Senate Bill No. 468
(By Senators Tomblin, Mr. President, and Boley,
By Request of the Executive)
[Introduced February 20, 1995; referred to the Committee
on the Judiciary; and then 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 said
article 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 said article 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.
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
(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
(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
(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
(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
(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
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
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 deceased.
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
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.