Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance tailored to your situation.
Detailed Answer
When you recover a personal injury settlement in New Mexico, various entities may assert liens against your award to secure repayment of medical, funeral, tax, or legal costs. A lien is a legal claim on the settlement proceeds that must be satisfied before you receive your net recovery. Below are the most common liens:
Medical Provider Liens
Under the New Mexico Medical Lien Act (NMSA 1978, § 41-3-1 et seq.), doctors, hospitals and other health care providers can file liens against a patient’s tort settlement. A lien protects the provider by ensuring repayment from any award. You must follow notice requirements and timeframes specified in the statute. (See NMSA 41-3-1.)
Medicare and Medicaid Liens
Federal law requires repayment of Medicare and Medicaid funds used for treatment related to an injury when another party is responsible. Under 42 U.S.C. § 1395y(b), Medicare can seek reimbursement directly from your settlement. Medicaid subrogation rules at 42 U.S.C. § 1396a similarly allow the state to recover costs. Timely notice to these agencies can help avoid penalties. (See 42 U.S.C. § 1395y and 42 U.S.C. § 1396a.)
Health Insurance and ERISA Plan Liens
Private health insurers and employer-sponsored plans often include subrogation or reimbursement clauses. If your policy covered treatment, the insurer can claim repayment from your settlement funds under ERISA or state contract law. Review your policy language and promptly notify the plan administrator to assert or negotiate any lien.
Attorney’s Charging Lien
New Mexico law recognizes an attorney’s common-law charging lien on the proceeds of a client’s lawsuit to secure payment of fees and expenses. This lien attaches to any judgment or settlement fund controlled by the court or held by the opposing party until the attorney’s bill is paid.
Funeral and Burial Liens
Under NMSA 1978, § 45-5-507, funeral homes may assert a lien for funeral and burial expenses out of any wrongful death recovery. This lien ensures payment for services rendered before the distribution of settlement proceeds. (See NMSA 45-5-507.)
Federal Tax Liens
The IRS may file a federal tax lien under 26 U.S.C. § 6321 against any personal property, including settlement proceeds, when a taxpayer has unpaid federal taxes. A filed notice of federal tax lien gives the government priority over most unsecured creditors. (See 26 U.S.C. § 6321.)
Helpful Hints
- Review all lien notices carefully and meet the filing deadlines to protect your rights.
- Notify Medicare, Medicaid, and private insurers early to minimize penalties and interest.
- Engage an attorney experienced in personal injury and lien resolution to negotiate or challenge excessive claims.
- Maintain detailed records of all medical bills, insurance payments, and correspondence with lienholders.
- Consider negotiating reduced lien amounts when possible to maximize your net recovery.