You will often hear the term lien used in a personal injury case. Medical liens are legal claims that health insurers, Medicaid, Medicare, hospitals, and some medical providers can place on your settlement to recover the costs of your medical care. This means you have to pay those amounts owed from your settlement.
For example, in New Mexico a hospital can file a medical lien against a patient’s recovery or payment for treatment from an accident.
Understanding Hospital Liens in New Mexico
Hospital liens are governed by New Mexico Statutes NMSA 48-8-1 – NMSA 48-8-7.
A medical lien filed by a hospital will be for the amount of reasonable hospital charges, including care, maintenance, and treatment, up to the date of payment. There are certain procedures that must be followed for there to be a valid lien, which include filing written notice with the county clerk, mailing that notice to the injured party, and including certain information about the accident. Hospitals are well-versed in these requirements as they frequently file liens in personal injury cases.
What Assets Do Liens Affect?
It is important to note that a hospital lien (and other liens associated with your personal injury case) attach to your settlement funds, but do not attach to items like your house or vehicle or other assets. This means you must satisfy the lien out of the settlement, but it does not put your house, vehicle, or other assets in jeopardy.
Common Scenarios Where Liens Arise
The most common scenario liens arise for most individuals is the result of a health insurer or Medicaid paying medical bills on behalf of the injured. Keep in mind, liens are not necessarily bad – as in the case of health insurance or Medicaid paying bills. They often pay a contracted reduced rate that is lower than the billed amount to you. So even though you must repay them to satisfy their lien, you often will benefit financially even after paying off the lien.
For those interested, Medicaid’s right of reimbursement (lien) arises by statute in New Mexico
And a health insurer’s right or reimbursement arises by contract – meaning that your insurance policy contains language that gives your insurer this right of reimbursement.
Liens/Right of reimbursement are a big deal and must be dealt with. They can’t be ignored.
Dealing with Liens: What You Need to Know
This means that liens must be resolved and paid out of your settlement before you can receive the remaining settlement funds. The good news is that there are provisions in the law that your attorney may be able to use for your benefit in negotiating the resolution of these liens to your benefit. The goal is to maximize the amount you get to take home after paying everything you owe, and reducing liens is an important tool in that process.
Example: If Medicaid pays $10,000 of your medical expenses, they will place a lien on your settlement to recover that amount they paid on your behalf. Remember, the insurance company is paying you money that is to be used to pay your medical bills. If you get paid by the insurance company for the medical bills that Medicaid paid for you, then the settlement money must be used to reimburse Medicaid. Your attorney will try to negotiate to reduce the lien, ensuring you retain as much of your settlement as possible.
In Plain Terms Summary:
- Medical liens are legal claims that health insurers, Medicaid, Medicare, and hospitals can place on your settlement to recover the costs of your accident-related medical care.
- The lien attaches to the settlement funds, not your personal assets.
- Liens can often be reduced but must be paid out of your settlement.
- You can’t ignore them!
Conclusion:
Our dedicated personal injury team is here to help you if you have any questions on liens or any other issues after an accident. Schedule your free initial consultation today by calling our office at 575-300-4000, starting a chat, or filling out our online form.
If you want even more information, feel free to check out my free book, Car Accident Cases Made Simple(r), where I discuss this topic and more.
