ENROLLED
Senate Bill No. 772
(By Senator Prezioso)
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[Passed March 11, 2006; in effect ninety days from passage.]
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AN ACT to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §16-5Q-4, relating to
subrogation rights of the Department of Health and Human
Resources on behalf of the James "Tiger" Morton Catastrophic
Illness Commission from personal insurance or other sources;
legal assignment of rights; setting forth effect of
subrogation; allowing action for compensatory damages; notice
to the Department of Health and Human Resources of intent to
enter judgment, award or settlement; giving the Department of
Health and Human Resources right to assert interest through
assignment; and providing for attorney fees.
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 §16-5Q-4, to read as
follows:
ARTICLE 5Q. THE JAMES "TIGER" MORTON CATASTROPHIC ILLNESS FUND.
§16-5Q-4. Assignment of rights; right of subrogation by the James
"Tiger" Morton Catastrophic Illness Commission to the rights
of recipients of medical assistance; rules as to effect of
subrogation.
(a) (1) Submission of an application to the Catastrophic
Illness Commission 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
Catastrophic Illness Commission's Medical Assistance Program.
(2) At the time the application is made, the Catastrophic
Illness Commission shall include a statement along with such
application that explains that the applicant has assigned all such
rights to the Catastrophic Illness Commission, and the legal
implications of making such assignment as provided in this section.
(3) If medical assistance is paid or will be paid by the
Catastrophic Illness Commission to a provider of medical care on
behalf of a recipient of medical assistance because of a
"catastrophic illness", as defined by this article, and another
person is legally liable for such expense, either pursuant to
contract, negligence or otherwise, the Department of Health and
Human Resources, on behalf of the Catastrophic Illness Commission,
shall have the 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 of Health and Human Resources
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 catastrophic
illness for which the recipient has received damages.
(4) 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 catastrophic illness 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, on behalf of the Catastrophic Illness Commission
for reimbursement of an amount sufficient to reimburse the
Department of Health and Human Resources the full amount of
benefits paid on behalf of the recipient under the Catastrophic
Illness Commission's Medical Assistance Program for the
catastrophic illness of the medical assistance recipient. The claim
of the Department of Health and Human Resources on behalf of the
Catastrophic Illness Commission, assigned by such recipient shall
not exceed the amount of medical expenses for the catastrophic
illness of the recipient paid by the Department of Health and Human
Resources 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, judgement or award
that excludes or limits the cost of actual medical services or care
shall not preclude the Department of Health and Human Resources
from enforcing its rights under this section. The Secretary of the
Department of Health and Human Resources may compromise, settle and
execute a release of any such claim in whole or in part.
(b) (1) 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.
(2) 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 on behalf of the Catastrophic Illness Commission, 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 by the commission be withheld and paid over to the Department
of Health and Human Resources on behalf of the commission. 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 on behalf of the
Catastrophic Illness Commission, 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 of Health and
Human Resources 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 or she 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 commission or
paid by the commission 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 on behalf of the
commission 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 of
Health and Human Resources, 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 or his representative to
recover damages for a catastrophic illness or death, in which the
Department of Health and Human Resources on behalf of the commission has an interest, shall be satisfied without first giving
the Department of Health and Human Resources notice and reasonable
opportunity to establish its interest. The Department of Health and
Human Resources shall have sixty days from the receipt of such
written notice to advise the recipient or his or her representative
in writing of its 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 of Health and Human Resources
the portion of the recovery proceeds less the Department of Health
and Human Resources'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 of Health and Human Resources shall
agree as to the amount to be paid to it for its claim. If there is
no recovery, the Department of Health and Human Resources shall
under no circumstances be liable for any costs or attorney 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 of Health and Human Resources, 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 of Health and
Human Resources, that person shall be liable to the Department of Health and Human Resources for any amount that, as a result of the
disposition of the funds, is not recoverable by the Department of
Health and Human Resources. In the event that a controversy arises
concerning the subrogation claims by the Department of Health and
Human Resources, an attorney shall interplead, pursuant to Rule 22
of the Rules of Civil Procedure, the portion of the recipient's
settlement that will satisfy the Department of Health and Human
Resources exclusive of attorney 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 or the Catastrophic Illness Commission
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 Catastrophic Illness
Commission's Medical Assistance Program.