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Introduced Version Senate Bill 521 History

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Senate Bill No. 521

(By Senators Prezioso and Snyder)

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[Introduced February 6, 2012; referred to the Committee on the Judiciary; and then to the Committee on Finance.]

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A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §5-16-27, relating to the subrogation rights of the Public Employees Insurance Agency to recover claims paid on behalf of covered employees and dependents.

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 §5-16-27, to read as follows:

ARTICLE 16. WEST VIRGINIA PUBLIC EMPLOYEES INSURANCE ACT.

§5-16-27. Assignment of rights; right of subrogation by Public Employees Insurance Agency to the rights of covered employee or covered dependents; rules as to effect of subrogation.

    (a) Submission of enrollment forms for health benefits coverage to the Public Employees Insurance Agency is, as a matter of law, an assignment of the right of the covered employee or covered dependent 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 or drugs paid for by the Public Employees Insurance Agency medical or drug plans. This assignment of rights does not extend to Medicare benefits: Provided, That the first $25,000 of the death benefit of a life insurance policy is exempt from assignment under the provisions of this section. At the time the employee enrolls and each plan year thereafter, the Public Employees Insurance Agency shall include a statement in the plan coverage materials provided to the employee that explains that the covered employee or covered dependent has assigned all such rights, and the legal implications of making such assignment of rights as provided in this section. If medical or drug claims are paid or will be paid to a provider of medical care on behalf of a covered employee or covered dependent 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 Public Employees Insurance Agency shall have a right to recover full reimbursement from any award or settlement for related damages from such other person or from the covered employee or covered dependent if he or she has been reimbursed by the other person. The Public Employees Insurance Agency shall be legally assigned the rights of the covered employee or covered dependent against the person so liable, but only to the extent of the reasonable value of the medical and drug claims paid and attributable to the sickness, injury, disease or disability for which the covered employee or covered dependent has received damages. When an action or claim is brought by a covered employee or covered dependent 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 covered employee or covered dependent, any settlement, judgment or award obtained is subject to the claim of the Public Employees Insurance Agency for reimbursement of an amount sufficient to reimburse the Public Employees Insurance Agency the full amount of medical and drugs claims paid on behalf of the covered employee or covered dependent under the Public Employees Insurance Agency plans for the injury, disease, disability or death of the covered employee or covered dependent. The claim of the Public Employees Insurance Agency assigned by such covered employee or covered dependent shall not exceed the amount of medical and drug expenses for the injury, disease, disability or death of the covered employee or covered dependent paid by the Public Employees Insurance Agency on behalf of the covered employee or covered dependent. The right of subrogation provided 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 or drug services or care shall not preclude the Public Employees Insurance Agency from enforcing its rights under this section. The director may compromise, settle and execute a release of any such claim, in whole or in part.

    (b) Nothing in this section may be construed so as to prevent the covered employee or covered dependent 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 Public Employees Insurance Agency plan benefits 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 Public Employees Insurance Agency, 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 Public Employees Insurance Agency benefits paid be withheld and paid over to the Public Employees 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 Public Employees Insurance Agency there shall be deducted the attorney fees attributable to such amount in accordance with and in proportion to the fee arrangement made between the covered employee or covered dependent and his or her attorney of record so that the Public Employees Insurance Agency shall bear the pro rata portion of such attorney fees. Nothing in this section shall preclude any person who has received Public Employees Insurance Agency benefits from settling any cause of action which he or she may have against another person and delivering to the Public Employees Insurance Agency, from the proceeds of such settlement, the sums received by him or her from the Public Employees Insurance Agency or paid by the Public Employees Insurance Agency for his or her Public Employees Insurance Agency benefits. If such other person is aware of or has been informed of the interest of the Public Employees 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 Public Employees Insurance Agency to the extent of its interest in the settlement. No judgment, award of or settlement in any action or claim by a Public Employees Insurance Agency covered employee or covered dependent to recover damages for injuries, disease or disability, in which the Public Employees Insurance Agency has interest, shall be satisfied without first giving the Public Employees Insurance Agency notice and reasonable opportunity to establish its interest. The Public Employees Insurance Agency shall have sixty days from receipt of such written notice to advise the covered employee or covered dependent or his or her representative in writing of the desire of the Public Employees Insurance Agency to establish its interest through the assignment. If no such written intent is received within the sixty-day period, then the covered employee or covered dependent may proceed and in the event of full recovery of medical and drug expense damages forward to the Public Employees Insurance Agency the appropriate portion of the recovery proceeds less the Public Employees Insurance Agency's share of attorney's fees and costs expended in the matter. In the event of less than full recovery the covered employee or covered dependent and the Public Employees Insurance Agency shall agree as to the amount to be paid to the Public Employees Insurance Agency for its claim. If there is no recovery, the Public Employees 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 covered employee or covered dependent, guardian, attorney or personal representative for failure to subrogate the Public Employees Insurance Agency, a covered employee or covered dependent, his or her guardian, attorney or personal representative disposes of the funds representing the judgment, settlement or award, without the written approval of the Public Employees Insurance Agency, that person shall be liable to the Public Employees Insurance Agency for any amount that, as a result of the disposition of the funds, is not recoverable by the Public Employees Insurance Agency. In the event that a controversy arises concerning the subrogation claims by the Public Employees Insurance Agency, an attorney shall interplead, pursuant to rule twenty-two of the Rules of Civil Procedure, the portion of the covered employee or covered dependent's settlement that will satisfy the Public Employees 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 by itself authorize the Public Employees Insurance Agency to institute a class action or multiple plaintiff action against any manufacturer, distributor or vendor of any product to recover medical or drug expenditures paid for by the Public Employees Insurance Agency plans.

 


    NOTE: The purpose of this bill is to define subrogation rights and procedures for the West Virginia Public Employees Insurance Agency. 

    §5-16-27 is new, therefore, strike-throughs and underlines have been omitted.

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