Detailed Answer
When New Mexico Medicaid covers medical treatment after a personal injury, it acquires a lien against any recovery you obtain through settlement or judgment. Understanding this lien helps you plan negotiations and protect your net recovery.
1. Identify Medicaid’s Lien
New Mexico’s Medicaid program notifies beneficiaries of its subrogation rights once it pays for medical services. The state’s claim may appear on demand letters or in your Medicaid account records. Review all correspondence from the New Mexico Human Services Department (HSD) to confirm the lien amount.
2. Calculate the Lien Amount
Under NMSA 1978, Section 27-2-17 (“Liens for medical assistance”), Medicaid can seek reimbursement for “medical assistance paid” on your behalf. You must obtain an itemized statement of benefits paid and any paid co-pays or deductibles. Compare those amounts with your total medical expenses to verify accuracy. NMSA 1978, §27-2-17.
3. Negotiate the Lien Amount
Federal regulations under 42 C.F.R. §433.139 allow states to “establish reasonable methods” to reduce lien amounts when recovery is limited. In New Mexico, consider negotiating with HSD’s Third Party Liability Unit. Present proof of litigation risk, attorney fees, and other liens to justify a reduction. 42 C.F.R. §433.139.
4. Seek Court Approval for Reduction
If negotiations stall, file a motion with the court handling your personal injury case. Ask the judge to review the lien amount in light of equitable considerations such as your net recovery after attorney fees and other expenses. Courts in New Mexico have discretion to reduce Medicaid liens to prevent unjust enrichment at the claimant’s expense.
5. Disburse Settlement Funds
After resolving the lien, the court will order specific disbursement instructions. Pay the approved Medicaid lien first. Then allocate funds for attorney fees, other lienholders, and finally, your net recovery.
Disclaimer: This article is for educational purposes and does not constitute legal advice. Consult a qualified attorney in New Mexico to address your specific situation.
Helpful Hints
- Gather all Medicaid Explanation of Benefits (EOBs) to verify paid amounts.
- Document your total medical expenses and compare them to what Medicaid paid.
- Ask your attorney to communicate directly with the HSD Third Party Liability Unit.
- Prepare a detailed net-recovery chart to support lien reduction requests.
- File lien reduction motions early to avoid delaying your settlement.