Managed Care or Medicare Advantage Organizations (MAOs) Continue to Expand Their Assertion of Lien Claims in Personal Injury Cases.

Managed Care or Medicare Advantage Organizations (MAOs) Continue to Expand Their Assertion of Lien Claims in Personal Injury Cases.

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Here’s a now-routine example:

A difficult liability case involving $135,000 in claimed Howell past medicals—through a capitated plan that starts with a “K”. The case settles for $350,000, which is a strong result given the facts. The third-party carrier (TPC) includes an indemnity/hold harmless provision in the settlement agreement, along with standard language holding the plaintiff responsible for all CMS liens. The deal is done, the money is in the bank.

Then comes the hit.

A recovery agent demands the full $135,000, claiming Medicare Advantage Organization (MAO) status and asserting the CMS “super lien.” Only when pressed will they agree to reduce the demand by procurement costs. They refuse to entertain any other substantive defenses—no discussion of equitable apportionment, annual out-of-pocket maximums, lien calculation errors, or even plan drafting flaws.

When not paid promptly, the recovery agent refers the matter to counsel, who issues a demand letter to the TPC under the Medicare Secondary Payer Act (MSPA): pay the full $135,000 within 60 days—or we sue you for double damages ($270,000) plus attorneys’ fees and costs. The TPC, in turn, tenders the issue back to the plaintiff under the settlement agreement’s indemnity provision.

At this point, plaintiff’s counsel understandably has a WTF-just-happened moment.

We’ve resolved several of these and currently have a handful in process. The best defense? A targeted offensive strike—against the plan, the recovery agent, and the TPC. The third-party carriers are not untouchable. In fact, we’ve seen them contribute six figures to avoid litigating indemnity obligations that may not even be enforceable. Nothing like a lien reduction strategy that ends with the TPC writing the check.

While not every case has this result, we recently resolved a MAO lien demand of $334,000 for just $25,000—an outcome we were extremely pleased with.

The key takeaway? Identify the lien as an MAO early, and weave that into your settlement planning. Recognizing the true nature of the claim before the settlement agreement is signed allows you to anticipate the threat and mitigate the risk.

Explore More Resources with Lien Project Network

For a deeper dive into lien resolution strategies, settlement planning, and reimbursement challenges, explore our educational modules. Lien Project Network serves as a trusted resource for plaintiff attorneys, providing insights on financial planning, public benefits, and structured settlements in the context of lien management.

Need Assistance? Work With The Lien Project, PC

If you need expert legal assistance in navigating lien resolution, reimbursement claims, or settlement planning, our team at The Lien Project, PC is ready to help. As an LPN member, you earn credits that can be applied toward lien reduction and resolution services provided by The Lien Project, PC—allowing you to offset up to $900 per year. Your investment in continuing education through Lien Project Network not only enhances your lien resolution skills but also reduces the cost of engaging legal experts when needed.

Schedule a Consult today to see how we can help maximize your client’s recovery.