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Subrogation Checklist for Injury Cases

I recently asked a very important question on my Instagram stories (@ParalegalCoach_Misty) because I wanted to ask the burning question that all freelance paralegals really want to know, which is:

"What is the #1 task you outsource."

Amongst the many answers provided in my poll was the daunting task of obtaining, auditing, disputing, and finalizing subrogation liens. In fact, when it comes to Medicare, several firms outsource this task altogether by using big companies like Synergy and Epiq (formerly Garretson). However, as technology evolves and large insurance companies evolve with it, the doors begin to slowly open for freelance paralegals to broaden their horizons into lien handling as a service-based product. However, even if you're reading this article as an in-house paralegal, chances are, the task of obtaining and tracking liens usually falls on you.

In case you're wondering, and to get truly technical for just a moment, subrogation is:

"The assumption by a third-party of another party's legal right to collect a debt or damages."

In a nutshell, if your client is receiving money for damages incurred from a case for which his/her healthcare insurance (or any other insurance) paid a bill, including a hospital stay, clinic visit, ambulance ride, etc., then the insurance company is entitle to reimbursement.

The process is tedious and could take as little as 180 days or as much as several years, depending on the claim or case. Nevertheless, the attorneys like to outsource this process, which potentially opens up a line of new service-based products offered by freelance paralegals. If you're an in house paralegal dealing with subrogation or if you're a freelance paralegal looking to add this to your services, here are 7 steps you can take to obtaining, negotiating, and finalizing those pesky subrogation liens.

1. Get A Handle On It

You need to identify and prepare an index of potential lienholders, including contact info, policy identifiers, and the type of plan that may be collecting - Medicare/Medicaid, Workers' Comp, ERISA, Advantage, etc. You'll expand on this index as we move along in this checklist.

Of course, I have a liens index already prepared for you, which you can download from my website at

Now that you've got a handle on what sort of liens may exist, we start step 2.

2. Have A Discussion With The Plaintiff/Client

The Plaintiff needs to be made aware of what liens may require reimbursement from any settlement or recovery he/she may receive. If you're reporting to Medicare, keep in mind that when you receive documents in the mail from Medicare, so does your client. Avoid blindsiding the Plaintiff with paperwork received from Medicare by letting the Plaintiff know in advance. This will help to ward-off unwanted and unnecessary telephone calls. Medicare is the only lienholder that will directly communicate with the beneficiary (or insured) once you've sent out a letter of representation, which takes me to the next step.

3. Prepare Letters of Representation

Prepare a letter to each potential lienholder identifying yourself, the beneficiary (or insured's) name, address, date of birth, last 4 of the SSN, if applicable, the HICN number (which is a Medicare beneficiary's ID number), date of loss, date of death (if applicable), and policy/group info. If you're dealing with Medicare (also known as CMS) as a lienholder, you've got some additional steps. Medicare also requires that you identify the beneficiary's gender, and description of injury, illness, or harm, type of claim (Liability Insurance, No-Fault Insurance, or Workers' Compensation). And of course, no matter who you are sending the letter to, make sure to include your complete contact information, file number (if needed), and a HIPAA authorization, as well as a Power of Attorney, Order of Appointment, or Letter of Office, if someone other than the beneficiary is signing the HIPAA or POA.

Medicare has many "Parts", which includes Medicare Parts A and B, covering inpatient/outpatient hospitalization, as well as Medicare Part C, which is the supplemental insurance plan (sometimes referred to as the Advantage Plan), and Medicare Part D, which is prescription drug coverage. There are more Parts, but Parts A though D usually cover the bases. Honestly, I could speak about nothing but Medicare and the Medicare Set-Aside process, but that would make for a really long article. Instead, here is the CMS link that includes the Medicare Recovery Process.

Of course, what would this article be without also offering you some additional support, and that would be in the form of a template letter of representation, which you can also download on my website at The template letter can be modified to send to private healthcare insurance companies or Medicare. However, regardless of whom you send letters of representation to, my recommendation is that you always send your letters and supporting materials via Certified Mail for tracking purposes.

Now let's move on to Step 4.

4. Wait for Feedback

Within 45-days from the date of your letter, you should start to get responses from lienholders. Most insurance providers will require some additional information in order to provide you with a detailed summary of the charges. Medicare in particular has two initial letters, including a general form to fill out and return. The form is a formality and because you provided so much detail in your letter of representation, you really do not need to fill out and return the form The second letter is the Payer Rights & Responsibility letter notifying you and the beneficiary of Medicare's right to reimbursement. The third document you receive from Medicare is the conditional payment summary, also known as a CPN - conditional payment notification. The Medicare form to fill out should come within about 45-days from MSPR. The Payer Rights & Responsibilities letter should come within about 60-days, and the CPN within 90-days. Keep in mind that you're at the mercy of the government when dealing with Medicare. As my veteran husband would say:

"Hurry Up And Wait."

Once the process with Medicare has begun, Medicare has a portal that allows you to regularly obtain your CPN. Here is link to the MSPRP. For all other lienholders, they will generate an itemized summary once they have enough information from you about the case. Nevertheless, you should have the itemized summary within 90-days of issuing the letter of representation. While this isn't a hard deadline, this range should be a soft-reminder and something to keep on your radar (or productivity platform). If you've heard nothing within 90-days, it's time to put your proactive cap on and start following up.

Keep in mind that once you report a claim or case to a subrogating insurance company, they will regularly require updates on the pending claim or case. Medicare, on the other hand, will not require updates on the claim. Instead, it is up to you to login to the portal and obtain monthly screenshots, which I recommend, for your case. Medicare will only send another CPN if requested. Here's where your index comes in again, which we'll discuss in the next step.

5. Audit & Dispute

If you haven't already, you'll want to expand on your index and include columns for "Amount Billed", "Amount Owed", "Amount Disputed", and any additional columns you may need - perhaps Notes or Follow-Up. Take a look at the itemizations provided on the payment summary, and make sure nothing has been included that isn't related to the injury, illness, or harm for which your Plaintiff is seeking recovery. If you've signed up to use the MSPR Portal, I would recommend you obtain screenshots of Medicare's CPN every 30 to 60 days, and save the screenshot as a PDF in your client lien file. As I stated above, your liens index will serve as a visual cue in the event the lien amounts for any lienholder dramatically spikes. In the event you see a spike, request that Medicare send you an updated CPN. Once you receive it, audit the itemizations for any necessary disputes.

When (not if) you find an itemization that isn't related to the injury, harm, or illness for which your Plaintiff is seeking recovery, make sure you flag it for dispute. The dispute process varies per insurance provider and the type of lien that is attempting to recover from your client's claim or case. Some lienholders will not charge for the services you're seeking recovery from. For instance, if you are suing St. Anthony's Hospital and St. Anthony's Hospital is an itemized charge, then you can ask the lienholder to remove the charge. Unfortunately, if you're dealing with an ERISA plan, your request may fall on deaf ears. ERISA plans are very difficult to negotiate with and honestly, the case law is on the side of the ERISA plan.

If you're disputing an itemization Medicare has entered on the CPN, the dispute process is provided in the link above for the Medicare Recovery Process. If you're registered for Medicare's Portal, then your disputes can be sent using the Portal. Keep in mind that all disputes must be submitted to any lienholder, including Medicare, with proof of the dispute. For Medicare, you can automatically dispute any itemization for medical entities you are suing. For disputes other than this, you'll need have proof the charge doesn't belong to the claim or case. Discharge summaries and physician depositions are usually where you'll find the greatest proof in disputing itemizations.

We're almost there. Just two more steps to go.

6. Negotiate & Finalize

By now, a few months could have passed or a few years. The numbers for any or all of your liens could have fluctuated a bit, or waived all together. For instance, if CMS is taking the majority of the lien, the Medicare Advantage Plan could waive their right to reimbursement all together. Attempt to negotiate your liens down based on the settlement, award, or verdict numbers. If you are still in settlement discussions and need accurate numbers, begin negotiating down. If your client is making (or going to make) a decent to large recovery from the claim or lawsuit, don't expect much budging from the lienholders. On the other hand, if there isn't enough money to go around, most lienholders (with the exception of ERISA plans) will work with you.

If you're dealing with Medicare, you'll need to submit a request for a Final Demand. The Final Demand is subject to a calculation Medicare applies after receiving information such as the settlement amount, attorneys' fees, and expenses. The demand, in most cases, will be lower than what was reported on the CPN, unless additional claims are discovered. Keep in mind that you'll have 60-days from the date the Demand was issued by Medicare to pay the Final Demand. If you do not, the lien will be subject to additional principal and interest, which I'll cover in the next step. Of course, this information is also covered in the Medicare links provided above.

As you get the final numbers from your lienholders and Medicare's Demand, add that info to your index. If you've got Medicare's Final Demand, make sure you diary when your 60-days is up, which brings me to the final step.

7. Payout

Now you've signed a Final Settlement Release, you’ve done some back and forth with the lienholders and requested everyone's final numbers, including Medicare's Final Demand. You've received the settlement funds, they've passed through your Client Trust Account, and now it's time for distribution. This means it's time to prepare letters to the lienholders, enclose the checks for the amounts their owed, enclose the Final Demand, and send everything off to the lienholders via Certified Mail for tracking purposes.

In the event you weren't able to pay Medicare's Final Demand within the 60-day deadline, then here's what you do. In your letter to Medicare paying the Final Demand, explain why you weren't able to satisfy the Demand within 60-days. For example, if you didn't get the money in time from the insurance company or their attorney, or you didn't have an order approving distribution from a probate court. Just explain the circumstances and follow it up with proof (perhaps the date on settlement check or date on the order of approval). Medicare will work with you, but they need to know why the Demand was paid late.

On the other hand, if you're unable to pay Medicare's demand because there isn't enough settlement funds to go around, you are able to request a Hardship Waiver, which is covered in the Medicare links above. Keep in mind that regardless if you request a Hardship Waiver from Medicare, the Demand still exists and must be paid within 60-days. Unfortunately, you must have a Demand before you can request a Hardship Waiver. To make matters worse, the Hardship Department does not speak to the Demand Department. I know that sounds strange, but think about it .... you're dealing with a governmental entity.

Now all you have to do is wait some more - wait for the Certified Green cards to come back proving you paid all subrogation liens, and you should be pretty ready to close your file.

APPLAUSE to you for making it to the end of this long article, and as a token of my gratitude, I'm going to gift you with one more template, which is the reason I started this article .... my Subrogation Checklist for all of your cases, and here's how it works:

Just enter your case name and the beneficiary or insured's name. Keep track of where you are step-by-step and keep a snapshot of all of your cases. Just a little something to keep you ahead of the game and organized.

Need one-on-one assistance with lien subrogation issues?

Misty Murray, Founder

Paralegal Career & Freelance Business Coach

Follow me on Instagram @ParalegalCoach_Misty

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