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BILL AS INTRODUCED 2007-2008

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H.761

Introduced by   Representative Larson of Burlington

Referred to Committee on

Date:

Subject:  Health; office of Vermont health access; Medicaid liens

Statement of purpose:  This bill proposes to allow the office of Vermont health access to present its recovery claim, prior to a settlement or judgment, for funds expended on behalf of a Medicaid beneficiary.

AN ACT RELATING TO MEDICAID LIENS

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  33 V.S.A. § 1910 is amended to read:

§ 1910.  LIABILITY OF THIRD PARTIES; LIENS

(a)  The agency shall have a lien against a third party, to the extent of the amount paid by the agency for medical expenses, on any recovery for that claim, whether by judgment, compromise, mediation, or settlement, whenever:

(1)  the agency pays medical expenses for or on behalf of a recipient who has been injured or has suffered an illness or disease as a result of negligence; and

(2)  the person recipient asserts a claim against a third party for damages resulting from the injury, illness, or disease.

(b)  The agency shall have a lien against the insurer, to the extent of the amount paid by the agency for medical expenses, on any recovery from the insurer, whenever:

(1)  the agency pays medical expenses or renders medical services on behalf of a person recipient who has been injured or has suffered an injury, illness, or disease; and

(2)  the person recipient asserts a claim against an insurer as a result of the injury, illness, or disease.

(c)  An attorney representing a person who, as a result of injuries, illness or disease suffered as the result of the negligence or wrong of another has received, is receiving or has applied for medical assistance under this subchapter or for residential care provided by the agency at a hospital for the mentally ill or habilitative care center for the developmentally disabled shall, provided the attorney has notice of the receipt or application, notify the agency prior to distribution of the settlement or judgment.

A recipient who has applied for or has received medical assistance under this subchapter and the recipient’s attorney, if any, shall cooperate with the agency by:

(1)  informing the recipient’s insurer of the agency’s right to repayment of medical expenses consistent with the provisions of this subchapter;

(2)  no later than 30 days after initiating informal recovery activity or filing a legal recovery action against a third party, providing the agency with written notice of such activity or action; and

(3)  no later than 30 days after initiating informal recovery activity or filing a legal recovery action against a third party, providing the third party and the third party’s insurer, if any, with written notice of the existence of the agency’s lien and the text of subdivision (e)(1) of this section.

(d)  Any written notice provided to the agency pursuant to subdivision (c)(2) of this section shall disclose the identity and address of any third party against whom the recipient has or may have a right of recovery, the name of the court in which the legal recovery action, if any, was brought, and a copy of the pleadings, if any.  The agency may choose to become a party to such an action.

(e)(1)  A recipient, an attorney on behalf of a recipient, a third party, or an insurer shall not settle, compromise, release, or waive a claim or otherwise allocate the proceeds of any settlement without providing the agency with reasonable notice in order to provide the agency with a meaningful opportunity to participate in the settlement negotiations to ensure a fair allocation of the settlement proceeds to the past medical expenses.  No settlement, compromise, release, or waiver of claim or other allocation shall be finalized without the written consent of the director of the agency or designee, and any settlement, compromise, release, waiver, or other allocation obtained without the agency’s written consent shall be invalid and shall not bind the agency.  If a settlement, compromise, release, waiver, or other allocation is obtained without the consent of the agency, the agency may bring an action in the superior court in Washington County to have the allocation reviewed and modified.

(2)  Notwithstanding subsection (i) of this section, the agency may bring a civil action in the superior court in Washington County to recover up to the full amount it has expended in medical costs on behalf of a recipient from any party, including the recipient, to whom the proceeds of a judgment, settlement, compromise, release, or waiver were paid or made payable.

(3)  Unless the agency intervenes in the lawsuit or files a separate lawsuit, recipients, including minors, shall be vested with the right to recover medical expenses as part of their cause of action for other damages.  Absent a court finding to the contrary, recipients shall be deemed to recover medical expenses as part of any recovery.

(4)  A recipient or an attorney on behalf of a recipient shall pay to the agency, within 30 days after receipt of settlement proceeds or recovery of a judgment, the full amount of the medical assistance owed to the agency.  If full payment of the required sum is not made to the agency within the 30-day period, the recipient or his or her attorney shall place a sum equal to the full amount of the medical assistance provided in an escrow account pending a mediation or judicial determination of the agency’s right to the amount.

(5)  The agency’s lien for its medical costs relating to the recipient’s injury, illness, or disease shall be given priority over all other damages.

(6)  Notwithstanding any other part of this section, if the amount the agency reasonably expects to recover for medical expenses paid on behalf of the recipient from a liable third party, the third party’s insurer, or both is less than or equal to the estimated costs of such recovery, the agency shall not be required to seek reimbursement from, or may reduce or compromise a claim against, the liable third party, the insurer, or both.  In making the determination whether to pursue, reduce, or compromise a claim, the agency may consider the factual and legal issues of liability between the recipient and the liable third party and the total amount available to satisfy the recipient’s claim.

(d)(f)  A lien created under this section shall not be effective unless:

(1)  notice of the lien is filed in the office of the clerk of the town in which the agency is located and contains the name and address of the recipient, acknowledgment of the recipient's application for or receipt of medical assistance, and the name of the person alleged to be liable; and

(2)  the agency mails a notice of the lien with a statement of the date it was filed to the person alleged to be liable.

(e)(g)  The agency shall send a copy of the notice of the lien required by subsection (f) of this section to the following persons, if the appropriate names and addresses can be determined:

(1)  The injured, ill or diseased person recipient for whom the department has paid medical expenses.

(2)  Any insurance carrier that may be ultimately liable.

(3)  Any attorney for the injured, ill or diseased person recipient.

(f)(h)  Within 45 days after the filing of the notice of the lien, the agency shall send an itemized statement of the medical expenses paid by the agency for which the agency seeks to perfect a lien to the persons listed in subsection (e)(g) of this section.  The notice provisions contained in this subsection may be waived by agreement of the parties.

(g)(i)  The agency may, on behalf of a recipient, perfect a lien by filing an action file a civil action in the superior court in Washington County against a liable third party, the third party’s insurer, or both, to recover up to the full amount of medical expenses it has incurred on behalf of the recipient.  The agency may initiate this action only if:

(1)  the recipient has not initiated legal proceedings against the third party within one year after the occurrence of the injury, illness, or disease resulting, at least in part, from the actions or omissions, including negligence, of the third party; and

(2)  the time remaining under the statute of limitations for the action is six months or less.

(h)(j)  The attorney general shall be responsible for initiating actions on behalf of the agency.

(i)(k)  Whenever the agency recovers under the lien and that recovery is the result of an action initiated by a recipient, the attorney for the recipient may withhold the agency's pro rata share of reasonably necessary fees and costs and expenses incurred in asserting the claim.  If the agency waives its right to a lien reimbursement, it is shall not be liable for a pro rata share of any fees or costs under this subsection incurred by the recipient or attorney.

(j)  The attorney for the recipient may negotiate an attorney fee with the agency.

(k)  In cases in which the agency's lien equals or exceeds the amount of judgment or settlement, the agency shall reduce its claim by recognizing reasonable attorney fees and other reasonable costs of procurement of settlement. Additionally, the agency shall compromise its claim taking into consideration the nonmedical claims of the recipient.

(l)  In cases in which the court has determined the amount of recovery allocated for past medical expenses, the agency's lien shall be limited to that amount.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us