The term “lien” represents three different types of health insurance claims against your case.
First, most of what we call “liens” are not liens at all. They are more accurately described as reimbursement rights to the health insurance company. These rights are created by laws and/or contracts. As an example, Medicare’s reimbursement right is through the United States statute 42 USC 1395y.
Second, some rights are subrogation rights, which allow a health insurance to stand in your shoes and make a claim against the defendant. These subrogation rights can get in our way during lawsuits, so, many health insurers agree to stay out of the way if their subrogation right is treated like a reimbursement right.
Third are true liens. Liens generally must be filed in a county’s court; however, they are not prevalent in injury litigation. The term lien has been taken to cover all three of reimbursement, subrogation, and liens.
Most insurance companies, including state and federal agencies like Medicaid and Medicare, have either a statutory right or a contractual right to a lien. Each state has its own laws governing these liens or reimbursement rights (click here to see them all), while some federal laws can supersede or override those state laws.
You can skip the lien process only if you are willing to take a legal risk and potentially violate laws or contracts you (or your client) have signed. Practically speaking, not all potential lien holders have the means to determine their beneficiaries have lawsuits; however, if a reimbursement right exists it usually puts the onus on the injured person (and their attorneys) to reach out to start the lien process.
The eight officially anti-subrogation states are:
- New Jersey
- New York
- North Carolina
These states statutorily do not allow subrogation for commercial health plans. But when is subrogation allowed in these states?
Generally, self-funded ERISA plans, Federal Employee Health Benefit Act (FEHBA) plans, Medicare, and Medicaid can all claim a lien in these states because they follow federal law (not state law). It’s that simple. Other states have rules that limit subrogation (like Georgia) or that require it be part of the insurance contract (like Michigan and Illinois).
Unfortunately, anti-subrogation doesn’t mean you can ignore insurance companies. The best policy is to review and resolve all health insurance liens – sometimes you’ll find they have no rights and sometimes you’ll find that the plan’s rights supersede state law (e.g., ERISA liens).
There are eight states that are called “non-equity” states. In these states, the state common law (case law) does not create a subrogation or lien right as the default rule. But note that the common law only applies if the insurance plan/contract language is silent regarding subrogation or liens. Alternatively, in these non-equity states, the plan must affirmatively create a lien right (unless it is federally protected). These states are:
- New Hampshire
- South Carolina
- Massachusetts (limited to medical expense benefits, life insurance, and accident insurance) See Frost v. Porter Leasing Corp., 436 N.E.2d 387 (Mass. 1982).
So, as long as the health insurance is not Medicare, not Medicaid, not ERISA, not Tricare (or VA), and not FEHBA, then, these eight states require the plan language include subrogation and/or reimbursement rights.
We have designed our systems to help you avoid spending the time to pick and choose which cases to send us. We look for any case that has, or might have, a lien to resolve. We are able to provide verification of certain health insurance coverage, in addition to lien resolution. We will handle any case, from single lien cases to those that are upside down with major liens. Our proprietary workflows reduce time-consuming delays in all circumstances, while our fee structure allows you to send all your cases.
Start early. You want all lines of subrogation communication available as the case progresses. Early starts can lead to earlier resolution as you will have the lien amount in hand when you settle. This information can help you track the progress of the lien as your case progresses, and use the lien to help determine proper case value.
We use our proprietary OCR software to review and compare actual client treatment to the ICD-9 & ICD-10 code sections used in the Medicare Conditional Payment Letter or other lien holder’s itemizations.
Yes. Where your case includes a No-Fault or Med-Pay component Medicare opens two types of files.
First, it opens the No-Fault file, which refers to continuing payments made by an insurance company. Medicare can open multiple versions of its No-Fault file depending on who it considers the “debtor.”
Second, it opens the Liability file, which refers to any lump-sum payment (settlement, judgment, etc.) regardless of whether it is from 3rd party insurance.
Yes. While most correspondence occurs between MASSIVE and the BCRC, all of Medicare's agents recognize MASSIVE as the third party representing the law firm and plaintiff's interest.
Yes. MASSIVE can perform formal and informal eligibility checks to determine if your client is a Medicare beneficiary.
Congress passed the Medicare Secondary Payer Act (“MSP”) in 1980 as a cost-recovery measure designed to prevent Medicare from paying for medical care that should be paid by other insurance. In the case of personal injury lawsuits, this other insurance refers to the defendant’s liability insurance and not another medical insurance. This act makes Medicare “secondary” and the other insurance “primary.” Medicare will not pay for any medical care where “payment has been made or can reasonably be expected to be made” by primary plan. 42 U.S.C. §1395(b)(2)(A). This means Medicare will not pay where the care resulted from another person’s negligence and a lawsuit exists.
Medicare’s “Super Lien” arises where a primary plan is responsible for the payments, and Medicare makes conditional payments. These conditional payments are made where “a primary plan … has not made or cannot reasonably be expected to make payment with respect to such item or service promptly.”
Representatives for the Plaintiff must report to the Benefits Coordination and Recovery Contractor (BCRC) with information such as the Medicare number, injury, date of injury/loss, and other pertinent information. Later, they must submit certain authorization and proof of representation forms to the BCRC. Finally, a settlement should be immediately reported to Medicare’s BCRC. These duties arise out of 42 U.S.C. §1395(b)(2)(B)(ii), which states all parties to the lawsuit and their counsel, “shall reimburse [Medicare] for any payment … if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service.”
If Medicare is forced to initiate litigation to recover its conditional payments, the attorneys, the defense (the primary plan insurer), and even Medicare beneficiaries could be liable for up to double the amount of the conditional payments (see U.S. v Harris, N.D. W.Va., 2009). The attorney also has direct liability for reimbursement if Medicare’s lien is not fully satisfied.
Failure to pay a Medicare lien may cost the client his or her Medicare coverage and the Social Security Administration may offset benefits until a Medicare claim, and its interest, is satisfied. MASSIVE reduces your firm’s liability by advising firms on what to pay, to whom, within all deadlines.
Yes. MASSIVE will resolve hospital liens; however, we will not resolve the claim where the hospital has an unpaid bill, or the state in question does not have a statutory hospital lien structure.
Yes. MASSIVE will obtain and resolve both Short-Term Disability and Long-Term Disability Liens.
No. MASSIVE only resolves health insurance liens. We are able to obtain and resolve regular health insurance liens that are on or relating to Workers’ Compensation cases and/or their associated 3rd party/negligence cases. However, we do not obtain or resolve Workers’ Compensation carriers’ liens that are on 3rd party/negligence cases. Note that most of these carriers’ liens are statutorily protected and can only be reduced according to formula.