Will medical or chiropractor liens be deducted from my settlement?

Short answer: Possibly. Medical providers, health insurers, Medicare, and Medicaid may assert liens, subrogation claims, or reimbursement rights that can reduce the money you receive from a personal-injury settlement in New Mexico. Whether a chiropractor’s bill or other medical charge comes out of your settlement depends on whether a valid lien, assignment, subrogation right, or statutory reimbursement claim exists, and how your attorney negotiates those claims.

Detailed answer — how liens and reimbursements commonly work in New Mexico

This section explains the main categories of claims that can reduce your settlement and what to expect under New Mexico law and common practice.

1. Private medical-provider liens and written agreements

Some medical providers (including chiropractors) will ask you to sign a written lien or assignment that says they will look to any future settlement for payment. If you signed a valid lien or assignment, the provider can try to collect from your settlement proceeds. In practice, a provider with a properly documented lien may demand payment before the insurer releases net funds to you.

2. Health insurer subrogation and ERISA plans

If an insurer (private health insurance or an ERISA plan) paid for treatment, it often has a contractual or subrogation right to be reimbursed from any settlement that compensates you for those same medical expenses. For ERISA plans (many employer plans), the plan documents control the plan’s right to recover. ERISA recovery claims often require prompt handling and specific procedures; they can sometimes be negotiated down but may also be enforceable by lawsuit.

3. Medicare and Medicaid (public benefits) recovery

Medicare and Medicaid have strong federal and state rules that let them recover conditional payments and reimbursements from third-party settlements. Medicare’s recovery and conditional payment process is governed by federal law and CMS procedures; Medicaid recovery is handled by New Mexico’s Human Services Department (HSD). If you receive Medicare or Medicaid benefits for the injury-related treatment, those programs may place a lien on settlement funds and must be repaid to the extent the settlement covers medical costs.

Helpful official links:

New Mexico Legislature (statutes search): https://www.nmlegis.gov/
New Mexico Human Services Department (Medicaid): https://www.hsd.state.nm.us/
CMS — Medicare recovery and conditional payments: https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Recovery

4. Hospital or facility liens

Some hospitals and medical facilities assert liens or pursue collection if unpaid. Whether they have a statutory lien or rely on contract varies by provider. You should check whether any hospital lien statutes apply and whether the provider followed proper notice procedures.

5. Attorney fees and costs

Your attorney’s contingency fee and case costs are typically paid from the settlement before you receive any money, unless the fee agreement says otherwise. How fees are calculated (on the gross settlement or after lien payments) depends on your fee agreement. Many attorneys will try to negotiate with lienholders so you don’t pay the full billed amount out of pocket and to minimize the net reduction to you.

Common settlement distribution sequence (typical but not guaranteed)

Defendant/insurer pays the settlement to the claims account or into court/escrow.
Your attorney(s) resolves outstanding liens and demands from insurers, Medicare/Medicaid, and other payors.
Your attorney’s fees and case costs are deducted according to the fee agreement or court order.
Validated liens and reimbursements are paid or a holdback is negotiated.
Remaining net proceeds are paid to you.

Hypothetical example

Jane is injured in a car crash in Albuquerque. Her chiropractor bills $4,000. Her private insurer paid $1,500 and says it has a subrogation right. Jane settles her claim for $20,000. Her attorney negotiates the private insurer’s reimbursement down to $900, negotiates the chiropractor’s lien to $2,500, and charges a 33% contingency fee ($6,600) plus $500 costs. After payments, Jane receives the balance. The example shows how multiple claims and fees can reduce net recovery.

What you should do now (practical steps)

Tell your attorney immediately about every provider, insurer, or public benefit that paid for your care (including chiropractors).
Ask your attorney to demand itemized bills and lien documentation in writing; don’t sign releases that waive your attorney’s ability to negotiate liens.
Check whether you received Medicaid or Medicare benefits; if so, notify the appropriate agency so they can identify any repayment claim.
Ask your attorney to request payoff figures and conditional payment amounts (for Medicare) in writing before settlement funds are disbursed.
Consider asking the court or insurer to approve an escrow or holdback to resolve disputed liens rather than paying contested amounts immediately.

How liens can be challenged or reduced

Liens and subrogation claims can sometimes be reduced or eliminated by:

Negotiation — many providers accept less than full billed charges when they know the only source of recovery is the settlement.
Arguing the lien is invalid — for example, if the provider lacks a written lien, failed to meet New Mexico notice requirements, or the payment relates to services not linked to the injury.
Allocating settlement amounts to non-medical damages (pain and suffering) rather than medical expenses, where appropriate — courts and insurers often respect reasonable allocation but Medicare/Medicaid may still assert claims.

What to watch out for in New Mexico

Medicaid/Medicare repayment obligations can be strict; failing to notify these agencies can lead to larger recovery demands later.
ERISA-plan subrogation may require following strict administrative procedures; missing those can hurt your defense against a plan’s claim.
Verbal promises to a provider usually don’t create enforceable liens; written lien documents are more likely to be enforced.
Check your fee agreement for how attorney fees are calculated relative to lien payments — read it before you sign anything to settle.

Where to get authoritative information in New Mexico

New Mexico Legislature statues search: https://www.nmlegis.gov/ — use this site to search for any specific New Mexico statutory lien provisions or related rules.
New Mexico Human Services Department (Medicaid inquiries and recovery processes): https://www.hsd.state.nm.us/
CMS — Medicare conditional payment and recovery resources: https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Recovery

Helpful hints

Don’t ignore bills — unresolved bills can turn into liens or collection actions that complicate settlement.
Keep all medical records and itemized bills; those documents help your lawyer negotiate and dispute claims.
Ask for written payoff or lien-release agreements before a settlement finalizes.
Consider asking the insurer to issue multiple releases (one for liability/settlement and separate releases for lienholders) or to place disputed funds in escrow.
If you received Medicaid or Medicare, notify your attorney early so they can request conditional payment amounts and involve the agencies in settlement negotiations.
If a health plan threatens to sue for reimbursement, preserve all plan documents and correspondence; ERISA plans follow unique procedures.

Disclaimer: This article explains general principles and is not legal advice. Laws and procedures change. For guidance about your specific New Mexico case and for help resolving liens or repayment demands, consult a licensed New Mexico attorney who handles personal-injury, subrogation, or insurance-recovery matters.