Managed Care or Medicare Advantage Organizations [MAOs] continue to expand their assertion of lien claims in personal injury cases. Here’s a now routine example:

    Difficult liability case with $135K in claimed Howell past meds [capitated plan that starts with a “K”]. Settlement for $350K and a very good result given the facts. Third Party Carrier [TPC] includes an indemnity/HH provision in the Settlement Agreement (SA) along with typical language that plaintiff is responsible for all CMS liens. Deal is done and money is in the bank. Recovery agent demands the $135K claiming they are a MAO and have the CMS super lien. Only when pressed will they agree to a reduction for procurement costs. They refuse to address other substantive complete and partial defenses, such as equitable apportionment, annual out of pocket maximums, lien amount calculation/RV, plan drafting faults, etc. When not paid, they hire counsel who makes a demand on the TPC under the SPA. Pay $135K in 60 days or we sue you under the SPA for double -$270K +  fees + costs. TPC tenders back to plaintiff under the SA. Plaintiff’s lawyer has a WTF just happened moment.

We have resolved several of these and have a handful in process. The best defense is targeted offensive strikes against the plan, the recovery agent and the TPC. The TPC’s are vulnerable and we have seen them kick in six figures to avoid litigating the issues when the indemnity claim may not be viable. Nothing like obtaining lien reduction by making the third-party carrier pay! While this is not always the result, we did just resolve a MAO lien demand of $334K for $25K – a result we were very pleased with.  

The key is identifying the lien as a MAO early on and working that into your settlement planning. 

The next stage in the MAO/SPA roll-out is for the MAOs to start claiming they have the same conditional payment rights concerning FUTURE meds as CMS. CMS is getting ready to roll out LMSA regulations and once they do, the MAO’s will follow right behind them.







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