When is a Lien Valid?

Have you ever been nearing the end of a case and been suddenly blindsided by a lien? It can happen, but why? Are all liens valid?

Before diving into this topic, read our Lien Resolution 101 blog if you need a refresher on some of the terms we use.


When is a Lien Valid?

Liens are usually governed by a state lien act. If your state doesn’t have a lien act, you must look to state law for equitable doctrines that might allow a lien. It is difficult to write a concise blog post on true liens because the laws vary so much by state. The most likely reason a lien is valid is if you have notice of it prior to settlement. MASSIVE’s interactive Subrogation Map is a helpful tool for researching your state’s laws.


When is Subrogation Valid?

Subrogation is usually valid when a health plan language says it is valid. If the master plan and the summary plan disagree on subrogation further legal analysis will be needed. But your ignorance of subrogation does not mean the plan cannot come after settlement funds. In fact, most good subrogation provisions state that it is the beneficiary’s responsibility to report a lawsuit is underway. It is much easier to work with the insurance company in a reimbursement right than allow it to subrogate and join your case.


When is Reimbursement Valid?

Reimbursement rights work the same way as subrogation rights. Look at the plan language. Some states may also have common law rules for reimbursement. Just like subrogation, a well written health plan document will state that it is the beneficiary’s responsibility to inform the plan of a lawsuit.


When are Medicare Liens Valid?

Medicare liens are always valid. Medicare liens are not liens of course, but that’s what we all call them. You have a duty to report the existence of a case to Medicare. Do yourself (and your client) a favor. Make sure you always pay their Medicare liens. There are many examples of Medicare notifying the US Department of Justice when their liens have been ignored. The only limitation might be the statute of limitations (28 U.S.C. 2415) where Medicare has six (6) years and three (3) months from the settlement date to recover Medicare’s claim.


Many firms don’t plan for lien resolution as early as they could. If you are anticipating an upcoming settlement, have settled cases which you’d like to disburse, or simply have questions about lien resolution such as when or how to begin, please contact us and discover how MASSIVE can deliver exceptional results for you.