Senate Bill No. 322
(By Senator Oliverio)
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[Introduced February 23, 2009; referred to the Committee on
Health and Human Resources; and then to the Committee on
Finance.]
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A BILL to amend and reenact §9-5-11 of the Code of West Virginia,
1931, as amended, relating to exempting life insurance
policies with a death benefit of $25,000 or less from
assignment by Medicaid recipients to the Department of Health
and Human Resources.
Be it enacted by the Legislature of West Virginia:
That §9-5-11 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 5. MISCELLANEOUS PROVISIONS.
§9-5-11. Assignment of rights; right of subrogation by Department
of Health and Human Resources to the rights of
recipients of medical assistance; rules as to effect of
subrogation.
(a) Submission of an application to the Department of Health and Human Resources for medical assistance is, as a matter of law,
an assignment of the right of the applicant or legal representative
thereof to recovery from personal insurance or other sources,
including, but not limited to, liable third parties, to the extent
of the cost of medical services paid for by the Medicaid program.
This assignment of rights does not extend to Medicare benefits:
Provided, That life insurance policies with a death benefit of
$25,000 or less are exempt from assignment under the provisions of
this section.
At the time the application is made, the department shall
include a statement along with such application that explains that
the applicant has assigned all such rights and the legal
implications of making such assignment as provided in this section.
If medical assistance is paid or will be paid to a provider of
medical care on behalf of a recipient of medical assistance because
of any sickness, injury, disease or disability, and another person
is legally liable for such expense, either pursuant to contract,
negligence or otherwise, the Department of Health and Human
Resources shall have a right to recover full reimbursement from any
award or settlement for such medical assistance from such other
person or from the recipient of such assistance if he
or she has
been reimbursed by the other person. The department shall be
legally assigned the rights of the recipient against the person so
liable, but only to the extent of the reasonable value of the medical assistance paid and attributable to the sickness, injury,
disease or disability for which the recipient has received damages.
When an action or claim is brought by a medical assistance
recipient or by someone on his or her behalf against a third party
who may be liable for the injury, disease, disability or death of
a medical assistance recipient, any settlement, judgment or award
obtained is subject to the claim of the Department of Health and
Human Resources for reimbursement of an amount sufficient to
reimburse the department the full amount of benefits paid on behalf
of the recipient under the medical assistance program for the
injury, disease, disability or death of the medical assistance
recipient. The claim of the Department of Health and Human
Resources assigned by such recipient shall not exceed the amount of
medical expenses for the injury, disease, disability or death of
the recipient paid by the department on behalf of the recipient.
The right of subrogation created in this section includes all
portions of the cause of action, by either settlement, compromise,
judgment or award, notwithstanding any settlement allocation or
apportionment that purports to dispose of portions of the cause of
action not subject to the subrogation. Any settlement, compromise,
judgment or award that excludes or limits the cost of medical
services or care shall not preclude the Department of Health and
Human Resources from enforcing its rights under this section. The
secretary may compromise, settle and execute a release of any such claim, in whole or in part.
(b) Nothing in this section shall be construed so as to
prevent the recipient of medical assistance from maintaining an
action for injuries received by him
or her against any other person
and from including therein, as part of the compensatory damages
sought to be recovered, the amount or amounts of his or her medical
expenses, even though such person received medical assistance in
the payment of such medical expenses, in whole or in part.
If the action be tried by a jury, the jury shall not be
informed as to the interest of the Department of Health and Human
Resources, if any, and such fact shall not be disclosed to the jury
at any time. The trial judge shall, upon the entry of judgment on
the verdict, direct that an amount equal to the amount of medical
assistance given be withheld and paid over to the Department of
Health and Human Resources. Irrespective of whether the case be
terminated by judgment or by settlement without trial, from the
amount required to be paid to the Department of Health and Human
Resources there shall be deducted the attorney fees attributable to
such amount in accordance with and in proportion to the fee
arrangement made between the recipient and his or her attorney of
record so that the department shall bear the pro rata portion of
such attorney fees. Nothing in this section shall preclude any
person who has received medical assistance from settling any cause
of action which he
or she may have against another person and delivering to the Department of Health and Human Resources, from
the proceeds of such settlement, the sums received by him or her
from the department or paid by the department for his or her
medical assistance. If such other person is aware of or has been
informed of the interest of the Department of Health and Human
Resources in the matter, it shall be the duty of the person to
whose benefit the release inures to withhold so much of the
settlement as may be necessary to reimburse the department to the
extent of its interest in the settlement. No judgment, award of or
settlement in any action or claim by a medical assistance recipient
to recover damages for injuries, disease or disability, in which
the Department of Health and Human Resources has interest, shall be
satisfied without first giving the department notice and reasonable
opportunity to establish its interest. The department shall have
sixty days from receipt of such written notice to advise the
recipient or his or her representative in writing of the
department's desire to establish its interest through the
assignment. If no such written intent is received within the
sixty-day period, then the recipient may proceed and in the event
of full recovery forward to the department the portion of the
recovery proceeds less the department's share of attorney's fees
and costs expended in the matter. In the event of less than full
recovery the recipient and the department shall agree as to the
amount to be paid to the department for its claim. If there is no recovery, the department shall under no circumstances be liable for
any costs or attorney's fees expended in the matter. If, after
being notified in writing of a subrogation claim and possible
liability of the recipient, guardian, attorney or personal
representative for failure to subrogate the department, a
recipient, his or her guardian, attorney or personal representative
disposes of the funds representing the judgment, settlement or
award, without the written approval of the department, that person
shall be liable to the department for any amount that, as a result
of the disposition of the funds, is not recoverable by the
department. In the event that a controversy arises concerning the
subrogation claims by the department, an attorney shall interplead,
pursuant to rule twenty-two of the Rules of Civil Procedure, the
portion of the recipient's settlement that will satisfy the
department exclusive of attorney's fees and costs regardless of any
contractual arrangement between the client and the attorney.
(c) Nothing contained herein shall authorize the Department of
Health and Human Resources to institute a class action or multiple
plaintiff action against any manufacturer, distributor or vendor of
any product to recover medical care expenditures paid for by the
Medicaid program.
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(NOTE: The purpose of this bill is to exempt life insurance
policies with a death benefit of $25,000 or less from assignment by
Medicaid recipients to the Department of Health and Human
Resources.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.)