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If I'm on Medicare or Medicaid, and Medicare or Medicaid paid my medical bills for my injuries, why can my lawyer hold my settlement money until he knows how much has to be repaid to them?

 

A: In New York, Medicare and/or Medicaid must be repaid if they have paid your medical bills for your injuries. They hold what is called a 'lien' against the proceeds of your lawsuit. If you recover money in a settlement or a judgment, Medicare and/or Medicaid is entitled to know how much you will receive, how much your attorney will receive and how much your attorney has spent to prosecute your case. (Medicaid must notify you or us in a specific way in order for them to have a valid lien.) Your attorney will hold onto your settlement money in a special attorney escrow account until he knows exactly how much must be repaid to Medicare and/or Medicaid. Often, the attorney will try to negotiate with those agencies to try and reduce the amount that they claim they are owed. Once the negotiation process has been completed, and the agency has agreed to a final number, then and only then, can the attorney make final payment to Medicaid and/or Medicare, and then make final payment to you- the client.