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Medical Liens from Government Payors

I’ve recently been describing the process of resolving medical liens when a personal injury case is settled.  There are some special considerations involved when the lien involves payments made by a federal (Medicare) or state (Medicaid, Mass Health Connector, Kayleigh Mulligan, etc.) program.

Liens asserted by government payors are automatically valid, even without notice to the patient or the attorney.  Because the right to subrogation is “based in … federal law,” see M.G.L. c.231, s.60G, the lien applies even in medical malpractice cases. (The state programs receiving federal funding, a condition of which is that the state seek reimbursement from responsible third parties, thus bringing them within the ambit of the “based in federal law” exception).

Medicare liens require a lot of patience and a long lead time.  Lawyers may submit an authorization to Medicare to receive access to a client’s Medicare account.  This will enable to lawyer to receive information about payments made on behalf of a client. The claim is first opened with a phone call to Medicare to provide identifying information.  Medicare then sends a form to be submitted together an authorization signed by the client, and will provide in itemization of amounts claimed in response to that submission. Updated lien amounts can take a month or more, and thus need to be requested well in advance of a mediation or trial.  The good news is that Medicare deducts its pro rata share of recovery costs (attorney’s fees and case expenses) as a matter of course, and will often make additional compromises.  The bad news is that it can take months to get final payment amounts.

Massachusetts state programs suffer from the opposite set of problems.  The Commonwealth’s Casualty Recovery Unit is readily accessible by phone, and usually quite responsive.  Again, the process begins with the submission of the Unit’s form and a signed client authorization, and ends a few weeks later withth receipt of an itemization of payments made for the beneficiary.  Unfortunately, Massachusetts does not automatically pay its share of costs and attorney’s fees, although the department will often consider a reduction, particularly where the settlement amount is limited by insurance coverage or liability concerns.  Once again, case law gives plaintiffs virtually no leverage in negotiating a compromise, see Whelan v. Division of  Medical Assistance, 44 Mass.App.Ct. 663 (1998) and Pierce v. Christmas Tree Shops, 429 Mass. 91 (1999).  The Unit will give updates by fax or email, often within hours.

Liability insurers are much more concerned about liens asserted by government payors than by private health insurers, because the applicable statutes can impose liability for repayment on insurers and attorneys if the lien is not satisfied at the time of settlement.  Thus, the plaintiff’s lawyer needs to prepare to address these concerns in advance of any settlement, in order to avoid delay in receipt of the client’s funds.


Medical Liens from Government Payors | Crowe & Mulvey, LLP