How to Navigate Medicaid Liens in a Personal Injury Settlement in New Jersey
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.
Detailed Answer
When Medicaid pays for medical treatment tied to a personal injury, the New Jersey Department of Human Services (DHS) has a legal right to recoup those expenses from any third-party settlement or judgment. This right, called subrogation or a lien, is established under N.J.S.A. 30:4D-20. Here’s how you navigate this process:
1. Identify Medicaid Payments and File a Notice
Once you file a personal injury claim, notify DHS in writing of the claim and provide your Medicaid ID and case information. Request a conditional payment letter, which lists all medical bills Medicaid paid related to that injury. Under N.J.A.C. 10:49-5.4, DHS must provide this letter within 60 days of receipt of your request.
2. Review and Dispute Inaccuracies
Carefully compare the conditional payment letter to your billing records. If Medicaid seeks reimbursement for unrelated or duplicative charges, file a written dispute with DHS, including documentation that supports your position.
3. Allocate Your Settlement Strategically
Work with your attorney to allocate portions of your recovery among medical expenses, pain and suffering, lost wages, and other damages. A clear allocation table can limit Medicaid’s recovery to only the medical portion covered by Medicaid and recognized by DHS.
4. Satisfy the Lien Promptly
Under N.J.S.A. 30:4D-20, Medicaid’s lien must be paid from settlement proceeds no later than 60 days after the settlement or judgment. Late payment may incur interest or penalties. DHS typically issues a release of lien when it receives full payment.
5. Obtain a Lien Release
After you remit payment, request a lien release or statement of satisfaction from DHS. This document confirms that Medicaid has no further claim on the settlement funds and allows you to disburse remaining proceeds.
Relevant Statute: N.J.S.A. 30:4D-20 (Medicaid subrogation and liens)
Helpful Hints
- Keep a detailed file of all Medicaid billing statements and communications with DHS.
- Request the conditional payment letter early—ideally immediately after a claim is filed.
- Dispute any unrelated or inaccurate charges within the DHS deadline.
- Include a clear settlement allocation worksheet in your demand package.
- Pay the lien before the 60-day deadline to avoid interest or penalties.
- Secure a lien release before distributing settlement funds to clients or other parties.
- Consult a knowledgeable personal injury attorney or Medicaid subrogation specialist for complex cases.