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New Mexico Subrogation Laws
Sections
State Subrogation
Made Whole Doctrine
Common Fund
Collateral Source Rules
Hospital Lien Act
Medicaid Statute
State Subrogation
YES, equitable and contractual (Amica Mut. Ins. Co. v. Maloney, 903 P.2d 834 (N.M. 1995); Jimenez v. Foundation Reserve Ins. Co., 757 P.2d 792 (N.M. 1988)).
Made Whole Doctrine
Equitable Apportionment
- The doctrine of Equitable Apportionment reduces the amount reimbursed to the subrogated insurer when the insurer’s recovery represents only a portion of the actual damages. Instead of the all or nothing effect of the Made Whole Doctrine, a Doctrine of Equitable Apportionment results in a fairer result where the subrogation interest is reduced proportionately to the reduction of the insured’s total claim. America Mut. Ins. Co. v. Maloney, 903 P.2d 834 (N.M. 1995).
- An insurer’s subrogation recovery will be reduced proportionally to the insured’s recovery out of the entire claim for damages. Quality Chiropractic, PC v. Farmers Ins. Co., 51 P.3d 1172 (N.M. Ct. App. 2002).
Common Fund
YES
Insurer must pay share of attorney’s fees proportional to amount of involvement in the litigation (Amica Mut. Ins. Co. v. Maloney, 903 P.2d 834 (N.M. 1995)).
Collateral Source Rules
Applies, damages will not be reduced
Hospital Lien Act
- NMSA 1978, §48-8-1: Every hospital has a lien upon the settlement, less attorney’s fees, for the amount of the reasonable, usual and necessary hospital charges for hospital care
- A public hospital does not have to pay its share of attorney’s fees (Eaton, Martinez & Hart, P.C. v. University of New Mexico Hosp., 934 P.2d 270 (N.M. 1997))
- A private hospital does have to pay its share of attorney’s fees (Martinez v. St. Joseph Healthcare System, 871 P.2d 1363 (N.M. 1994))
- NMSA 1978, §48-8-2: No lien is effective without written notice filed with the county clerk and mailed to the interested parties
- No statute or case law on balance billing
Medicaid Statute
- NMSA 1978, §27-2-23: the department is subrogated to any right of the recipient against a third party
- Reduction: nothing guarantees the Department’s right to 100% recovery, reimbursement is subject to equitable reduction (Kahrs v. Sanchez, 956 P.2d 132 (N.M. Ct. App. 1997))