medicare lien resolution - Solutions for Workers' Compensation and Liability Settlements

13/Nov/2025

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.

Natt Reifler, Esq., CMSP, VP of MSP Compliance

08/Jan/2019

Planning to protect Medicare’s future interests should be part of any diligent Medicare Secondary Payer Act[1] (MSP) compliance analysis. However, because enforcement actions by the U.S. under the MSP have focused on reimbursement of Medicare for payments occurring prior to settlement, Medicare lien resolution (i.e. investigating and negotiating satisfactory payment of Medicare conditional payment reimbursement demands), should be placed at the top of the MSP compliance list by primary payers and those representing injured parties. We recently wrote about conditional payment correspondence from the Centers for Medicare & Medicaid Services (CMS) through its BCRC and CRC contractors, the updated functionality of the Medicare Secondary Payer Recovery Portal (MSPRP), and the importance of obtaining correct conditional payment amounts so settlements can move forward while protecting Medicare’s past interests. When the U.S. government’s conditional payment reimbursement amount (Medicare lien amount) is larger than a potential settlement amount or the payment of the full lien amount will take up a good portion of a Medicare beneficiary’s net settlement, a beneficiary will be less interested in settling. Enter Medicare lien resolution.

Medicare Lien Resolution Road Map

When we perform Medicare lien resolution, our goal is to get CMS to evaluate the Medicare lien amount compared to the net amount to be received by injured party after fees and costs are deducted. Additionally, we sometimes ask CMS to evaluate the Medicare lien amount compared to the weakened financial position/physical condition of the Medicare beneficiary after an accident. When the net settlement is unfairly low compared to the Medicare lien amount, CMS will often reduce the lien prior to settlement. There are several federal statutes and accompanying regulations that provide authority for CMS to reduce (compromise) or sometimes waive Medicare liens. The statutes and regulations outline standards and factors that may be considered for full or partial reductions of Medicare lien amounts. These factors often focus on the ability of the injured party to pay the lien, costs the government would incur to pursue collecting the lien, as well as the injured party’s financial/physical circumstances.

Medicare Lien Waiver Process

The Medicare lien waiver process is a more involved process than the compromise process. Waiver requests typically focus on the financial position of the injured Medicare beneficiary, who may have higher expenses and/or lower income after sustaining an injury. After settlement occurs and funds are transferred, while the MSP technically still allows the U.S. to pursue the primary payer (entity responsible for payment) when a Medicare beneficiary fails to satisfy a Medicare lien, the Medicare beneficiary is most often considered the debtor and pursued by CMS initially through the Benefits Coordination and Recovery Center (BCRC). Attorneys for Medicare beneficiaries can also be caught in the MSP cross hairs. Waiver requests for a Medicare beneficiary are sent to the BCRC. In turn, the BCRC typically asks for a SSA-632 form to be filled out with a variety of financial information about the beneficiary. Waiver determinations may be made by BCRC staff and are usually based on financial hardship.

To speed up the process and increase the likelihood of a positive outcome, it is a best practice when requesting a waiver to provide a full financial picture of the beneficiary, including either a completed SSA-632 form or as much of the information requested by that form as can be obtained, so BCRC staff will have adequate information to reach a fair determination. A waiver may be granted when continuing the collection would be against “equity and good conscience.” The process takes about 120 days from start to finish for a waiver determination to be made. If a conditional payment demand has been paid, a waiver or compromise request may still be made, and a refund will be considered. If the BCRC makes a determination to refund all or part of the prior payment, the refund will typically take an additional 3-4 weeks, depending on whether payment had been made to the BCRC directly or whether it was made to the Department of Treasury after a referral of the debt to Treasury by the BCRC.

Medicare Lien Compromise Process

If there is not a significant financial or physical hardship to the Medicare beneficiary, but the dollar amount of the projected settlement is low compared with the likely settlement value and/or the Medicare lien amount, an alternative to a waiver request is a Medicare lien compromise request. To request a compromise, a third-party representative may offer to pay a specific dollar amount on behalf of the beneficiary to fully compromise the outstanding Medicare debt/lien amount. The requester must include the settlement amount (or settlement offer), the amount they are asking CMS to accept as full payment, and the actual or projected attorney fees and costs associated with procuring the settlement. Attorney fees and costs are omitted when the beneficiary is not represented by counsel. CMS, through the BCRC, either responds by accepting the offer or presenting an alternate proposed amount. At that point, the beneficiary must pay the countered amount or if accepted, pay the accepted amount within 60 days of the BCRC response, or else the offer is no longer valid.

Letting a representative act on your client’s behalf in communicating and negotiating with CMS has helped lawyers save time and put more money in the pockets of their clients, while helping parties to the settlement comply with the MSP with respect to Medicare’s past interests. Count on Medivest to help you with your Medicare lien resolution needs.

[1] 42 U.S.C. § 1395y(b)(2) et seq.