ENROLLED
COMMITTEE SUBSTITUTE
FOR
H. B. 2578
(By Mr. Speaker, Mr. Chambers, and Delegate Ashley)
[By Request of the Executive]
[Passed March 11, 1995; in effect ninety days from passage.]
AN ACT to amend and reenact section two, article one, chapter
nine of the code of West Virginia, one thousand nine hundred
thirty-one, as amended; to amend and reenact sections eleven
and eleven-a, article five of said chapter; and to further
amend said article by adding thereto a new section,
designated section eleven-c, all relating to definitions,
assignment of rights, right of assignment to department of
health and human resources to rights of recipients of
medical assistance in certain cases, designation of damages
in certain cases, requirement that department provide notice
to perfect assignment, and right of the department of health
and human resources to recover from the estates of
recipients of medical assistance.
Be it enacted by the Legislature of West Virginia:
That section two, article one, chapter nine of the code of West Virginia, one thousand nine hundred thirty-one, as amended,
be amended and reenacted; that sections eleven and eleven-a,
article five of said chapter be amended and reenacted; and that
article five of said chapter be further amended by adding thereto
a new section, designated section eleven-c, all to read as
follows:
ARTICLE 1. LEGISLATIVE PURPOSE AND DEFINITIONS.
§9-1-2. Definitions.
The following words and terms when used in this chapter
shall have the meaning hereafter ascribed to them unless the
context clearly indicates a different meaning, and any amendment
of this section shall apply to any verdict, settlement,
compromise or judgment entered after the effective date of the
amendments to this section enacted during the regular session of
the Legislature, one thousand nine hundred ninety-five.
(a) The term "department" means the state division of human
services.
(b) The term "commissioner" means the commissioner of human
services.
(c) The term "federal-state assistance" means and includes
(1) all forms of aid, care, assistance and services to or on
behalf of persons, which are authorized by, and who are
authorized to receive the same under and by virtue of,
subchapters one, four, five, ten, fourteen, sixteen, eighteen and nineteen, chapter seven, Title 42, United States Code, as those
subchapters have heretofore been and may hereafter be amended,
supplemented and revised by acts of Congress, and as those
subchapters so amended, supplemented and revised have heretofore
been and may hereafter be supplemented by valid rules and
regulations promulgated by authorized federal agents and
agencies, and as those subchapters so amended, supplemented and
revised have heretofore been and may hereafter be supplemented by
rules and regulations promulgated by the state division of human
services, which division rules and regulations shall be
consistent with federal laws, rules and regulations, but not
inconsistent with state law, and (2) all forms of aid, care,
assistance and services to persons, which are authorized by, and
who are authorized to receive the same under and by virtue of,
any act of Congress, other than the federal Social Security Act,
as amended, for distribution through the state division of human
services to recipients of any form of aid, care, assistance and
services to persons designated or referred to in (1) of this
definition and to recipients of state assistance, including by
way of illustration, surplus food and food stamps, which Congress
has authorized the secretary of agriculture of the United States
to distribute to needy persons.
(d) The term "federal assistance" means and includes all
forms of aid, care, assistance and services to or on behalf of persons, which are authorized by, and who are authorized to
receive the same under and by virtue of, any act of Congress for
distribution through the state division of human services, the
cost of which is paid entirely out of federal appropriations.
(e) The term "state assistance" means and includes all forms
of aid, care, assistance, services and general relief made
possible solely out of state, county and private appropriations
to or on behalf of indigent persons, which are authorized by, and
who are authorized to receive the same under and by virtue of,
state division of human services' rules and regulations.
(f) The term "welfare assistance" means the three classes of
assistance administered by the state division of human services,
namely: Federal-state assistance, federal assistance and state
assistance.
(g) The term "indigent person" means any person who is
domiciled in this state and who is actually in need as defined by
department rules and regulations and has not sufficient income or
other resources to provide for such need as determined by the
state division of human services.
(h) The term "domiciled in this state" means being
physically present in West Virginia accompanied by an intention
to remain in West Virginia for an indefinite period of time, and
to make West Virginia his or her permanent home. The state
division of human services may by rules and regulations supplement the foregoing definition of the term "domiciled in
this state", but not in such a manner as would be inconsistent
with federal laws, rules, and regulations applicable to and
governing federal-state assistance.
(i) The term "medical services" means medical, surgical,
dental and nursing services, and other remedial services
recognized by law, in the home, office, hospital, clinic and any
other suitable place, provided or prescribed by persons permitted
or authorized by law to give such services; such services to
include drugs and medical supplies, appliances, laboratory,
diagnostic and therapeutic services, nursing home and
convalescent care and such other medical services and supplies as
may be prescribed by such persons.
(j) The term "general relief" means cash or its equivalent
in services or commodities expended for care and assistance to an
indigent person other than for care in a county infirmary, child
shelter or similar institution.
(k) The term "secretary" means the secretary of the
department of health and human resources.
(l) The term "estate" means all real and personal property
and other assets included within the individual's estate as
defined in the state's probate law.
(m) The term "services" means nursing facility services,
home and community-based services, and related hospital and prescription drug services for which an individual received
medicaid medical assistance.
§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.
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 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 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 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 attorneys 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 attorneys 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.
§9-5-11a. Notice of action or claim.
If either the medical assistance recipient or the department
of health and human resources brings an action or claim against
a third person, the recipient, his attorney or such department
shall, within thirty days of filing the action, give to the other
written notice of the action or claim by certified mail. This
notice shall contain the name of the third person and the court
in which the action is brought. If the department of health and
human resources institutes said action, the notice shall advise
the recipient of their right to bring such action in their own
name, in which they may include as a part of their claim the sums
claimed by such department. Proof of such notice shall be filed
in said action subject to the notice and intent procedure as
outlined in section eleven of this article. If an action or
claim is brought by either the recipient or the department of
health and human resources, the other may, at any time before
trial, become a party to the action, or shall consolidate his action or claim with the other if brought independently:
Provided, That this consolidation or entry as a party does not
delay the proceedings.
§9-5-11c. Right of the department of health and human resources
to recover medical assistance.
(a) Upon the death of a person who was fifty-five years of
age or older at the time the person received welfare assistance
consisting of nursing facility services, home and community-based
services, and related hospital and prescription drug services,
the department of health and human resources, in addition to any
other available remedy, may file a claim or lien against the
estate of the recipient for the total amount of medical
assistance provided by medicaid for nursing facility services,
home and community-based services, and related hospital and
prescription drug services provided for the benefit of the
recipient. Claims so filed shall be classified as and included
in the class of debts due the state.
(b) The department may recover pursuant to subsection (a)
only after the death of the individual's surviving spouse, if any
and only after such time as the individual has no surviving
children under the age of twenty-one, or when the individual has
no surviving children who meet the Social Security Act's
definition of blindness or permanent and total disability.
(c) The state shall have the right to place a lien upon the property of individuals who are inpatients in a nursing facility,
intermediate care facility for the mentally retarded, or other
medical institution who, after notice and an opportunity for a
hearing, the state has deemed to be permanently
institutionalized. This lien shall be in an amount equal to
medicaid expenditures for services provided by a nursing
facility, intermediate care facility for the mentally retarded or
other medical institution, and shall be rendered against the
proceeds of the sale of property except for a minimal amount
reserved for the individual's personal needs. Any such lien shall
dissolve upon that individual's discharge from the medical
institution. The secretary has authority to compromise or
otherwise reduce the amount of this lien in cases where
enforcement would create a hardship.
(d) No lien may be imposed on such individual's home when the
home is the lawful residence of: (1) The spouse of the
individual; (2) the individual's child who is under the age of
twenty-one; (3) the individual's child meets the Social Security
Act's definition of blindness or permanent and total disability;
or (4) the individual's sibling has an equity interest in the
home and was residing in the home for a period of at least one
year immediately before the date of the individual's admission to
a medical institution.
(e) The filing of a claim, pursuant to this section, shall neither reduce nor diminish the general claims of the department
of health and human resources, except that such department shall
not receive double recovery for the same expenditure. The death
of the recipient shall neither extinguish nor diminish any right
of such department to recover. Nothing in this section affects
or prevents a proceeding to enforce a lien pursuant to this
section or a proceeding to set aside a fraudulent conveyance.
(f) Any claim or lien imposed pursuant to this section is
effective for the full amount of medical assistance provided by
medicaid for nursing facility services, home and community-based
services, and related hospital and prescription drug services.
Said lien attaches and is perfected automatically as of the
beginning date of medical assistance, the date when a recipient
first receives treatment for which the department of health and
human resources may be obligated to provide medical assistance.
A claim may be waived by such department, if such department
determines, pursuant to applicable federal law and rules and
regulations, that the claim will cause substantial hardship to
the surviving dependents of the deceased.
(g) Upon the effective date of this section, the attorney
general, on behalf of the state of West Virginia, shall commence
an action in a court of competent jurisdiction to test the
validity, constitutionality, and the ability of the Congress of
the United States to mandate the implementation of this section. This subsection does not limit the right of others, including
recipients, to intervene in any litigation, nor does it limit the
discretion of the attorney general or appropriate counsel to seek
affected persons to act as parties to the litigation, either
individually or as a class.