Private Liens: Reading Plan Language

Medicare liens are the same process and based on the same laws no matter where you are. Private liens? There are tens of thousands of different plans based on different laws and different contracts – or plan language. If you know how to read that language, you will save yourself incredible amounts of time.


Before you read the plan, your location matters. There are eight true anti-subrogation states: Arizona, Connecticut, Kansas, Missouri, New Jersey, New York, North Carolina, and Virginia. Then, Georgia has codified the Made Whole Doctrine to the point where it is nearly an anti-subrogation state too. These states do not allow health insurance liens unless federal law preempts their state law (think of Medicare, ERISA, FEHBA, and Medicaid, among others). Similarly, eight states are non-equity states, requiring specific plan language. Those non-equity states are Illinois, Louisiana, Maine, Michigan, New Hampshire, Ohio, South Carolina, and in certain situations, Massachusetts.


It is important to look for and review plan language – even in anti-subrogation states. Why? Again – federal laws can preempt, or overrule, state laws. So you need to know how to determine which laws apply. Then, finally, you can get to the point of reading the plan language.


First, look for two terms: subrogation and reimbursement. These mean different things. And the term “lien” generally isn’t used. Generally, both subrogation and reimbursement clauses will start by discussing when they apply. For example, “if a judgment or settlement is received by the injured person…” Then, the clause will continue with how much must be repaid, and, what exceptions exist. Those excepts could be the Common Fund Doctrine, stating that the repayment will be reduced by your attorneys’ fees and expenses. Or, that the Made Whole Doctrine applies and limits the payment back to the insurer if the plaintiff is not made whole (returned to pre-negligence level of health, finances) by the settlement.


Contact the experts at MASSIVE at 833-466-2774 or [email protected] if your firm needs help with understanding the intricacies of plan language.


MASSIVE’s COO, Ryan Weiner, Esq. will present on this topic – “How to Read Plan Language” at the 2021 WILG Annual Convention at 8:00 a.m. EST on Tuesday, 9/28. Be sure to register so you don’t miss out!