LIENS
Welcome to Synergy’s blog page dedicated to the topic of lien resolution. Our team of subrogation experts share their InSights and knowledge on the latest developments and best practices in lien resolution. Stay up-to-date with the latest trends and strategies to ensure that you have the information you need to navigate the complexities of lien resolution.
Personal injury law firms live in the courtroom. Their core focus is proving causation, liability, and damages not negotiating with Medicare, ERISA plans, or hospital billing departments. Yet, as every law firm knows, cases don’t truly end at settlement. They end when liens are resolved, and final disbursement is made.
And here lies the dilemma: lien resolution is time-consuming, highly technical, and fraught with risk. Increasingly, law firms turn to outsourcing as a solution. But the question many lawyers ask is, is it ethical to outsource lien resolution?
The answer is yes, when done correctly.
Ethics Matter in Outsourcing
Outsourcing lien resolution isn’t just a business decision. It’s a professional responsibility decision. Mishandling liens can expose clients to ongoing claims, delay disbursement, or even trigger penalties such as Medicare’s double damages provision. Worse, it can expose the attorney to malpractice risk.
The ABA and state bar associations recognize that outsourcing is both permissible and often beneficial, so long as lawyers follow specific ethical safeguards.
ABA Guidance on Outsourcing
ABA Formal Ethics Opinion 08-451 provides clear direction: lawyers may outsource legal and non-legal support services, but they retain ultimate responsibility. That means:
- Supervision: Attorneys must oversee outsourced lien resolution work and ensure it meets professional standards.
- Confidentiality: Client information must remain protected, just as if it were handled in-house.
- Reasonableness of Fees: Costs must be transparent, reasonable, and disclosed to the client.
In short, outsourcing requires active oversight to ensure compliance with ethical obligations.
State-Specific Ethical Rules
Many states echo the ABA’s position, often adding their own guidance:
- New York allows outsourcing as long as fees are disclosed and result in a net client benefit.
- Ohio and Utah emphasize obtaining informed client consent and ensuring costs are both reasonable and transparent.
This growing consensus makes it clear: outsourcing is not only permissible but also practical, provided ethical safeguards are followed.
Ethical Outsourcing Benefits Clients
At its core, outsourcing lien resolution ethically is about client protection. Done properly, it:
- Maximizes Client Recovery by ensuring liens are challenged, audited, and negotiated effectively.
- Reduces Risk by avoiding errors that could trigger legal or financial exposure for both client and attorney.
- Enhances Trust by giving clients confidence that every dollar possible is preserved in their recovery.
Final Thought
Trial lawyers shouldn’t hesitate to bring in lien resolution experts, so long as they do so ethically. By supervising outsourced work, securing client consent, and partnering with trusted providers, firms can meet their professional obligations while achieving better results for their clients.
At Synergy, ethical lien resolution is at the heart of what we do. We partner with trial lawyers nationwide to reduce risk, improve client outcomes, and protect the integrity of every settlement we are involved in.
Written by: By Jason D. Lazarus, J.D., LL.M., MSCC | Founder & Chairman of Synergy | Founder of Special Needs Law Firm | Author of Amazon Best Sellers – Art of Settlement & Litigation to Life | Host of Trial Lawyer View by Synergy Podcast | Peak Practice by Synergy Curator
In our previous blog, we tackled the Medicare conditional payment resolution process. However, if your client, during treatment for their injuries, switched to a Medicare Advantage Plan (MAO-Part C), the resolution process might not be over. Here’s why: While you may have resolved conditional payments with Medicare Parts A and B (traditional Medicare), MAO plans operate independently and may have covered some or all of your client’s medical expenses.
The issue arises because MAO plans are distinct from traditional Medicare, and beneficiaries can enroll in them during specific periods. Consequently, even if you resolved Medicare conditional payments, an MAO might have stepped in later, without your knowledge. CMS will not notify you about these MAO payments, and beneficiaries often lack clarity on their coverage types so it can easily be missed.
To verify MAO plan coverage, clients can check their status on MyMedicare.gov. Additionally, the 2020 PAID Act requires CMS to report MAO enrollments for the past three years, though access to this data is limited to Non-Group Health Plan Responsible Reporting Entities (RREs). You might need to request this information from the defense or painstakingly review medical bills to uncover potential MAO liens.
Attorneys must be vigilant, conducting thorough due diligence to uncover possible MAO liens. Failure to address these could result in double damages, as MAOs do enforce their reimbursement rights aggressively. The Medicare Secondary Payer Act grants MAOs the right to sue for double the lien amount if not repaid, a risk highlighted by cases like Humana v. Western Heritage Ins. Co. Here, Humana successfully claimed double damages after Western Heritage failed to reimburse a $191,000 lien.
To prevent such pitfalls, start your investigation early upon client intake, continue throughout representation, and finalize it before disbursing settlement funds. Identify any MAO liens and seek reduction or compromise as appropriate. Understanding and managing MAO liens is crucial to safeguarding your firm against significant financial exposure for this hidden lien.
Working with specialized lien resolution companies can provide essential expertise and prevent costly mistakes when it comes to Medicare Advantage plan liens. If you want to find out more, contact us today to Partner with Synergy for lien resolution.
Written by: By Jason D. Lazarus, J.D., LL.M., MSCC | Founder & Chairman of Synergy | Founder of Special Needs Law Firm | Author of Amazon Best Sellers – Art of Settlement & Litigation to Life | Host of Trial Lawyer View by Synergy Podcast | Peak Practice by Synergy Curator
Personal injury firms excel at what they were built to do: securing justice by proving liability, telling their client’s story, and getting the best possible settlement or verdict. Yet once the dust settles, another challenge arises, resolving liens.
Here’s the hard truth: lien resolution, while critical, is not a law firm’s core competency. And that reality carries real costs for firms that try to manage it in-house.
The Problem with Keeping Lien Resolution In-House
Handling liens requires a completely different skill set than litigating cases. Instead of cross-examining witnesses or preparing exhibits, lawyers and staff must wade through:
- Complex regulations governing Medicare, Medicaid, ERISA, FEHBA, and private health plans.
- Deal with aggressive recovery contractors like Rawlings, Equian, Optum, and Conduent—organizations whose sole job is to extract repayment from settlements.
- Time-consuming negotiations and audits to dispute unrelated charges and reduce repayment obligations.
This is not advocacy in the courtroom. It is administrative, regulatory, and negotiation-heavy work. And every hour spent on it is an hour taken away from moving existing or new cases toward resolution.
The Cost
When law firms try to resolve liens internally, they often pay the price in three ways:
- Lost Time – Staff and attorneys bogged down in lien disputes can’t focus on case strategy or trial preparation.
- Financial Risk – Missteps with Medicare or Medicaid can result in penalties, interest, or even double damages against the firm.
- Diminished Client Outcomes – Overpaying liens or failing to challenge invalid claims directly reduces a client’s net recovery and client satisfaction.
In short, doing lien resolution in-house diverts resources from your true strength: client advocacy and the pursuit of justice for those who are injured.
Why Outsourcing Is a Strategic Advantage
Outsourcing lien resolution isn’t about passing off busywork. It’s about recognizing that lien resolution is a specialized discipline requiring expertise, focus, and leverage.
- Deep Expertise: Lien resolution professionals live and breathe this work. They know the nuances of ERISA reimbursement provisions, Medicare conditional payments, and Medicaid state-specific rules.
- Leveling the Playing Field: Recovery vendors are massive corporations with teams dedicated to enforcing liens. Outsourcing ensures your client has equally sophisticated representation on their side.
- Better Financial Outcomes: Specialists know how to audit, negotiate, and challenge overreaching claims, often securing significant reductions for injury victims.
- Efficiency: By removing lien resolution from your team’s workload, you free up resources to focus on litigation and client service—the heart of your practice.
The Ethical Considerations
It’s not just about efficiency. ABA Model Rule 1.15 makes it clear: lawyers must protect third-party claims on settlement funds. That means missing a lien or paying one improperly isn’t just risky; it could be an ethical violation. Outsourcing to experts helps ensure compliance while safeguarding your firm’s reputation.
Conclusion
Trial lawyers already outsource to other experts in certain areas of their practices. Lien resolution is similar since it is not your firm’s core competency and treating it as such can be costly. By outsourcing to trusted experts, you not only protect your clients’ recoveries but also protect your practice from liability, inefficiency, and reputational harm.
At Synergy, lien resolution is what we do, day in and day out. Let us handle the complexity so you can get back to doing what you do best: winning cases and serving your clients.
Written by: By Jason D. Lazarus, J.D., LL.M., MSCC | Founder & Chairman of Synergy | Founder of Special Needs Law Firm | Author of Amazon Best Sellers – Art of Settlement & Litigation to Life | Host of Trial Lawyer View by Synergy Podcast | Peak Practice by Synergy Curator
Correctly navigating Medicare’s conditional payment resolution process is critical for personal injury attorneys, given the complex legal framework and the substantial risks involved in failure to reimburse. Under the Medicare Secondary Payer Act (MSPA), the Centers for Medicare & Medicaid Services (CMS) have broad powers to recover payments made on behalf of Medicare beneficiaries, including the right to sue trial attorneys directly. Failing to address Medicare’s reimbursement claims correctly can lead to severe financial and legal consequences for personal injury law firms.
MSPA: The Legal Framework
CMS can recover conditional payments from any entity that touches settlement dollars which are meant to reimburse medical expenses, including attorneys who handle personal injury settlements. The case of U.S. v. Harris starkly illustrates the potential pitfalls. In this case, a personal injury attorney was held liable for Medicare’s conditional payments despite settling a claim and notifying Medicare. The court ruled against the attorney, emphasizing that CMS’s rights under 42 U.S.C. § 1395y(b)(2) extend to recovering from entities that have received payments from primary plans, a personal injury law attorney.
A Labyrinth: The Medicare Resolution Process
Resolving Medicare’s conditional payments involves several steps:
- Initial Reporting: Contact the Benefits Coordination & Recovery Contractor (BCRC) before settlement to obtain a Conditional Payment Letter (CPL). This letter is preliminary and should be audited to remove unrelated care.
- Final Demand: After settlement, Medicare must be informed, and a Final Demand will then be issued. Payment must be made within 60 days to avoid interest accumulation and potential enforcement actions by the DOJ.
Mistakes to Avoid: Common Pitfalls
There are some common mistakes made by personal injury law firms when it comes to conditional payments. These mistakes can be costly, and it is best to avoid them:
- Relying on Conditional Payment Letters: Conditional Payment Letters are not final. Only a Final Demand Letter from Medicare confirms the amount due and is binding. Relying on preliminary figures can lead to significant shortfalls and legal issues, as evidenced by a 2019 case where a Maryland law firm settled a claim which was based upon reliance on incorrect figures in a Conditional Payment Letter.
- Improper Resolution Channels: Using incorrect methods to resolve conditional payments, such as state court proceedings instead of the required administrative processes, can result in severe repercussions, as seen in a Texas case where a state court ruling was sought to reduce what was owed to Medicare which wasn’t effective. Instead, the trial attorney was sued by the government for failure to properly reimburse Medicare.
Reducing What is Owed: Appeals, Compromises, and Waivers
When dealing with Medicare’s repayment formula, attorneys face a rigid calculation per the applicable regulation. The calculated repayment amount often doesn’t account for case-specific details impacting the recovery such as liability issues or policy limits. To address this fact, attorneys can:
- Appeal: Navigate through Medicare’s multi-level internal appeal process, which is lengthy, and interest accrues during the appeal.
- Request Compromise/Waiver: After paying the Final Demand, attorneys can request a compromise or waiver, potentially leading to a refund. Requests can be made under:
- Section 1870(c): Financial hardship waiver.
- Section 1862(b): Best interest of the program waiver.
- Federal Claims Collection Act: General compromise request.
Conclusion
Effective resolution of Medicare conditional payments requires diligence and adherence to proper processes prescribed by Medicare. Attorneys should avoid relying on preliminary figures, ensure timely and accurate reporting, and use appropriate channels for appeals or compromise/waiver requests. Understanding and navigating Medicare’s complex requirements is crucial to safeguarding against personal liability and ensuring successful settlement outcomes.
Working with specialized lien resolution companies can provide essential expertise and prevent costly mistakes when it comes to Medicare conditional payments. If you want to find out more, contact us today to Partner with Synergy for lien resolution.
Written by: By Jason D. Lazarus, J.D., LL.M., MSCC | Founder & Chairman of Synergy | Founder of Special Needs Law Firm | Author of Amazon Best Sellers – Art of Settlement & Litigation to Life | Host of Trial Lawyer View by Synergy Podcast | Peak Practice by Synergy Curator
When a hard-fought personal injury case is resolved, trial lawyers and their clients often breathe a sigh of relief. The hard work is over or so it seems. But lurking beneath the surface of every settlement is a potential minefield: unresolved healthcare liens. This “post-resolution lien chaos” can negatively impact even the most favorable outcomes, leading to financial, ethical, and professional consequences that causes an impact long after the case is closed.
What Is Post-Resolution Lien Chaos?
Post-resolution lien chaos occurs when liens—Medicare, Medicaid, ERISA, FEHBA, military, hospital, or private health plans—are not properly identified, negotiated, and resolved. At first, it may look like a small administrative issue. In reality, it can mushroom into:
- Delayed client disbursements that frustrate injury victims.
- Unexpected repayment demands from aggressive recovery contractors or government agencies.
- Double damages and lawsuits, especially in cases involving Medicare conditional payments or Part C plan liens.
- Reputational harm to the lawyer, whose client expected finality, not protracted disputes with lien holders.
In other words, unresolved liens don’t just threaten client recoveries—they threaten your practice.
Why This Matters More Than Ever
Healthcare reimbursement systems grow more complex each year. As the RAND Institute found, liens are increasingly common and burdensome, particularly in mass tort litigation and Medicare cases. CMS, Medicaid agencies, ERISA plans, and hospital providers are all more aggressive than ever in enforcing reimbursement rights.
The consequences of ignoring or mishandling liens can be severe:
- Financial Exposure: Improper handling of Medicare conditional payments or Part C plan liens can result in personal liability and double damages.
- Ethical Duties: ABA Model Rule 1.15 makes it clear—lawyers must safeguard third-party claims and cannot simply release disputed funds.
- Client Harm: Every dollar paid unnecessarily to a lien holder reduces your client’s net recovery, undermining the very purpose of the litigation.
The True Cost to Trial Lawyers
Many firms underestimate the drain lien resolution creates. Hours spent negotiating with recovery vendors, auditing medical charges, or disputing Medicare demands often eat into a firm’s bottom line. Worse, if something is missed, post-resolution disputes can pull the lawyer back into a case they thought was finished—sometimes years later.
The reality? A mistake made with liens does not just cost a client money; it costs law firms efficiency, profitability, and peace of mind.
Preventing Post-Resolution Chaos
Avoiding lien chaos is about expertise and timing. Best practices include:
- Early Identification: Begin lien investigation as soon as the case is opened, not after settlement discussions start.
- Accurate Validation: Confirm the legal validity of every asserted lien; not every claim is enforceable.
- Strategic Negotiation: Leverage knowledge of ERISA, Medicaid, Medicare, and state-specific lien law to minimize repayment demands.
- Consider Outsourcing: For many firms, partnering with a lien resolution expert eliminates liability, reduces internal costs, and ensures clients receive the maximum net recovery.
Final Thought
Resolution should bring closure, not new battles. Law firms who treat lien resolution as an afterthought risk exposing both themselves and their clients to costly, time-consuming chaos. On the other hand, those who prioritize lien resolution as a core part of case strategy safeguard client recoveries, uphold their ethical obligations, and protect their own practice from unnecessary risk.
At Synergy, we help trial lawyers resolve liens the right way. So when the case ends, it truly is completely over.
Written by: By Jason D. Lazarus, J.D., LL.M., MSCC | Founder & Chairman of Synergy | Founder of Special Needs Law Firm | Author of Amazon Best Sellers – Art of Settlement & Litigation to Life | Host of Trial Lawyer View by Synergy Podcast | Peak Practice by Synergy Curator
When personal injury lawyers hear ERISA, they may think of “troubling” case law like McCutchen. But what is most important when it comes to resolution of an ERISA lien? ERISA plan language! And depending on the plan language, McCutchen may actually be “troubling” to the ERISA plan. And help the injured client! That is the secret battlefield in lien resolution and ignoring it can cost your client dollars in net recovery and your own practice both time as well as money.
At Synergy, we’ve resolved thousands of ERISA liens and we have learned that winning or losing often comes down to one thing: what’s in the plan contract.
What Is ERISA and Why Should You Care?
The Employee Retirement Income Security Act of 1974 (ERISA) governs most employer-sponsored health plans. These plans often contain subrogation and reimbursement provisions that trigger when a participant receives a personal injury settlement.
Unlike government programs like Medicare or Medicaid, ERISA plans are contractual beasts. Their rights live and die by the language of the plan document. And thanks to Supreme Court decisions like Sereboff and McCutchen, we know this: the plan language rules all.
That means if the Plan disavows equitable defenses like the “made whole” doctrine or “common fund”, and most savvy plans now do, it doesn’t matter how unfair the reimbursement seems. If it’s in writing and properly drafted, it’s enforceable as written. This doesn’t mean they can’t reduce, it just means they don’t have to reduce.
The Crucial Questions You Must Ask
Before you even start negotiating, get answers to these:
- Is it a self-funded or fully insured ERISA plan? (Preemption only applies to self funded plans.)
- Do you have the Master Plan Document (MPD) or just a Summary Plan Description (SPD)? (Hint: You need the MPD per the Cigna v Amara case.)
- What does the Plan say about reimbursement rights, scope, and exclusions?
- Does the Plan incorporate or waive any equitable doctrines?
The Power (and Peril) of Plan Language
Too often, law firms take what the recovery vendor tells them at face value. But the vendor isn’t the plan and the documents they have are probably most favorable to them collecting in full. And they’re banking on you not asking for the full plan language. That’s where Synergy comes in.
Our lien experts routinely uncover language that reduces or eliminates repayment obligations. In one recent case, we got a complete waiver based solely on flawed plan language saving the client a substantial portion of their net recovery.
Why Trial Lawyers Shouldn’t Go It Alone
Dealing with ERISA liens means you’re not just negotiating; you’re interpreting contracts that have federal supremacy, involve preemption, and are backed by aggressive recovery contractors. This isn’t a fair fight unless you bring your own heavy artillery.
At Synergy, we know where the pressure points are. We know which plans are bluffing (not providing proper documentation) and which have the leverage. And we don’t resolve an ERISA lien without reviewing the plan documents given their importance.
Final Word: It’s Not Just Legal—It’s Strategic
Understanding ERISA plan language isn’t just about compliance; it’s about advocacy. When you master the document, you control the negotiations. When you outsource to experts who completely understand this space, you protect your client and your firm.
Ready to fight smarter? Contact Synergy to learn how our ERISA lien resolution team can help you preserve your client’s recovery—and your sanity.
Written by: Teresa Kenyon, Esq. | Vice President of Lien Resolution Services
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