Disclaimer: This content provides general information under New Mexico law and is not legal advice.
Detailed Answer
When you settle a personal injury claim in New Mexico, federal and state health programs may assert reimbursement rights for medical expenses they paid on your behalf. Understanding these liens helps you negotiate a fair net recovery.
Medicaid Liens in New Mexico
New Mexico’s Medicaid program can place a lien on any judgment or settlement that covers medical costs for a beneficiary. Under NMSA 1978, § 41-7-17, the Human Services Department must be reimbursed from third-party recoveries for services paid through Medicaid. You must:
- Notify the Human Services Department of your claim.
- Allow them to file a lien against your settlement proceeds.
- Pay medical expenses first before distributing other damages.
See the Medicaid lien statute: NMSA 1978, § 41-7-17.
Medicare’s Conditional Payments
Medicare reimbursement comes under the federal Medicare Secondary Payer Act (42 U.S.C. § 1395y(b)). If Medicare pays for treatment that a responsible third party should cover, it makes a conditional payment. After you settle:
- Medicare demands repayment of its conditional payments.
- You must report your settlement to the Centers for Medicare & Medicaid Services (CMS).
- CMS issues a demand letter specifying how much you owe.
Learn more: 42 U.S.C. § 1395y(b).
How These Liens Affect Your Settlement
- Reduced Net Proceeds: Liens cut into your settlement, covering only the medical portion.
- Allocation of Damages: Your attorney should allocate the settlement among medical expenses, lost wages, and pain and suffering. Higher non-medical allocations can preserve more net recovery.
- Negotiation: You may negotiate lien reductions with Medicaid or arrange a Medicare Set-Aside (MSA) for future medical needs.
By coordinating with state and federal agencies, you can manage reimbursement demands and maximize your net award.
Helpful Hints
- Notify Medicaid and Medicare of your claim early to prevent surprise liens.
- Ask your attorney to allocate settlement funds strategically across damages categories.
- Consider hiring a benefits specialist to calculate optimal Medicare Set-Asides.
- Review your settlement figures with your insurer or case manager before closing.
- Keep detailed medical records and billing statements handy for lien negotiations.