§ 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 an illness or disease as a result of negligence; and

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

(b)(1) The Agency shall have a lien against the insurer, to the extent of the amount paid by the Agency for past medical expenses, on any recovery from the insurer, whenever the Agency pays medical expenses or renders medical services on behalf of a recipient who has been injured or has an injury, illness, or disease and the recipient asserts a claim against an insurer as a result of the injury, illness, or disease.

(2) Effective July 1, 2013, the recipient’s insurer or alleged liable party’s insurer, if any, shall take reasonable steps to discover the existence of the Agency’s medical assistance. Payment to the recipient instead of the Agency does not discharge the insurer from payment of the Agency’s claim.

(c) 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 informing the Agency in writing within a reasonable period of time after learning that the Agency has paid medical expenses for the recipient. The recipient’s attorney shall take reasonable steps to discover the existence of the Agency’s medical assistance.

(d) Any written notice provided to the Agency pursuant to subsection (c) of this section shall disclose the identity and address of any third party and his, her, or its insurer against whom the recipient has a right of recovery, and the name of the court in which the legal recovery action, if any, was brought.

(e)(1) A recipient or an attorney on behalf of a recipient shall allocate the full amount paid by the Agency for past medical expenses to or for any recovery obtained by whatever means.

(2) 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 expenses 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 expenses paid in an escrow account pending an agreement, mediation, or judicial determination of the Agency’s right to the amount.

(3) The Agency’s lien for its medical expenditures relating to the recipient’s injury, illness, or disease shall be given priority over all other claims on the total amount recovered.

(4) In making the determination whether to pursue, reduce, or compromise a claim, the Agency may in its discretion consider the factual, evidentiary, and legal issues of liability between the recipient and any liable third party and the total amount available to satisfy the recipient’s claim. Where the amount of reimbursement the Agency can reasonably expect to recover exceeds the costs of such recovery, the Agency shall not be required to seek reimbursement from or may reduce or compromise a claim against any liable third party, the insurer, or both. Whether or not the Agency exercises its discretion shall not be subject to any claim of abuse of discretion.

(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.

(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 recipient for whom the Department has paid medical expenses;

(2) any insurance carrier that may be ultimately liable; and

(3) any attorney for the recipient.

(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 (g) of this section. The notice provisions contained in this subsection may be waived by agreement of the parties.

(i) The Agency may, on behalf of a recipient, 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.

(j) The Attorney General shall be responsible for initiating actions on behalf of the Agency.

(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 attorney’s fees, costs, and expenses incurred in asserting the claim. If the Agency waives its right to reimbursement, it shall not be liable for any fees, costs, and expenses incurred by the recipient or attorney.

(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. (Added 1995, No. 152 (Adj. Sess.), § 4; amended 2007, No. 192 (Adj. Sess.), § 6.014; 2011, No. 162 (Adj. Sess.), § E.307.3; 2013, No. 96 (Adj. Sess.), § 206.)