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Exploring The Factors Affecting Medicare Lien Resolution Timelines

Written by Lucia Giglia, Case Manager |
Reviewed by Paul K. Isaac, Esq., ChSNC | Founder, Settlement Advisor |

According to the Medicare Secondary Payer (MSP) Act (42 U.S.C. § 1395y(b)(2)(A)(ii))), Medicare has a right of reimbursement for the cost of accident-related medical treatment paid on behalf of a Medicare eligible injury victim who receives a settlement, judgment, or award from the defendant third-party responsible for the injuries, or their insurer.

If such right of reimbursement is not paid timely, Medicare can also assess monthly interest charges on unpaid debts if payment isn’t received within 60 days of the Benefit Coordination and Recovery Contractor (‘BCRC’) issuing its Final Demand letter, per 42 U.S.C. § 1395y(b)(2)(B)(ii).

In the event of non-payment, Medicare may file a lawsuit against the defendant, the plaintiff, or the plaintiff’s counsel, to satisfy the debt. According to 42 U.S.C. § 1395y(b)(2)(B)(iii), Medicare has the right to pursue a cause of action for ‘double damages,’ or double the amount owed. If not repaid, such debt is treated as a debt to the United States, and the US Department of the Treasury may collect the debt by automatic garnishment of Social Security benefits for overdue payments.

With so much at stake, you may be interested in better understanding the Medicare recovery process and timelines to lien resolution.

How long does it take to resolve a Medicare lien?

The amount of time needed to resolve a Medicare lien and the exact steps involved depend on a variety of case-specific details and procedural factors. While the process has been standardized in recent years, inefficiencies and human error can significantly delay the resolution process.

If attempts to remove medical charges the beneficiary believes shouldn’t be included in Medicare’s Final Lien Amount are rejected, the decision can be appealed. The appeals process can add a significant amount of time to the lien resolution process depending on whether the beneficiary utilizes all three levels of appeal.

While no two cases are exactly alike, a recent lien resolution case successfully resolved by Precision Resolution Case Manager Lucia Giglia offers one example of how a Medicare lien case can progress. Learn how Lucia was able to reduce the lien by 65% by reading the case overview provided at the bottom of this article.

Or, to better understand each individual step of the lien resolution process as it relates to a possible timeline to lien resolution in your case as a personal injury attorney or plaintiff, check out the following Q & A.

Questions to ask when determining how long it will to resolve a Medicare lien

Is the Plaintiff part of Medicare’s Part A or B plan?

Plaintiff attorneys should be mindful that Medicare, a federal healthcare program, isn’t limited to individuals aged 65 and above; it’s also accessible to certain younger individuals on Social Security disability, and with other health concerns. Attorneys should always obtain a plaintiff’s full insurance information early in any personal injury case to gain the complete scope of the plaintiff’s possible healthcare related liabilities.

Did Medicare make conditional payments on behalf of the plaintiff for injury treatment?

(42 U.S.C. § 1395y(b).), establishes Medicare as a secondary payer to other forms of health insurance Medicare stipulates that conditional payments must be repaid and the Medicare trust fund reimbursed should the plaintiff receive compensation for their injuries in the form of a settlement, judgment, award, or other payment. Medicare’s right to reimbursement for conditional payments using a lien on settlement proceeds therefore only occurs in the event a settlement is awarded. If settlement negotiations fail and an injury victim loses their case, they are not responsible for reimbursing conditional payments.

Was the personal injury case reported to BCRC?

It is recommended that an attorney or plaintiff notify the BCRC of the litigation against a third-party defendant case shortly after pursuing the liability case. To discuss the case with, or receive benefits-related correspondence from the BCRC, you must complete and return consent to release and/or proof of representation forms.

After a case is reported, attorneys and their Medicare beneficiary clients receive a Rights and Responsibility Letter, followed by a Conditional Payment Letter (‘CPL’) with an “interim amount” (preliminary repayment demand) generated within 65 days.

Are you disputing the lien amount?

After performing a search for all conditional payments made on the beneficiaries’ behalf, the BCRC issues its Conditional Payment Letter including a Payment Summary form itemizing the charges it paid on behalf of the beneficiary from the date of injury through the last known date of treatment. This is considered an “interm amount” and is subject to change if the BCRC is notified of new or previously unreported Medicare payments absent from the current CPL.

There are no formal timelines for disputing CPLs but failing to respond could cause delays in the corresponding personal injury case. If the beneficiary does not intend to dispute charges listed in the Payment Summary Form, and the case has settled, they can request a Final Demand Amount from the BCRC. The Final Demand typically arrives 30-45 days after it’s requested.

If the beneficiary decides to dispute charges listed in the CPL, they provide a written response detailing which charges are unrelated to the personal injury case and should be removed. It takes approximately 30 days for the BCRC to review a dispute. Each time charges are disputed, the BCRC will issue a new CPL. The BCRC will remove charges from the new CPL it agrees are unrelated to the primary injury. An unchanged CPL indicates the BCRC has denied your request. Medicare does not produce Final Demand Letters until it has completed its review of disputes and the plaintiff or their attorney requests it, by providing settlement figures.

Was a Final Lien Demand issued?

When a settlement agreement is reached, responsible parties are required to report it the BCRC within 60 days. Once settlement details are reported, including the anticipated date of settlement or other payment, the BCRC will identify any new, related claims that have been paid on behalf of the plaintiff since the last time the CPL was issued up to and including the settlement date. Once this process is complete, the BCRC will issue a Final Demand Amount indicating amount the beneficiary must repay to Medicare. The Final Demand Amount is provided approximately 30-45 days from the date of request once the information is received and processed.

The final demand amount must be repaid within 60 days to avoid accruing interest. Once the Final Demand is paid in full, a closure letter indicating the debt to Medicare has been satisfied can be expected within one to two weeks.

Will the lien case be appealed?

Beneficiaries have the right to a review of Medicare’s final determination by independent authorities as part of a formal appeals process examining whether the BCRC was right to keep any disputed charges in their Final Demand Amount. Beneficiaries have 120 days from the date of the Final Demand letter to submit a notice of appeal. The appeals process can vary in length depending on how far it is pursued. There are five levels of appeal: Redetermination (120 days to file), Reconsideration (120 days to file), ALJ hearing (60 days to file), Medicare Appeals Council Review (60 days to file), and U.S. District Court review.

Proceeding through all five levels of appeal could take the beneficiary upwards of a year or more from the date of the initial Redetermination hearing to a review by a federal court. Rulings made in appeal are considered legally binding, and the BCRC is legally bound to adjust the lien amount should an appeal be successful.

Lucia’s Medicare Lien Case

A 100-year-old skilled nursing facility resident was harmed following an incident involving staff negligence in 2022. Lucia’s initial efforts to dispute medical charges she believed were wrongly included in Medicare’s Final Demand Amount were denied by the BCRC. Lucia wasted no time preparing to advance her case to avoid missing the deadline to request an appeal. She leveraged the legal acumen of Precision Resolution’s Senior Lien Attorney, Paul Loudenslager, Esq., to compile additional materials supporting her arguments prior to commencing an appeals process that ended with a hearing in front of an Administrative Law Judge (ALJ).

Lien Resolution Strategies

Lucia determined that the unrelated Medicare charges included in the original lien calculation were incurred for care the victim would have received regardless of the nursing home injury underlying the primary cause of action in the personal injury case. Her approach required a deep understanding of Medicare’s processes and procedures, and with it, Lucia successfully navigated the complexities of the case, eventually receiving a favorable appeal by the ALJ.

Lucia’s expertise helps her attorney clients avoid the frustrations caused by common lien-related case roadblocks, such as faulty Section 111 reporting and surprise Final Demand amounts, to maximize settlement proceeds and close more cases.

The experience Lucia gained successfully appealing Medicare’s final determination in this case will add to how Lucia and Precision Resolution serve attorneys in single-event ERISA, Medicare, Medicaid, and private insurance lien cases in New York and beyond.