Defense Verdict in Medicare Lien Dispute for Insurance Carrier

We successfully defended a Massachusetts-based insurance company in a bitter dispute with the federal government regarding a Medicare conditional lien request. The insurance carrier’s satellite office is based out of New Jersey, and the underlying claim involved an injury sustained in a motor vehicle accident with payments being made to the claimant under a New Jersey PIP policy. The carrier exhausted the PIP policy following the injury. Medicare also paid significant medical bills for the claimant and demanded through the Center for Medicare and Medicaid Services (CMS) that the carrier reimburse all payments made as a conditional lien request. CMS, through their many contractors, threatened legal action with double damages if the lien was not satisfied. The carrier appealed the lien request through two levels of CMS contactors with no success. We formulated a third-level appeal to an administrative law judge, arguing that CMS’s request for additional liens violated state PIP policy law and the carrier’s constitutional rights. Evidence presented showed the PIP policy had been exhausted and, thus, the carrier reverted back to a secondary payer, forcing Medicare/CMS as the primary payer under federal law. The court agreed and a full defense verdict was issued.