H 3833 Session 112 (1997-1998)
H 3833 General Bill, By Hawkins, Altman, Bauer, J.M. Baxley, Beck, H. Brown,
Campsen, Delleney, J.G. Felder, Fleming, Haskins, Limehouse, Maddox, McCraw,
D. Smith, F. Smith, J. Smith, Whipper and W.J. Young
A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION
43-7-435 AND BY AMENDING SECTION 43-7-440, AS AMENDED, RELATING TO ENFORCEMENT
OF A SUPERIORITY OF RIGHTS OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, SO
AS TO REQUIRE, RATHER THAN AUTHORIZE, THE DEPARTMENT OF HEALTH AND HUMAN
SERVICES, IN ENFORCING ITS ASSIGNMENT OR SUBROGATION RIGHTS, TO REDUCE ANY
AMOUNT DUE THE DEPARTMENT BY TWENTY-FIVE PERCENT IF THE RECIPIENT OF SERVICES
HAS RETAINED AN ATTORNEY TO PURSUE THE RECIPIENT'S CLAIM AGAINST A THIRD
PARTY; AND TO AMEND SECTION 43-7-410, AS AMENDED, RELATING TO DEFINITIONS
CONCERNING ASSIGNMENT AND SUBROGATION OF CLAIMS FOR REIMBURSEMENT FOR MEDICAID
SERVICES, SO AS TO CONFORM THE DEFINITION OF "COMMISSION" TO GOVERNMENT
RESTRUCTURING.
04/08/97 House Introduced and read first time HJ-3
04/08/97 House Referred to Committee on Judiciary HJ-4
03/11/98 House Committee report: Favorable with amendment
Judiciary HJ-2
03/17/98 House Amended HJ-17
03/17/98 House Requests for debate-Rep(s). Moody-Lawrence HJ-23
03/17/98 House Read second time HJ-23
03/18/98 House Read third time and sent to Senate HJ-28
03/19/98 Senate Introduced and read first time SJ-6
03/19/98 Senate Referred to Committee on Judiciary SJ-6
05/20/98 Senate Committee report: Favorable with amendment
Judiciary SJ-27
Indicates Matter Stricken
Indicates New Matter
COMMITTEE REPORT
May 20, 1998
H. 3833
Introduced by Reps. Hawkins, Altman, F. Smith, J. Smith, Maddox,
Campsen, Whipper, Baxley, Bauer, Delleney, D. Smith, Beck,
H. Brown, McCraw, Haskins, Fleming, Young, Felder and
Limehouse
S. Printed 5/20/98--S.
Read the first time March 19, 1998.
THE COMMITTEE ON JUDICIARY
To whom was referred a Bill (H. 3833), to amend the Code of Laws
of South Carolina, 1976, by adding Section 43-7-435 and by
amending Section 43-7-440, as amended, relating to enforcement of
a superiority of rights of the Department of Health and Human
Services, etc., respectfully
REPORT:
That they have duly and carefully considered the same, and
recommend that the same do pass with amendment:
Amend the bill, as and if amended, page 2, line 13, in Section
43-7-435(B)(2), as contained in SECTION 1, after /trial./ by
inserting:
/The petition shall be addressed to the court with notice and
opportunity for the department to be heard. If the department desires
to be heard, it must file a responsive pleading within five working
days after receipt of the notice./
Amend the bill further, as and if amended, page 2, beginning on line
33, in Section 43-7-435(D), as contained in SECTION 1, by striking
subsection (D) in its entirety and inserting therein the following:
/(D) Upon discovery by the department of a Medicaid claim which
may be part of a personal injury lawsuit, the department shall send to
the applicant or recipient by certified mail a letter which shall contain
the following notice in bold print and uppercase letters:
'NOTICE: IF YOU ARE A PARTY TO A LAWSUIT OR
CONSIDERING A LAWSUIT BECAUSE OF YOUR INJURIES,
YOU MUST BRING THIS NOTICE OF A MEDICAID CLAIM TO
THE ATTORNEY OF YOUR CHOICE AS SOON AS POSSIBLE.
YOUR ATTORNEY MUST CONTACT US BY CERTIFIED MAIL
WITHIN THIRTY DAYS OF YOUR RECEIPT OF THIS LETTER
TO NOTIFY US THAT HE OR SHE REPRESENTS YOU.
FAILURE TO DO THIS MAY RESULT IN THE DEPARTMENT
OF HEALTH AND HUMAN SERVICES HIRING AN ATTORNEY
OF ITS CHOICE TO PURSUE ITS CLAIM. IF YOU WISH TO
HIRE AN ATTORNEY BUT DO NOT KNOW ONE, YOU MAY
CALL THE LAWYER REFERRAL SERVICE OF THE SOUTH
CAROLINA BAR AT 1-800-868-2284 FOR THE NAMES OF
ATTORNEYS IN YOUR AREA.'
An attorney for an applicant or recipient shall by certified mail
return receipt requested notify the department of the attorney's
representation and his client's potential Medicaid claim within thirty
days of the attorney's actual discovery of the claim, but in no event
later than thirty days following the applicant's or recipient's receipt
of written notice of the Medicaid claim by the department sent by
certified mail to the applicant or recipient containing the above
language. If the department receives timely notice of the attorney's
representation, it must use the applicant's or recipient's attorney to
pursue its claim. If timely notice is not given, the department may
pursue its claim as provided by law subject to Section 43-7-440(E),
and is not liable for the fees and costs in Section 43-7-435(B)(1)
unless it elects to use the applicant's or recipient's attorney to pursue
its claim./
Amend the bill further, as and if amended, page 6, line 41, in
Section 43-7-440(E), as contained in SECTION 3, after
/is/ by inserting /equal to or/.
Amend title to conform.
DONALD H. HOLLAND, for Committee.
A BILL
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA,
1976, BY ADDING SECTION 43-7-435 AND BY AMENDING
SECTION 43-7-440, AS AMENDED, RELATING TO
ENFORCEMENT OF A SUPERIORITY OF RIGHTS OF THE
DEPARTMENT OF HEALTH AND HUMAN SERVICES, SO AS
TO REQUIRE, RATHER THAN AUTHORIZE, THE
DEPARTMENT OF HEALTH AND HUMAN SERVICES, IN
ENFORCING ITS ASSIGNMENT OR SUBROGATION RIGHTS,
TO REDUCE ANY AMOUNT DUE THE DEPARTMENT BY
TWENTY-FIVE PERCENT IF THE RECIPIENT OF SERVICES
HAS RETAINED AN ATTORNEY TO PURSUE THE
RECIPIENT'S CLAIM AGAINST A THIRD PARTY; AND TO
AMEND SECTION 43-7-410, AS AMENDED, RELATING TO
DEFINITIONS CONCERNING ASSIGNMENT AND
SUBROGATION OF CLAIMS FOR REIMBURSEMENT FOR
MEDICAID SERVICES, SO AS TO CONFORM THE
DEFINITION OF "COMMISSION" TO
GOVERNMENT RESTRUCTURING.
SECTION 1. The 1976 Code is amended by adding:
"Section 43-7-435. (A) For purposes of determining the
value of medical services received by the applicant or recipient in
order to pursue recovery from a third party or private insurer, the
applicant or recipient may present evidence of the greater of the
Medicaid claim amount or the billed amount of those medical
services before any discount applied because of Medicaid coverage
of the services.
(B)(1) In enforcing its assignment or subrogation rights, the
Department of Health and Human Services shall reduce any amount
due to the department by the percent agreed upon by the applicant or
recipient and his attorney as attorney fees. The agreed upon percent
reduction may not exceed thirty-three and one third percent except
as provided in Subsection (B)(2). The percent reduction is
twenty-five percent if no percentage attorney fee is agreed upon
between the applicant or recipient and the attorney. That amount
represents the department's share of attorney fees paid by the
applicant or recipient. An attorney retained by the applicant or
recipient must not be considered liable to the department for
improper settlement, compromise, or disbursement of funds unless
the attorney has written notice by certified mail of the department's
claim before the disbursement of funds.
(2) The applicant or recipient and his attorney may petition the
court to increase the percentage over thirty-three and one-third
percent in complicated litigation which proceeds to trial. The court
must conduct a hearing and make written findings on its decision to
order more than a thirty-three and one-third percent reduction in the
amount due to the department. The court must make a finding that
the resulting fee for the attorney is reasonable based on factors
including, but not limited to, the time and labor required, the novelty
and difficulty of the questions involved, and the skill requisite to
perform the legal service properly, the likelihood that the acceptance
of the particular employment precluded other employment by the
lawyer, the fee customarily charged in the locality for similar legal
services, the amount involved and the results obtained, the time
limitations imposed by the applicant or recipient or by the
circumstances, the nature and length of the professional relationship
with the applicant or recipient, and the experience, reputation, and
ability of the lawyer or lawyers performing the services.
(C) The department shall also share in other reasonable costs of
litigation by reducing the amount due the department by a percentage
of the costs, the percentage calculated by dividing the amount due the
department by the total recovery received from the third party or
private insurer.
(D) Upon discovery by the department of a Medicaid claim which
may be part of a personal injury lawsuit, the department shall send to
the applicant or recipient a letter which shall contain the following
notice in bold print and all upper case letters:
'NOTICE: IF YOU ARE A PARTY TO A LAWSUIT OR
CONSIDERING A LAWSUIT BECAUSE OF YOUR INJURIES,
YOU MUST BRING THIS NOTICE OF MEDICAID CLAIM TO
THE ATTORNEY OF YOUR CHOICE AS SOON AS POSSIBLE.
YOUR ATTORNEY MUST CONTACT US BY CERTIFIED MAIL
WITHIN THIRTY DAYS OF YOUR RECEIPT OF THIS LETTER
TO NOTIFY US THAT HE OR SHE REPRESENTS YOU.
FAILURE TO DO THIS MAY RESULT IN THE DEPARTMENT
OF HEALTH AND HUMAN SERVICES HIRING AN ATTORNEY
OF ITS CHOICE TO PURSUE ITS CLAIM. IF YOU WISH TO
HIRE AN ATTORNEY BUT DO NOT KNOW ONE, YOU MAY
CALL THE LAWYER REFERRAL SERVICE OF THE SOUTH
CAROLINA BAR AT 1-800-868-2284 FOR THE NAMES OF
ATTORNEYS IN YOUR AREA.'
An attorney for an applicant or recipient shall notify the department
of a potential Medicaid claim upon its actual discovery, as well as
notice of his or her representation of the applicant or recipient. This
notice must be mailed to the department by certified mail within
thirty days of actual discovery of the claim, but in no event later than
thirty days following the applicant's or recipient's receipt of written
notice of the Medicaid claim by the department sent certified mail to
the applicant or recipient containing the above language.
(E) Upon written request by the attorney for the applicant or
recipient, the department shall provide written information regarding
the Medicaid claim which shall include, but is not limited to, the
outstanding amount of the claim at the time of the department's
response. The department shall provide its response within ten days
of receipt of the request if the first claim was submitted to the
department within the last eighteen months and within forty-five days
of receipt in all other cases. The attorney may rely on that
information for a period of sixty days after receipt for purposes of
negotiating a settlement or pursuing a verdict. If a settlement or
verdict is not obtained within sixty days of receipt of the claim of
information, the attorney must request an update, and the department
may amend the claim to reflect its most current information which
may be relied upon for a new period of sixty days of receipt. If a
settlement or verdict is obtained, the attorney must provide written
documentation to the department within the sixty days."
SECTION 2. Section 43-7-410(B) of the 1976 Code is amended
to read:
"(B) "Commission"
'Department' means the State South Carolina
Department of Health and Human Services Finance
Commission."
SECTION 3. Sections 43-7-420, 43-7-430 and 43-7-440 of the
1976 Code are amended to read:
"Section 43-7-420. (A) Every applicant or recipient, only to
the extent of the amount of the medical assistance paid by Medicaid,
shall be is deemed to have assigned his rights to
recover such amounts so paid by Medicaid from any third party or
private insurer to the State South Carolina Department
of Health and Human Services Finance Commission.
This assignment shall does not include rights to
Medicare benefits. The applicant or recipient shall cooperate fully
with the State Health and Human Services Finance
Commission department in its efforts to enforce its
assignment rights.
(B) An applicant's and recipient's determination of, and continued
eligibility for, medical assistance under Medicaid is contingent upon
his cooperation with the Commission department in
its efforts to enforce its assignment rights. Cooperation includes, but
is not limited to, reimbursing the Commission
department from proceeds or payments received by the
applicant or recipient from any third party or private insurer.
(C) Every applicant or recipient is considered to have authorized
all persons, including insurance companies and providers of medical
care, to release to the Commission department all
information needed to enforce the assignment rights of the
Commission department.
Section 43-7-430. (A) The State South Carolina
Department of Health and Human Services Finance
Commission shall be is automatically subrogated, only
to the extent of the amount of medical assistance paid by Medicaid,
to the rights an applicant or recipient may have to recover
such these amounts so paid by Medicaid
from any third party or private insurer. The applicant or recipient
shall cooperate fully with the State Health and Human Services
Finance Commission department and shall do nothing
after medical assistance is provided to prejudice the subrogation
rights of the State Health and Human Services Finance
Commission department.
(B) An applicant's and recipient's determination of, and continued
eligibility for, medical assistance under Medicaid is contingent upon
his cooperation with the Commission department in
its efforts to enforce its subrogation rights. Cooperation includes, but
is not limited to, reimbursing the Commission
department from proceeds or payments received by the
recipient from any third party or private insurer.
(C) Every applicant or recipient is considered to have authorized
all persons, including insurance companies and providers of medical
care, to release to the Commission department all
information needed to enforce the subrogation rights of the
Commission department.
Section 43-7-440. (A) The Commission
department, to enforce its assignment or subrogation rights,
may take any one, or any combination of, the following actions
if the actions do not conflict with the requirements of Section
43-7-735:
(1) intervene or join in an action or proceeding brought by the
applicant or recipient against any third party, or private insurer, in
state or federal court.
(2) commence and prosecute legal proceedings against any third
party or private insurer who may be liable to any applicant or
recipient in state or federal court, either alone or in conjunction with
the applicant or recipient, his guardian, personal representative of his
estate, dependents, or survivors;
(3) commence and prosecute legal proceedings against any third
party or private insurer who may be liable to an applicant or
recipient, or his guardian, personal representative of his estate,
dependents, or survivors;
(4) commence and prosecute legal proceedings against any
applicant or recipient;
(5) settle and compromise any amount due to the State
South Carolina Department of Health and Human Services
Finance Commission under its assignment and subrogation
rights. Provided, further, any representative or attorney retained
by an applicant or recipient shall not be considered liable to State
Health and Human Services Finance Commission for improper
settlement, compromise or disbursement of funds unless he has
written notice of State Health and Human Services Finance
Commission's assignment and subrogation rights prior to
disbursement of funds;
(6) reduce any amount due to the State Health and
Human Services Finance Commission by twenty-five percent if the
applicant or recipient has retained an attorney to pursue the
applicant's or recipient's claim against a third party or private insurer,
that amount to represent the State Health and Human Services
Finance Commission's share of attorney's fees paid by the applicant
or recipient. Additionally, the State Health and Human Services
Finance Commission may, in its discretion, share in other costs of
litigation by reducing the amount due it by a percentage of those
costs, the percentage calculated by dividing the amount due the State
Health and Human Services Finance Commission by the total
settlement received from the third party or private insurer. Provided,
further, any representative or attorney retained by an applicant or
recipient shall not be considered liable to State Health and Human
Services Finance Commission for improper settlement, compromise,
or disbursement of funds unless he has written notice by certified
mail of State Health and Human Services Finance Commission's
assignment and subrogation rights prior to disbursement of funds.
(B) Providers and practitioners who participate in the Medicaid
program shall cooperate with the Commission
department in the identification of third parties whom they
have reason to believe may be liable to pay all or part of the medical
costs of the injury, disease, or disability of an applicant or recipient.
(C) Any provision in the contract of a private insurer issued or
renewed after June 11, 1986, which denies or reduces benefits
because of the eligibility of the insured to receive assistance under
Medicaid, is null and void.
In enrolling a person or in making payments for benefits to a person
or on behalf of a person, no private insurer may take into account that
the person is eligible for or is provided medical assistance under a
State Plan for Medical Assistance pursuant to Title XIX of the Social
Security Act.
(D) The assignment and subrogation rights of the
Commission department are superior to any right of
reimbursement, subrogation, or indemnity of any third party or
recipient except as provided for in subsection (D).
Provided, further, any representative or attorney retained by an
applicant or recipient shall not be considered liable to State Health
and Human Services Finance Commission for improper settlement,
compromise, or disbursement of funds unless he has written notice of
State Health and Human Services Finance Commission's assignment
and subrogation rights prior to disbursement of funds.
In a case where a third party has a legal liability to make
payments for medical assistance to or on behalf of a person, to the
extent that payment has been made under a State Plan for Medical
Assistance pursuant to Title XIX of the Social Security Act for health
care items or services furnished to the person, the State is considered
to have acquired the rights of the person to payment by any other
party for the health care items or services.
(E) If the applicant's or recipient's total recovery from a third
party or private insurer is more than two times the value of the
applicant's or recipient's medical services received, the South
Carolina Department of Health and Human Services is entitled to a
full recovery of Medicaid money paid for the applicant's or recipient's
related medical services, less the department's share of attorneys fees
and costs. If the applicant's or recipient's total recovery from a third
party or private insurer is less than two times the value of the
applicant's or recipient's medical services received, the department,
using cost effectiveness principles set forth in the Medicaid State
Plan, shall determine what portion of the Medicaid claim it should
seek to recover. If, after a good faith attempt, the applicant or
recipient and the department do not agree on a recovery amount, the
applicant or recipient may request an allocation hearing in the Court
of Common Pleas and a judge shall determine the proper allocation
of the applicant's or recipient's total recovery, after payment of
attorney's fees, to reimbursement for medical services, and to all of
the applicant's or recipient's other damages. Upon agreement of all
parties, the allocation may be effected through mediation or
arbitration."
SECTION 4. Section 43-7-460(G) of the 1976 Code, as last
amended by Act 93 of 1997, is further amended to read:
"(G) Notwithstanding subsection (A)(2) upon the enactment
of any amendments to federal law which grants states the option to
exempt home and community-based services or other noninstitutional
Medicaid services from the estate recovery provisions mandated by
Section 13612 of the federal Omnibus Budget Reconciliation Act of
1993, the State South Carolina Department of Health
and Human Services Finance Commission shall seek recovery
of medical assistance paid under the Title XIX State Plan for Medical
Assistance from the estate of an individual who:
(1) at the time of death was an inpatient in a nursing facility,
intermediate care facility for the mentally retarded, or other medical
institution if the individual is required, as a condition of receiving
services in the facility under the state plan, to spend for costs of
medical care all but a minimal amount of the person's income
required for personal needs; or
(2) was fifty-five years of age or older when the individual
received medical assistance but only for medical assistance consisting
of nursing facility services."
SECTION 5. This act takes effect upon approval by the Governor.
-----XX----- |