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When you settle a personal injury claim in New Jersey, both Medicaid and Medicare may seek repayment for medical expenses they paid on your behalf. You must satisfy these reimbursement rights before you receive your net settlement funds.

Medicaid Liens in New Jersey

Under N.J.S.A. 30:4D-21.1, the New Jersey Division of Medical Assistance & Health Services holds a lien on any recovery for injuries when Medicaid covered related care. This lien allows the State to recoup payments from your settlement. You must:

• Notify the Medicaid agency in writing about your claim and settlement.
• Allow the agency to calculate its lien amount, which often equals the total medical benefits paid.
• Deduct the lien from the gross settlement before distribution.

Learn more: N.J.S.A. 30:4D-21.1.

Medicare Secondary Payer Rules

Medicare operates under the Medicare Secondary Payer Act (MSP). Federal law requires Medicare to be paid back for conditional payments it made if another party is responsible for your injury. Key points:

• Medicare pays only when no other insurer is available.
• You must report your claim to the Medicare Coordination of Benefits Contractor (COBC) and request a conditional payment report.
• You must repay Medicare before you disburse your settlement. This often includes both past payments and anticipated future care, which may be addressed through a Medicare Set-Aside (MSA).

Relevant regulations: 42 C.F.R. §411.37 and 42 U.S.C. §1395y(b).

Key Steps to Protect Your Settlement

1. Engage counsel early. An attorney experienced with Medicaid and Medicare liens can handle notices, reports, and negotiations.
2. Obtain lien statements. Request itemized statements from both agencies to verify the amounts owed.
3. Negotiate reductions. New Jersey Medicaid may agree to a reduced payoff in some circumstances. Medicare generally enforces full repayment of conditional payments but may limit future care obligations through an MSA.
4. Document everything. Keep copies of all correspondence, reports and receipts related to medical payments and settlements.
5. Disburse in the correct order. Pay statutory liens first, then attorney fees, costs, and finally your net recovery.

Helpful Hints

• Notify Medicaid within 30 days of filing suit to avoid lien penalties.
• Ask your attorney to request a Conditional Payment Letter from Medicare early (allow 45–90 days for processing).
• Consider a professional lien-resolution service if multiple payers are involved.
• Keep an escrow account for lien payments if settlement negotiations take time.
• Review any settlement agreement to confirm lien satisfaction language.

Disclaimer: This article is for educational purposes and does not constitute legal advice. Laws can change. Consult a qualified attorney regarding your specific circumstances.