HB2512 H&HR AM 3-11

CR 3338 

    The Committee on Health and Human Resources move to amend the bill on page two, line six, by striking everything after the enacting clause and inserting in lieu thereof the following:

    “That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new article, designated §9-8-1, §9-8-2, §9-8-3, §9-8-4 and §9-8-5, all to read as follows:

ARTICLE 8. ASSIGNMENT AND SUBROGATION OF CLAIMS FOR REIMBURSEMENT FOR MEDICAID SERVICES

§9-8-1. Definitions.

    For purposes of this article:

    (1) "Bureau" means the Bureau for Medical Services.

    (2) "Department" means the West Virginia Department of Health and Human Resources.

    (3) "Recipient" means a person who applies for and receives assistance under the Medicaid Program.

    (4) "Secretary" means the Secretary of the Department of Health and Human Resources.

    (5) "Third-party" means an individual or entity that is alleged to be liable to pay all or part of the costs of a recipient's medical treatment and medical-related services for personal injury, disease, illness or disability, as well as any entity including, but not limited to, a business organization, health service organization, insurer, or public or private agency acting by or on behalf of the allegedly liable third-party.

§9-8-2. Assignment of rights; right of subrogation by the      department.

    (a) Assignment of rights. Submission of an application to the department for medical assistance is, as a matter of law, an assignment of the right of the applicant or his or her legal representative to recover from third parties past medical expenses paid for by the Medicaid program.

    (1) At the time an application for medical assistance is made, the department shall include a statement along with the application that explains that the applicant has assigned all of his or her rights as provided in this section and the legal implications of making this assignment.

    (2) This assignment of rights does not extend to Medicare benefits.

    (3) This section does not prevent the recipient or his or her legal representative from maintaining an action for injuries or damages sustained by the recipient against any third-party and from including, as part of the compensatory damages sought to be recovered, the amounts of his or her past medical expenses.

    (4) The department shall be legally subrogated to the rights of the recipient against the third party.

    (5) The department shall have a priority right to be paid first out of any payments made to the recipient for past medical expenses before the recipient can recover any of his or her own costs for medical care.

    (6) A recipient is considered to have authorized all third-parties to release to the department information needed by the department to secure or enforce its rights as assignee under this chapter.

    (b) Notice requirement for claims and civil actions.

    (1) A recipient's legal representative shall provide notice to the department within 60 days of asserting a claim against a third party. If the claim is asserted in a formal civil action, the recipient's legal representative shall notify the department within 60 days of service of the complaint and summons upon the third party by causing a copy of the summons and a copy of the complaint to be served on the department as though it were named a party defendant.

    (2) If the recipient has no legal representative and the third party knows or reasonably should know that a recipient has no representation then the third party shall provide notice to the department within 60 days of receipt of a claim.

    (3) In any civil action implicated by this section, the department may file a notice of appearance and shall thereafter have the right to file and receive pleadings, intervene and take other action permitted by law.

    (4) The department shall provide the recipient notice of the amount of the purported subrogation lien within 30 days of receipt of notice of the claim. The department shall provide related supplements in a timely manner.

    (c) Notice of settlement requirement.

    (1) A recipient or his or her representative shall notify the department of a settlement with a third-party and retain in escrow an amount equal to the amount of the subrogation lien asserted by the department. The notification shall include the amount of the settlement being allocated for past medical expenses paid for by the Medicaid program. Within 30 days of the receipt of any such notice, the department shall notify the recipient of its consent or rejection of the proposed allocation. If the department consents, the recipient or his or her legal representation shall issue payment out of the settlement proceeds in a manner directed by the Secretary or his or her designee within 30 days of consent to the proposed allocation.

    (2) If the total amount of the settlement is less than the department’s subrogation lien, then the settling parties shall obtain the department’s consent to the settlement before finalized the settlement. The department shall advise the parties within 30 days and provide a detailed itemization of all past medical expenses paid by the department on behalf of the recipient for which the department seeks reimbursement out of the settlement proceeds.

    (3) If the department rejects the proposed allocation, the department shall seek a judicial determination within 30 days and provide a detailed itemization of all past medical expenses paid by the department on behalf of the recipient for which the department seeks reimbursement out of the settlement proceeds.

    (A) If judicial determination becomes necessary, the trial court is required to hold an evidentiary hearing. The recipient and the department shall be provided ample notice of the same and be given just opportunity to present the necessary evidence, including fact witness and expert witness testimony, to establish the amount to which the department is entitled to be reimbursed pursuant to this section.

    (B) The department shall have the burden of proving by a preponderance of the evidence that the allocation agreed to by the parties was improper. For purposes of appeal, the trial court's decision should be set forth in a detailed order containing the requisite findings of fact and conclusions of law to support its rulings.

    (4) Any settlement by a recipient with one or more third-parties which would otherwise fully resolve the recipient's claim for an amount collectively not to exceed $20,000 shall be exempt from the provisions of this section.

    (5) Nothing herein prevents a recipient from seeking judicial intervention to resolve any dispute as to allocation prior to effectuating a settlement with a third party.

    (d) If the department fails to appropriately respond to a notification of settlement, the amount to which the department is entitled to be paid from the settlement shall be limited to the amount of the settlement the recipient has allocated toward past medical expenses.

    (e) Penalty for failure to notify the department. A legal representative acting on behalf of a recipient or third party that fails to comply with the provisions of this section is liable to the department for all reimbursement amounts the department would otherwise have been entitled to collect pursuant to this section but for the failure to comply. Under no circumstances may a pro se recipient be penalized for failing to comply with the provisions of this section.

    (f) Miscellaneous provisions relating to trial.

    (1) Where an action implicated by this section is tried by a jury, the jury may not be informed at any time as to the subrogation lien of the department.

    (2) Where an action implicated by this section is tried by judge or jury, the trial judge shall, or in the instance of a jury trial, require that the jury, identify precisely the amount of the verdict awarded that represents past medical expenses.

    (3) Upon the entry of judgment on the verdict, the court shall direct that upon satisfaction of the judgment any damages awarded for past medical expenses be withheld and paid directly to the department, not to exceed the amount of past medical expenses paid by the department on behalf of the recipient.

    (g) Attorneys' fees. Irrespective of whether an action or claim is terminated by judgment or settlement without trial, from the amount required to be paid to the department there shall be deducted the reasonable costs and attorneys' fees attributable to the 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 share of the reasonable costs and attorneys' fees: Provided, that if there is no recovery, the department shall under no circumstances be liable for any costs or attorneys' fees expended in the matter.

    (h) Class actions and multiple plaintiff actions not authorized. Nothing in this article shall authorize the department 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.

    (i) Secretary's authority. The Secretary or his or her designee may compromise, settle and execute a release of any claim relating to the department's right of subrogation, in whole or in part.

§9-8-3. Release of information.

    (a) A recipient is considered to have authorized all third parties to release to the department information needed by the department to secure or enforce its rights as assignee under this chapter.

    (b) As a condition of doing business in the state, health insurers, including self-insured plans, group health plans as defined in §6074(a) of the Employee Retirement Income Security Act of 1974, service benefit plans, third-party administrators, managed care organizations, pharmacy benefit managers or other parties that are by statute, contract or agreement, legally responsible for payment of a claim for a health care item or service are required to comply with the following:

    (1) Upon the request of the bureau, or its contractor, provide information to determine the period that the service recipients, their spouse or dependents may be or may have been covered by the health insurer, including the nature of the coverage that is or was provided by the health insurer, the name, address, date of birth, Social Security number, group number, identifying number of the plan, and effective and termination dates. The information shall be provided in a format suitable for electronic data matches, conducted under the direction of the department, no less than monthly or as prescribed by the secretary. The health insurer shall respond within sixty working days after receipt of a written request for enrollment data from the department or its contractor;

    (2) Accept the right of the bureau of recovery and the assignment to the state of any right of an individual or other entity to payment from the party for an item or service for which payment has been made by the bureau;

    (3) Respond to any inquiry by the bureau regarding a claim for payment for any health care item or service that is submitted not later than three years after the date of the provision of the health care item or service; and

    (4) Accept a claim submitted by the bureau regardless of the date of submission of the claim, the type or format of the claim form, lack of preauthorization or the failure to present proper documentation at the point-of-sale that is the basis of the claim: Provided, That the claim is submitted by the bureau within the three-year period beginning on the date on which the item or service was furnished and any action by the bureau to enforce its right with respect to the claim is commenced within six years of the bureau’s submission of the claim.

§9-8-4. Right of the department 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, 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 individuals with an intellectual disability 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 individuals with an intellectual disability 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. A lien dissolves 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) A lien may not be imposed on an 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, neither reduces or diminishes the general claims of the department, except that the department may not receive double recovery for the same expenditure. The death of the recipient neither extinguishes or diminishes any right of the 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. The 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 may be obligated to provide medical assistance. A claim may be waived by the department, if the 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.

§9-8-5. Previous judicial applications.

    Case law previously applicable to article five, section 11, 11a, 11b and 11c of this chapter is applicable to this article unless in conflict with these provisions.