This article was cowritten by Tara King, Senior Counsel, and Emma Guidry, Senior Paralegal.

After years of litigation, receiving the news that your mass tort case reached a settlement feels like the long-awaited finish line. But while this is good news, it's not the final step in receiving your compensation. Once a settlement is reached, several legal and administrative processes must take place before the funds can be disbursed.

WHAT IS A MASTER SETTLEMENT AGREEMENT (MSA)?

In mass tort cases, settlements are governed by a Master Settlement Agreement (MSA). This is a detailed agreement that outlines the terms of the settlement for all plaintiffs. The MSA helps create a framework for how funds will be distributed, and each individual case must be reviewed under the guidelines established in the agreement.

The MSA not only sets the overall terms of the settlement but also determines how each individual case will be evaluated. For instance, in cases involving defective medical devices, the agreement will generally go through a process known as allocation. Allocation measures the value of a claim solely on objective criteria that allows for similarly situated individuals to be treated the same. Those with more serious injuries typically receive higher compensation than those with minor injuries, other factors often used to measure are the amount of treatment received and age at time of injury. Similarly, in sexual assault cases, the agreement might outline a tier system based on the severity of abuse and the amount of damages. Those who rank higher in the matrix typically receive a higher percentage of compensation.

WHAT IS LIEN RESOLUTION AND WHY IS IT TAKING SO LONG?

One of the most time-consuming steps in finalizing a settlement is lien resolution. A lien is a legal claim made by entities like healthcare providers or government agencies (like Medicare and Medicaid) on part of your settlement to cover costs they've paid on your behalf. The process of negotiating and resolving these liens can take months or even longer, depending on the complexity.  

Part of this process involves verifying whether Medicare, Medicaid or private insurance ever paid for any medical treatments on your behalf that are related to the compensable injury. Many times, this is a requirement of the Master Settlement Agreement.  Even if you don't recall using these services, we are required by law to obtain a confirmation letter from governmental agencies to verify this information- this process is known as verification of entitlement.

Liens can also be extremely confusing because typically premiums are paid and it would seem that paying for healthcare is an insurance company's job and as such the insurer should have anticipated that risk. However, the insurance companies have claw back rights pursuant to Federal and most State laws and what people don't realize is that when you buy a healthcare plan or enroll through your work, you are contractually bound by the plan language. The plan language generally provides airtight provisions in favor of the health insurance company to collect or subrogate a percentage or the entire amount paid (depending on the type of plan) on your behalf for the compensable injury in any third-party liability claim which is general what personal injury settlements are.

WHEN CAN I EXPECT MY SETTLEMENT FUNDS?

While every case is different, it's common for settlement funds to take up to a year or more to be disbursed after the settlement is reached. There are usually provisions in the MSA that provide a threshold for executed releases that must be received before the defendant will fund the account.  That is why it is important to always timely return settlement documents. In some cases, you may receive an initial disbursement, which is a percentage of your total settlement, while lien resolution is still ongoing. This allows you to access some of your compensation sooner. The remainder of the settlement is typically held back until all liens – such as those from Medicare, Medicaid, VA, or private insurance companies – are resolved. Generally, the percentage held back is mandated by statute or contractual agreement. This can be a frustrating delay, but it's a necessary step to ensure the lien resolution administrator has the opportunity to negotiate the lien and payment is handled properly, and you receive the correct amount.

WHAT CAN I DO TO SPEED THE PROCESS ALONG?

You may feel like you're in limbo, but there are a few things you can do while waiting. Stay in close communication with your legal team to receive updates on the settlement and lien resolution process, and again, promptly provide any additional documentation they might need to speed things along. In large settlements third-party lien resolution company is appointed in the MSA and your attorneys have little say in the process at times but do everything to ensure that you receive the maximum amount of your settlement. Often, the lien resolution administrator will require that you sign another HIPAA for that company and fill out forms with information pertaining to any health insurance companies or government benefits you have utilized in the past.

Reaching a settlement is a significant step forward, but the process of receiving your compensation takes time. Patience is important and the end is in sight.