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Introduced Version House Bill 2578 History

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Key: Green = existing Code. Red = new code to be enacted
H. B. 2578


(By Mr. Speaker, Mr. Chambers, and Delegate Ashley)
[By Request of the Executive]
[Introduced February 21, 1995; referred to the
Committee on Finance.]



A BILL 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 section eleven, article five of said chapter; and to further amend article five of said chapter by adding thereto a new section, designated section eleven-c, all relating to definitions, assignment of rights, right of subrogation by department of health and human resources to rights of recipients of medical assistance, rules as to effect of subrogation, 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 section eleven, 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 as 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 amendment.
(a) The term "department" shall mean means the state department of welfare division of human services.
(b) The term "commissioner" shall mean means the commissioner of welfare human services.
(c) The term "federal-state assistance" shall mean means and include 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 department of welfare division of human services, which department 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 department of welfare 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" shall mean means and include 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 department of welfare division of human services, the cost of which is paid entirely out of federal appropriations.
(e) The term "state assistance" shall mean means and include 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, department state division of human services' rules and regulations.
(f) The term "welfare assistance" shall mean means the three classes of assistance administered by the department state division of human services, namely: Federal-state assistance, federal assistance and state assistance.
(g) The term "indigent person" shall mean 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 department state division of human services.
(h) The term "domiciled in this state" shall mean 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 department 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" shall mean 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 "physician provider" means an allopathic or osteopathic physician, rendering services within this state and receiving reimbursement, directly as an individual provider or indirectly as an employee or agent of a medical clinic, partnership or other business entity.
(l) The term "nurse practitioner" means a registered nurse qualified by virtue of his or her education and credentials and approved by the West Virginia board of examiners for registered professional nurses to practice as an advanced practice nurse independently or in a collaborative relationship with a physician.
(m) The term "nurse-midwife" means a qualified professional nurse registered with the West Virginia board of examiners for registered professional nurses who by virtue of additional training is specifically qualified to practice nurse-midwifery according to the statement of standards for the practice of nurse-midwifery as set forth by the American college of nurse-midwives.
(n) The term "physician assistant" means an assistant to a physician who is a graduate of an approved program of instruction in primary health care or surgery, has attained a baccalaureate or master's degree, has passed the national certification examination and is qualified to perform direct patient care services under the supervision of a physician.
(o) The term "secretary" means the secretary of the department of health and human resources.
(p) The term "single state agency" means the single state agency for medicaid in this state.
(q) The term "ambulance service provider" means a person rendering ambulance services within this state and receiving reimbursement, directly as an individual provider or indirectly as an employee or agent of a medical clinic, partnership or other business entity.
(r) The term "general health care provider" means an audiologist, a behavioral health center, a chiropractor, a community care center, an independent laboratory, an independent X-ray service, an occupational therapist, an optician, an optometrist, a physical therapist, a podiatrist, a private duty nurse, a psychologist, a rehabilitative specialist, a respiratory therapist and a speech therapist rendering services within this state and receiving reimbursement, directly as an individual provider or indirectly as an employee or agent of a medical clinic, partnership or other business entity.
(s) The term "inpatient hospital services provider" means a provider of inpatient hospital services for purposes of Section 1903(w) of the Social Security Act.
(t) The term "intermediate care facility for the mentally retarded services provider" means a provider of intermediate care facility services for the mentally retarded for purposes of Section 1903(w) of the Social Security Act.
(u) The term "nursing facility services provider" means a provider of nursing facility services for purposes of Section 1903(w) of the Social Security Act.
(v) The term "outpatient hospital service provider" means a hospital providing preventative, diagnostic, therapeutic, rehabilitative or palliative services that are furnished to outpatients.
(w) The term "subrogation" means a statutory right of reimbursement in which the principles precedent for recovery at equity or common law do not apply, so that reimbursement is given first priority regardless of whether the injured party is made whole or whether other creditors are paid.
(x) The term "full reimbursement" means the department of health and human resources' right of recovery of all amounts of medical assistance paid by medicaid on behalf of the recipient regardless of whether the recipient is made whole.
(y) The term "estate" means all real and personal property and other assets included within the individual's estate as defined in this state's probate law.
(z) 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 care services paid for by the medicaid program. This assignment of rights does not extend to medicare benefits. 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 subrogated to 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. Equities of a recipient, legal representative, creditor, provider or any person cannot reduce or prorate this right to recovery by the department of health and human resources. The subrogation claim of the department of health and human resources 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 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. Any release given by a person who has received medical assistance to another person releasing such other person of liability with respect to any cause of action shall be binding upon the department of health and human resources if the person for whose benefit the release inures is unaware of, or has not been informed of, the interest of the department therein. 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. 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.
§9-5-11c. Right of the department of health and human resources

to recover medical assistance.

(a) Upon the death of a person, who 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 the benefit of the recipient. Claims so filed shall be classified as and included in the class of debts due the state.
(b) The state shall have the right to place a lien upon the property of individuals 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. The secretary has authority to compromise or otherwise reduce the amount of this lien in cases where enforcement would create a hardship.
(c) 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.
(d) Any claim or lien imposed pursuant to this section is effective for the full amount of medical assistance provided by medicaid and cannot be reduced by a court on principles of equity. 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 decreased.



NOTE: The purpose of this bill is to amend the subrogation rights of the Department of Health and Human Resources with regard to recipients of medical assistance, establish an assignment of rights to recovery by the Department and the right of the Department to recover from the estates of such recipients, and define terms, all for the purpose of compliance with federal requirements.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.

Section eleven-c, article five, chapter nine, is new; therefore strike-throughs and underscoring have been omitted.
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