Navigating Health Insurance in Lien Resolution

7/12/2019 9:00:00 AM


For some of the most experienced personal injury and mass tort attorneys, liens are often the last obstacle to claimants receiving their settlement funds. In the world of personal injury and mass tort matters, a medical lien is a demand for repayment placed against a claimant for related medical expenses paid by their health insurance.   

Medicare Parts A and B

Medicare is the federal health insurance benefit program for persons who are 65 or older, people with disabilities, and those who have been specifically diagnosed with permanent kidney failure. Medicare is segmented into four parts (Part A: hospital insurance, Part B: medical insurance, Part C: Medicare Advantage, and Part D: prescription drug coverage) and is often the initial payer of claimant medical expenses.

What distinguishes Medicare from other health care insurers when distributing settlement funds are the federal regulations allowing Medicare subrogation rights to be superior to any other interest on a settlement. Medicare’s priority right to recover arises under § 1862 (b) of the Social Security Act, which is even stronger than the subrogated right, as it takes precedence over the claims of any other party. Oftentimes, attorneys will contract a lien resolution settlement provider to work on behalf of the claimant to verify whether each claimant is a recipient of federal Medicare, audit each reimbursement claim, and apply the agreed upon resolution methodology to satisfy all obligations.

State Medicaid

Medicaid is a joint federal-state program that provides health care coverage to certain categories of individuals. Injured claimants in mass tort cases encounter challenges when Medicaid has made conditional payments for medical services related to an injury, and then assert a lien for recovery from the beneficiary’s settlement award.

Each state Medicaid agency has its own set of right to recovery laws and regulations. It is important for the parties administrating the lien resolution to be well versed in those individual state laws and provide accurate assessments of Medicaid’s right to recover. Doing so allows for efficient communication between all parties and allows for timely distribution of settlement funds.

Private Insurers, including Medicare Advantage (Part C)

Private health insurance coverage continues to be more prevalent than government health insurance coverage. According to a 2018 census report, 67.2 percent of Americans had private coverage, with employer-based insurance representing 56 percent of that population.   

Many claimants will have private, employer-based insurance coverage in the form of an HMO or PPO, including Medicare Advantage Plans also known as Medicare Part C, and as such, private healthcare insurers may have a right to reimbursement.

It is important to review plan’s right to recover, determine the lien holder’s interest, and plan a course of action for each reimbursement claim. Depending on the number of claimants involved in the settlement, a Private Lien Resolution Program may be established to resolve potential liens without having to individually reach out to each private health plan.

Military and Other Healthcare

There are many other types of health plans that may have provided coverage to the injured party such as: TRICARE, Department of Veterans Affairs (VA), Indian Health Services, (IHS), FEHB plans (federal and/or State plans), and Charity plans.

As healthcare insurers, these plans may also have a right to reimbursement if they paid for treatment related to a claimant’s settlement. In this case, the first steps to addressing these liens are to determine the claimant’s obligation to notify these health plans, review and assess the insurance plan’s right to recover, and establish the lien holder’s interest. If it is found that a right to reimbursement exists, these subsequent liens will also need to be resolved.

Navigating the Lien Resolution Process

The process of addressing and resolving liens through Medicare, Medicaid, Private/ERISA, Military and other lien resolution is daunting, and best managed by practiced consultants who routinely work with law firms and corporate entities to preserve and address all debts.

JND’s dedicated Lien Resolution team marshals industry best services, strong analytical methodology, and deep expertise in lien resolution. We create global and non-global solutions that ensure recovery compliance, satisfy all reimbursement obligations, and can meet MMSEA Mandatory Insurer Reporting requirements. Our goal is to ensure that all reimbursement interests are properly identified, analyzed, and resolved so that settlement funds are confidentially distributed. Contact us to learn more.

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