GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

H	1 

HOUSE BILL 2348

Short Title:  Medicaid Subrogation/Funds Increased.	(Public)
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Sponsors: Representatives Gardner; Gray, Stam, L. Etheridge, and Buchanan. 
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Referred to:  Human Resources.
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June 6, 1990

A BILL TO BE ENTITLED
AN ACT TO AMEND THE LAW REGARDING MEDICAID SUBROGATION TO CONFORM TO FEDERAL GUIDELINES AND INCREASE CASUALTY RECOVERY FUNDS.
Whereas, G.S. 108A-57, dealing with Medicaid subrogation, needs to be amended to meet federal guidelines; and
Whereas, G.S. 108A-57 also needs to be amended to give the Division of Medical Assistance more leverage with insurance companies and attorneys in securing Medicaid subrogation refunds; and
Whereas, these amendments will increase casualty recovery funds by approximately seven hundred fifty thousand dollars ($750,000); Now, therefore,
The General Assembly of North Carolina enacts:
Section 1.  G.S. 108A-57 reads as rewritten:
"§ 108A-57. Subrogation rights; withholding of information a misdemeanor.
	(a)	Notwithstanding any other provisions of the law, to the extent of payments under this Part, the State, or the county providing medical assistance (Medicaid) benefits, shall be subrogated to all rights of recovery, contractual or otherwise, of the beneficiary of such assistance, or of his personal representative, his heirs, or the administrator or executor of his estate, against any person.  It shall be the responsibility of the county attorney or an attorney retained by the county and/or the State or an attorney retained by the beneficiary of the assistance if such attorney has actual notice of payments made under this Part to enforce this section, and said attorney shall be compensated for his services in accordance with the  attorneys' fee arrangements approved by the Department; provided, however, that any attorney retained by the beneficiary of the assistance shall be compensated for his services in accordance with the following schedule and in the following order of priority from any amount obtained on behalf of the beneficiary by settlement with, judgment against, or otherwise from a third party by reason of such injury or death:
(1)	First to the payment of any court costs taxed by the judgment;
(2)	Second to the payment of the fee of the attorney representing the beneficiary making the settlement or obtaining the judgment, but this fee shall not exceed one-third of the amount obtained or recovered to which the right of subrogation applies;
(3)	Third to the payment of the amount of assistance received by the beneficiary; and
(4)	Fourth to the payment of any amount remaining to the beneficiary or his personal representative.
The United States and the State of North Carolina shall be entitled to shares in each net recovery under this section. Their shares shall be promptly paid under this section and their proportionate parts of such sum shall be determined in accordance with the matching formulas in use during the period for which assistance was paid to the recipient.
(b)	No compromise, including but not limited to a settlement, waiver, or release, of any claim to which the State is subrogated under this section shall defeat the State's right of recovery.
The State shall be given notice of monetary claims against third parties as follows:
(1)	Applicants for medical assistance shall notify the State or county department of social services of any possible claim against third parties upon submitting the application.  Recipients of medical assistance shall notify the State or county department of social services of any possible claim when those claims arise.
(2)	Any person who provides health care services to a person receiving assistance through the medical assistance program shall notify the State whenever the person has a reason to believe that third parties may be liable for payment of the cost of those health care services.
(3)	Any attorney representing an applicant for, or recipient of, assistance on a claim to which the State is subrogated under this section shall notify the State of the claim prior to commencing any action or negotiating any settlement offer.
(4)	The subrogation rights of the State shall be valid and binding on an insurer or third party.  Payment of benefits by an insurer or other third party pursuant to the subrogation rights hereunder shall discharge that insurer or third party from liability to the recipient, the recipient's assignee, or personal representative, to the extent of these payments to the State.
	(c) It shall be a misdemeanor for any person seeking or having obtained assistance under this Part for himself or another to willfully fail to disclose to the county department of social services or its attorney the identity of any person or organization against whom the recipient of assistance has a right of recovery, contractual or otherwise."
Sec. 2.  This act shall become effective October 1, 1990, and applies to assistance received on and after that date.