Below we list some Frequently Asked Questions regarding lien resolution – if you have additional questions please contact us.  We are happy to answer each question by email. Please note we may post your question and our answer to the Lien Blog; however, we will protect your identity.

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What obligations do parties have to report to Centers for Medicare and Medicaid Services (CMS) in a liability settlement?

Attorneys for Plaintiff must report to the Coordination of Benefits Contractor (COBC) with information such as the Medicare number, injury, date of injury/loss, and other pertinent information. Later, they must submit consent forms and proof of representation to the Medicare Secondary Payer Recovery Contractor (MSPRC). Then they should address any unrelated payments and dispute those payments. Finally, a settlement should be immediately reported to Medicare’s MSPRC.

What are my responsibilities as the plaintiff’s attorney in a pending claim situation?

You must report the case to the COBC You must report settlement to the MSPRC You must pay the final amount of the lien after the resolution process has been completed.

What happens if an attorney fails to make the appropriate payment to the government for the cost of the lien?

If Medicare is forced to initiate litigation to recover its conditional payments, the primary plan insurer and 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. In fact, Medicare’s agencies may seek double damages and interest against the attorney. Furthermore, failure to pay may cost the client his or her Medicare coverage and Social Security may offset benefits until a Medicare claim, and its interest, is satisfied.

Why do the Centers for Medicare and Medicaid Services (CMS) call their medical payment itemizations a Conditional Payment Letter?

Medicare only pays for treatment on a conditional basis, with the expectation for reimbursement. Medicare is statutorily the secondary payer, and is responsible only for paying amounts not covered by the primary insurance plan.

How can you determine what charges may or may not be related to the pertinent injury in the lawsuit?

You must review the medical history of the client and compare that to the (ICD-9) code sections used in the Conditional Payment Letter. Additionally, you should review the dates of the charges to see when the charges were made and by what entity. All of these factors affect the relatedness of Medicare payments to the lawsuit.

Does CMS make mistakes on Conditional Payment Letters?

Yes – all of the time. Sometimes these mistakes add up to thousands, or hundreds of thousands of dollars, so if you fail to submit an appeal or compromise in response to the Conditional Payment Letter, the client could end up with very little, or even no recovery, after the lien, costs, and attorney fees are paid. This kind of scenario does not bode well for your firm as your client stands to lose some or all of its settlement money to the government – while you still get your money.

Do the various government offices make changes to their internal practices without notifying the lien community?

Yes. Medicare’s contractors continue to change policies so that one day a submission may be proper, but the next day it could be rejected without notice. These offices (COBC, MSPRC, CMS) sometimes fail to send notices of missing documents to your attention. This oversight can cause undue delays to the processing of a lien. Some attorneys have experienced incidents where the MSPRC has lost an entire file after it had been initiated, leading to months of delays in the distribution of funds to a client. Constant attention to a lien file is the only way to avoid these delays.

What happens when a client fails to pay the final lien demand after settlement information has been furnished to Medicare?

Interest begins to accrue at a rate above ten percent per annum after the due date. Beyond that the case gets referred to the Treasury department for further collection efforts. If that is not successful there are private debt collectors assigned to the case. During this time interest is accruing and your client is losing money that could have been in their possession if the lien had been resolved timely. The attorney may be liable for a client’s nonpayment; it is illegal to disburse funds prior to reimbursing Medicare. Please all refer to number 3 above.

I want to settle the case – how do I know Medicare’s Final Lien?

Until recently you could not determine Medicare’s Final Lien until after settlement. Fortunately, President Obama signed the SMART Act on January 10, 2013 to help resolve this problem. Beginning in October 2013, the SMART Act creates a “Final Conditional” Lien process that can be requested through correspondence with the MSPRC. Be careful though – it is a difficult process that can be invalidated by various missteps

My case involves a No-Fault or Med-Pay component – what special rules does Medicare have for the case?

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. Second, it opens the Liability file, which refers toany lump-sum payment (settlement, judgment, etc.) regardless of whether it is from 1st party or 3rd party insurance. In order to obtain a Final Demand in the Liability case you must first get Medicare to close the No-Fault file. The easiest way to close the No-Fault file is by providing a letter from the insurer stating the benefits are exhausted. The two files will have different 15-digit Case ID numbers.

Will Medicare negotiate?

No, Medicare will not negotiate its Final Demand; fortunately, there are other methods for reducing a lien. Those methods include Appeals based on unrelated payments, Compromises with CMS, and Financial Hardship Waivers.

My client needs all of the settlement money, what can I do?

If your client is in dire financial circumstances a Financial Hardship Waiver might succeed. Keep in mind our use of the word “dire.” Waivers are not often granted. You will need the Social Security Administration’s Form 632-BK.

My client will need future care, do I have to create a Medicare Set-Aside (MSA)?

Maybe. Medicare’s agents seem to disagree on this topic. The MSPRC webpage states that MSAs are only required on Workers’ Compensation cases. CMS disagrees using its infamous memoranda. The analysis for an MSA should be performed on a case-by-case basis as there is no “one-size-fits-all” answer.

The defense will not pay until I handle the Medicare lien/The defense claims they must pay Medicare directly – what do I do?

This has been a debated issue since the Medicare, Medicaid, and SCHIP Extension Act was signed by President Bush in 2007. We suggest a two check system. Please refer to our blog for more information.

My case involves a wrongful death component, can I use that to my advantage in reducing the liens?

There is some case law that states Medicare is not entitled to wrongful death funds; however, Medicare will not quietly agree to such an allocation. More important, Benson v. Sebelius seems to state that you must never claim medical bills if you want the entire case to be qualified as wrongful death proceeds.

How long is the Medicare lien resolution process?

Medicare lien resolution can take between 3 months and 8 months for the average case. Some cases requiring appeals may take far longer. The best way to make Medicare lien resolution faster is to consistently follow-up with Medicare’s agents.

I’m not sure if my client has Medicare – is there a way to check Medicare eligibility?

Yes. We can perform formal and informal eligibility checks to determine if your client is a Medicare beneficiary.

Medicare’s demand is larger than the net settlement. Can they take all of my client’s money?

Technically, yes. 42 CFR 411.37 states that if the Medicare claim exceeds net settlement then Medicare’s Final Demand is equal to the net settlement. LRS is able to avoid this scenario.

Do I need Medicare approval to settle my case?

No. Medicare’s right is that of reimbursement. It does not have control over your case.

What is the easiest way to resolve a Medicare lien?

Lien Resolution Services, or another firm specializing in healthcare reimbursement matters, should be contacted to resolve any medical liens.