Committee Substitute
House Bill 4655 History
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COMMITTEE SUBSTITUTE
FOR
H. B. 4655
(By Delegates Michael, Cann, Foster, Leach,
Stalnaker, Boggs and Proudfoot)
(Originating in the Committee on Banking and Insurance)
[March 1, 2004]
A BILL to amend the code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §5-16B-10, relating
to subrogation rights of the children's health insurance plan;
providing that submission of an application for benefits
through the children's health insurance agency constitutes an
assignment of rights to the agency to recover benefits paid by
the agency; requiring that a jury is not to be informed of the
interest of the agency; providing for the deduction of
attorney fees from the amount paid to the agency; requiring a
person with notice of the interests of the agency to withhold
the amount of settlement proceeds necessary to reimburse the
agency; and, imposing liability on persons who fail to
reimburse the agency.
Be it enacted by the Legislature of West Virginia:
That the code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §5-16B-10, to read as
follows:
ARTICLE 16B. WEST VIRGINIA CHILDREN'S HEALTH INSURANCE PROGRAM.
§5-16B-10. Assignment of rights; right of subrogation by
children's health insurance agency to the rights
of recipients of medical assistance; rules as to
effect of subrogation.
(a) Submission of an application to the children's health
insurance agency 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 children's health insurance agency services paid for
by the children's health insurance agency program. This assignment
of rights does not extend to medicare benefits. At the time the
application is made, the children's health insurance agency shall
include a statement along with the application that explains that
the applicant has assigned his or her rights and the legal
implications of making an 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 the expense, either pursuant to contract,
negligence or otherwise, the children's health insurance agency shall have a right to recover full reimbursement from any award or
settlement for the medical assistance from the other person, or
from the recipient of the assistance if he or she has been
reimbursed by the other person. The children's health insurance
agency 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 children's health insurance agency for reimbursement of an
amount sufficient to reimburse the children's health insurance
agency 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 children's health insurance agency assigned by the recipient
may not exceed the amount of medical expenses for the injury,
disease, disability or death of the recipient paid by the
children's health insurance agency 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 does not preclude the children's health insurance
agency from enforcing its rights under this section. The
children's health insurance agency may compromise, settle and
execute a release of any 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 them 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 the person received medical assistance in the
payment of the medical expenses, in whole or in part.
If the action be tried by a jury, the jury is not to be
informed as to the interest of the children's health insurance
agency, if any, and the fact is not to 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 children's health
insurance agency. Irrespective of whether the case be terminated
by judgment or by settlement without trial, from the amount
required to be paid to the children's health insurance agency there shall be deducted the attorney fees attributable to the 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
children's health insurance agency shall bear the pro rata portion
of the 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 children's health insurance agency, from the
proceeds of the settlement, the sums received by him or her from
the children's health insurance agency or paid by the children's
health insurance agency for his or her medical assistance. If the
other person is aware of or has been informed of the interest of
the children's health insurance agency 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 children's health insurance agency 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
children's health insurance agency has interest, shall be satisfied
without first giving the children's health insurance agency notice
and reasonable opportunity to establish its interest. The
children's health insurance agency shall have sixty days from
receipt of written notice to advise the recipient or his or her representative in writing of the children's health insurance
agency's desire to establish its interest through the assignment.
If no written intent is received within the sixty-day period, then
the recipient may proceed and in the event of full recovery forward
to the children's health insurance agency the portion of the
recovery proceeds less the children's health insurance agency's
share of attorney's fees and costs expended in the matter. In the
event of less than full recovery the recipient and the children's
health insurance agency shall agree as to the amount to be paid to
the children's health insurance agency for its claim. If there is
no recovery, the children's health insurance agency 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 children's health insurance agency, 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 children's health insurance agency,
that person shall be liable to the children's health insurance
agency for any amount that, as a result of the disposition of the
funds, is not recoverable by the children's health insurance
agency. In the event that a controversy arises concerning the
subrogation claims by the children's health insurance agency, 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 children's health insurance agency 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 children's
health insurance agency to institute a class action or multiple
plaintiff action against any manufacturer, distributor or vendor of
any product to recover children's health insurance agency care
expenditures paid for by the children's health insurance agency
program.