Resolve Medicare Lien from Personal Injury Settlement Proceeds)

The following is a press release from the U.S. Attorney’s Office for the District of Maryland on behalf of the U.S. Department of Justice (DOJ) announcing a Medicare Secondary Payer Act (MSP)[1] MSP non-compliance settlement with the U.S. by a plaintiff law firm from Maryland that failed to properly address or make Medicare conditional payment reimbursement (i.e. pay a Medicare lien) from the proceeds of a medical malpractice settlement secured for a firm client in 2015.  This MSP non-compliance settlement is similar to the one we wrote about from June of 2018 regarding a plaintiff law firm in Pennsylvania.

“Department of Justice
U.S. Attorney’s Office
District of Maryland
FOR IMMEDIATE RELEASE
Monday, March 18, 2019

Maryland Law Firm Meyers, Rodbell & Rosenbaum, P.A., Agrees to Pay the United States $250,000 to Settle Claims that it Did Not Reimburse Medicare for Payments Made on Behalf of a Firm Client

Baltimore, Maryland – United States Attorney for the District of Maryland Robert K. Hur announced that Meyers, Rodbell & Rosenbaum, P.A., a law firm with offices in Riverdale Park and Gaithersburg, has entered into a settlement agreement with the United States to resolve allegations that it failed to reimburse the United States for certain Medicare payments made to medical providers on behalf of a firm client.

“Attorneys typically receive settlement proceeds for and disburse settlement proceeds to their clients, so they are often in the best position to ensure that Medicare’s conditional payments are repaid,” said U.S. Attorney Robert K. Hur. “We intend to hold attorneys accountable for failing to make good on their obligations to repay Medicare for its conditional payments.”

According to the settlement agreement, in and prior to 2012, Medicare made conditional payments to healthcare providers to satisfy medical bills for a client of the firm. Under the Medicare statute and regulations, Medicare is authorized to make conditional payments for medical items or services under certain circumstances, with the requirement that when an injured person receives a tort settlement or judgment, those receiving the proceeds of the settlement or judgment, including the injured person’s attorney, are required to repay Medicare for the conditional payments.

In December 2015, with the firm’s assistance and representation, the client received a $1,150,000 settlement in a medical malpractice action stemming from the client’s injuries. After Medicare was notified of the settlement, Medicare demanded repayment of the Medicare debts incurred from those conditional payments, but the firm refused to pay the debt in full, even when the debt became administratively final.

Under the terms of the settlement agreement, the firm agreed to pay the United States $250,000 to resolve the Government’s claims. The firm also agreed to (1) designate a person at the firm responsible for paying Medicare secondary payer debts; (2) train the designated employee to ensure that the firm pays these debts on a timely basis; and (3) review any outstanding debts with the designated employee at least every six months to ensure compliance.

This settlement reminds attorneys of their obligation to reimburse Medicare for conditional payments after receiving settlement or judgment proceeds for their clients. This settlement should also remind attorneys not to disburse settlement proceeds until receipt of a final demand from Medicare to pay the outstanding debt.

U.S. Attorney Robert K. Hur commended Eric Wolfish, Assistant Regional Counsel, United States Department of Health and Human Services, Office of the General Counsel, Region III, for his work in the investigation. Mr. Hur thanked Assistant United States Attorney Alan C. Lazerow, who handled the case.

# # #

Take Aways:

  • Because the MSP grants both a direct lien right and a subrogation right to the U.S. to collect Medicare’s conditional payments, parties to a settlement should inquire, evaluate, confirm, and address all injury related Medicare expenditures for past medicals prior to, or at a minimum, at the time of settlement.
  • Because the MSP grants a private cause of action (MSP PCOA)[2] and Medicare Advantage Plans that privately administer traditional Medicare coverage for enrolled Medicare beneficiaries (MAO’s) have successfully availed themselves of this MSP PCOA against primary plans[3], parties should also inquire, evaluate, confirm, and address all injury related MAO payments for past medicals as described above.
  • While the Eleventh Circuit recently ruled that MSP private cause of action double damages could only be brought against primary plans[4], case law is not fully settled throughout the U.S. as to whether those other than primary plans like attorneys for Medicare beneficiaries would be liable for double damages under the MSP PCOA[5].  However, there is no doubt the double damages remedy clearly listed in the MSP’s direct cause of action provision applies in recovery actions by the U.S. Government against those who receive payments from primary plans, including Medicare beneficiaries and their attorneys[6].
  • When representing an injured party, doesn’t it make sense to address the issue at the time of representation instead of waiting to see whether the issue results in legal liability or a legal malpractice claim stemming from MSP non-compliance?
  • Due diligence is required for both the defense and plaintiff side to avoid unnecessary MSP non-compliance settlements/legal exposure.

[1] 42 U.S.C. 1395y(b)(2) et seq.

[2] “There is established a private cause of action for damages (which shall be in an amount double the amount otherwise provided) in the case of a primary plan which fails to provide for primary payment (or appropriate reimbursement) in accordance with paragraphs (1) and (2)(A).” 42 U.S.C. § 1395y(b)(3)(A).

[3] See e.g. In re Avandia Mktg., Sales Practices & Prods. Liab. Litig., 685 F.3d 353 (3d Cir. 2012); Humana Med. Plan, Inc. v. W. Heritage Ins. Co., 832 F.3d 1229 (11th Cir. 2016).

[4] MSPA Claims 1, LLC v. Tenet Florida, Inc. — F.3d —- 2019 WL 1233207 18-11816 (11th Cir. March 18, 2019).

[5]  In Aetna Life Ins. Co., v. Nellina Guerrera et al., No. 3:17-CV-621 (JCH), 2018 WL 1320666, (D. Conn. Mar. 13, 2018), grocery store Big Y’s motion to dismiss was denied after Big Y, the alleged tortfeasor in the liability action and thus, a primary plan, settled and paid a Medicare beneficiary. Aetna, a MAO, was allowed to proceed with a MSP private cause of action for double damages against Big Y. However, the court granted motions to dismiss by the Medicare beneficiary and the Medicare beneficiary’s attorney, because under the MSP PCOA scenario, they were not primary plans.

[6] MSPA Claims 1, LLC v. Tenet Florida, Inc. — F.3d —- 2019 WL 1233207 18-11816 at 6 (11th Cir. March 18, 2019) (“[u]nlike the private cause of action, the government’s cause of action broadly permits lawsuits against ‘any entity that has received a payment from a primary plan’ – a grant that includes medical providers.” citing 42 U.S.C. § 1395y(b)(2)(B)(iii)(the MSP direct cause of action by the U.S.); Haro v. Sebelius, 747 F. 3d 1099, 1116 and U.S. v. Stricker, 524 F. App’x 500, 504 (11th Circ. 2013)(unpublished)).

 

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