A. Each individual or group contract for health care expense payments or certificate therefor that is delivered, issued for delivery or renewed in this state by a health care plan shall include provisions that require benefits paid on behalf of a subscriber under the contract or certificate to be paid to the human services department [health care authority department] when:

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(1)     the human services department [health care authority department] has paid or is paying health care expenses on behalf of the subscriber under the state’s medicaid program pursuant to Title XIX of the federal Social Security Act, 42 U.S.C.

1396, et seq.;

(2)     payment for the expenses in question has been made by the human services department [health care authority department] to the medicaid provider; and

(3)     the health care plan is notified that the subscriber receives benefits under the medicaid program and that benefits must be paid directly to the human services department [health care authority department].

B. The notice required under Paragraph (3) of Subsection A of this section may be accomplished through an attachment to the claim by the human services department [health care authority department] for health care expense payments when the claim is first submitted by the human services department [health care authority department] to the health care plan.

C. Notwithstanding any other provisions of law, checks in payment for claims pursuant to any individual or group contract for health care expense payments or certificate therefor for health care services provided to subscribers who are also eligible for benefits under the medicaid program and provided by medical providers qualified to participate under the contract or certificate shall be made payable to the provider. The health care plan may be notified that the subscriber is eligible for medicaid benefits through an attachment to the claim by the provider for health care expense payments when the claim is first submitted by the provider to the health care plan.

D. No individual or group contract for health care expense payments or certificate therefor delivered, issued for delivery or renewed in this state on or after the effective date of this section shall contain any provision denying or limiting contract benefits because services are rendered to a subscriber who is eligible for or who has received medical assistance under the medicaid program of this state.

E. To the extent that payment for covered expenses has been made pursuant to the state medicaid program for health care items or services furnished to an individual, in any case where a health care plan has a legal liability to make payments, the state is considered to have acquired the rights of the individual to payment by the health care plan for those health care items or services.