§346-37  Recovery of payments and costs of
medical assistance.  (a)  If a recipient under this chapter dies leaving an
estate and does not have a surviving spouse, child, father, mother,
grandfather, grandmother, grandchild, stepfather, stepmother, or any designated
heir, the department shall have a valid claim against the estate for the amount
of social services overpayments, financial assistance overpayments, or burial
payments granted.  The department shall file a claim against the estate of a
deceased recipient of medical assistance for the amount of medical assistance
granted, only if the recipient was age fifty-five or over when such medical
assistance was received and there is no surviving spouse, or surviving child
who is under twenty-one years of age, or blind, or disabled.  The department
shall file a claim against the estate of a recipient of medical assistance who
was an inpatient in a nursing facility, intermediate care facility for the
mentally retarded, or other medical institution only if there is no surviving
spouse or surviving child who is under twenty-one years of age, or blind, or
disabled.



(b)  If any portion of any public assistance,
including medical assistance, food stamps, or burial payment, was obtained by
any fraudulent device, including but not limited to those under section 346-34,
or if any public assistance, including medical assistance, food stamps, or
burial payment, was furnished or provided after receipt of income or resources
which were not reported to the department as required by this chapter or by the
department, the department may file a claim against the estate of the deceased
recipient notwithstanding subsection (a).



(c)  If the department has provided medical
assistance or burial payment to a person who was injured, suffered a disease,
or died under circumstances creating a tort or other liability or payment
obligation against a third person, the department shall have a right to recover
from the third person an amount not to exceed the full amount of the costs of medical
assistance or burial payment furnished or to be furnished by the department.



(d)  The department, as to this right of
reimbursement, shall also be subrogated to all rights or claims that a claimant
has against the third person for all damages not to exceed the full extent of
the costs of medical assistance or burial payment furnished or to be furnished
by the department.  The department's right to full reimbursement of the costs
of medical assistance or burial payment as a subrogee of a claimant shall not
be diminished by the recovery of any judgment, settlement, or award of an
amount less than the value of the original or settled claim as perceived or
calculated by the claimant or any other person.



To enforce its rights, the department may
intervene or join in any action or proceeding brought by a claimant against the
third person.  If the action or proceeding is not commenced within six months
after the first day on which medical assistance or burial payment is furnished
by the department in connection with the injury, disease, or death involved,
the department may institute and prosecute legal proceedings against the third
person for the injury, disease, or death, in a state court, either alone (in
its own name or in the name of a claimant) or in conjunction with the claimant.



(e)  An attorney representing a claimant or
third person shall make reasonable inquiry as to whether the claimant has
received or is receiving from the department medical assistance related to the
incident involved in the action.  If the claimant, claimant's attorney, or
claimant's heirs, representatives, or beneficiaries, or any third person have
received from the department actual notice of its right to reimbursement or if
they have reason to know that the claimant has received or is receiving from
the department medical assistance related to the incident, then the claimant,
claimant's attorney, claimant's heirs, representatives, or beneficiaries, or
third person or third person's attorney shall give to the department timely written
notice of any claim or action against a third person.  At any time during the
pendency of any claim or action, the claimant, claimant's attorney if
represented, claimant's heirs, representatives, or beneficiaries, or third
person or third person's attorney may contact the department to ascertain the
full amount of the costs of medical assistance or burial payment made, which
information shall be provided in a reasonable time by the department.  Upon
obtaining a judgment or reaching a settlement through negotiation or legal
proceedings, but before the release of any award or settlement proceeds to any
person:



(1)  The claimant's attorney or third person or third
person's attorney, if the attorney has received actual notice from the
department of a lien or if the attorney or third person has reason to know that
a lien exists; or



(2)  The claimant or the claimant's heirs,
representatives, or beneficiaries, if not represented by an attorney who has
received actual notice of the lien,



shall notify the department immediately in order to
ascertain and pay the full amount of the costs of medical assistance or burial
payment made.



(f)  If liability is found to exist, or if the
issue of third-party liability is settled or compromised without a finding of
liability, regardless of who institutes legal proceedings or seeks other means
of recovering, the department shall have a right to recover the full amount of
the costs of medical assistance or burial payment made.  To aid in the recovery
of the costs the department shall have a first lien in the full amount of the
costs of medical assistance or burial payment made against the proceeds from
all damages awarded in a suit or settlement.  The lien shall attach as provided
by subsection (g).



(g)  The lien of the department for
reimbursement of costs of medical assistance or burial payments under
subsection (f), shall attach by a written notice of lien served upon the
claimant's attorney or upon the third person, the third person's agent,
attorney, or insurance company.  The method of service shall be by certified or
registered mail, return receipt requested, or by delivery of the notice of lien
personally to the individuals referred to.  Service by certified or registered
mail is complete upon receipt.  The notice of lien shall state the name of the
injured, diseased, or deceased person, the amount of the lien, and the date of
the accident or incident which caused the injuries, disease, or death which
necessitated the department's medical assistance or burial payments.  If the
notice of lien is served upon the claimant's attorney, the notice of lien shall
state that the claimant's attorney shall pay the full amount of the lien from
the proceeds of any judgment, settlement, or compromise based on the incident
or accident.  If the notice of lien is served upon the third person, the third
person's agent, attorney, or insurance company, the notice of lien shall state
that the third person shall pay the full amount of the lien prior to disbursing
any of the proceeds to the claimant or to the claimant's attorney.  A notice of
lien may be amended from time to time until extinguished, each amendment taking
effect upon proper service.



(h)  The lien shall attach as provided by
subsection (g). If a notice of lien is properly served upon the attorney
representing the claimant as provided in subsection (g), that attorney shall
pay the full amount of the lien, prior to disbursing any of the proceeds of the
suit or settlement to the attorney's client.  If a notice of lien is properly
served upon the third person, the third person's agent or attorney, or the
third person's insurance company, as provided in subsection (g), it shall be
the responsibility of the person receiving the notices to pay the full amount
of the lien prior to disbursing any of the proceeds to the claimant's attorney.



If, after having received timely written notice
of any claim or action under subsection (e), the department did not intervene
or join in the action or prosecute its own claims or actively participate with
claimant or claimant's attorney in the prosecution of claims, or a distribution
agreement was not entered into between the parties, then the department shall
determine its fair contribution toward attorney fees and costs incurred in the
action that shall be a reasonable amount based solely upon legitimate costs and
services rendered by the claimant or claimant's attorney in recovering the lien
amount. Any dispute regarding the department's determination of its
contribution to fees and costs may be submitted to administrative hearing under
subsection (i) or a court of competent jurisdiction.  The value of services
contributed by the claimant and department may be considered in fairly
allocating fees and costs between the claimant and department where both contribute
to recovering the lien amount.



(i)  Notwithstanding any other law to the
contrary, if there is a dispute between the claimant, the claimant's agent or
the claimant's attorney, and the department concerning the existence of the
lien or the amount of  the lien, or the amount to be reimbursed, the claimant,
the claimant's agent, or the claimant's attorney shall request in writing a
hearing on the dispute.  After receipt by the department of a written request,
the department shall conduct an administrative hearing within a reasonable
period of time.  Chapter 91, including any provisions for judicial review or
appeal, shall apply to the hearing.  Funds sufficient to fully satisfy the
reimbursement rights of the department shall be either retained by the person
served with the notice of lien, shall be paid to the department, or otherwise
reserved subject to agreement with the department pending its decision and any
subsequent judicial review or appeal.



(j)  Upon the recovery of any claim as provided
in this section, the amount recovered shall be paid into the treasury of the
State, and if the amount for which claim was paid was in part from federal
funds, the proper portion thereof shall be paid by the director of finance into
the treasury of the United States, and the director of finance shall report the
payment to the department.



(k)  Any person who is subject to the lien who
fails to pay the full amount due to the department for reimbursement of the
costs of medical assistance, although able to do so from the proceeds of the
suit or settlement, shall be personally liable to the department for any damage
proximately caused to the department by such failure.



(l)  No action taken by the department in
connection with the rights under this section shall deny to the claimant the
recovery for that portion of the claimant's damages not covered under this
section.



(m)  For purposes of this section:



"Claimant" includes an injured or
diseased person, the person's guardian, or the personal representative, estate,
dependents, or survivors, of the deceased person.



"Costs of medical assistance"
furnished or to be furnished by the department includes:



(1)  The value or cost of medical care services
provided directly by the department;



(2)  The amount paid by the department to a provider
for medical care services rendered or to be rendered; and



(3)  The value or cost of medical care services
rendered or to be rendered by a provider that has received the equivalent of an
insurance benefit, capitation rate, and other fee or like charge paid by the
department or by a medical care insurer to provide for medical care services.



"Third person" includes any person,
business, corporation, partnership, or entity of any kind or nature, including
employers and insurance carriers, that is potentially liable to the claimant
for any tort, liability, payment, reimbursement, or benefit of any kind or
nature by reason of any injury, disease, or death.



(n)  The department may agree with a provider
or medical care insurer for the provision of medical care services or medical
assistance to any claimant, and the agreement may provide for the department to
be the exclusive entity authorized to recover all costs of medical assistance
rendered to a claimant.  The department may recover all costs through the use
of the lien procedures established by this section.



(o)  In third-party liability situations, the
medical assistance program of the department shall be fully reimbursed before
the claimant receives any money from the settlement or award.  This section is
not intended to restrict or diminish the right of the department to settle or
compromise its reimbursement rights under this section for less than the full
amount due or enter into any agreement with claimant, claimant's attorney or
representative, or other party for the distribution of proceeds from a suit or
settlement. [L 1941, c 296, pt of §1; RL 1945, §4842; RL 1955, §108-23; am L Sp
1959 2d, c 1, §14; am L 1963, c 114, §1; HRS §346-37; am L 1972, c 32, §2; am L
1975, c 137, pt of §2; am L 1980, c 206, §1; am L 1982, c 147, §17; gen ch
1985; am L 1994, c 187, §§4, 5; am L 1997, c 201, §1; am L 1999, c 52, §2; am L
2001, c 50, §2]



 



Cross References



 



  Medicaid fraud unit, see §28-91.



 



Case Notes



 



  State's lien cannot be evaded by settlement agreement between
injured person and putative tortfeasor covering only special damages.  Validity
and amount of subrogated claim is for court to decide.  69 H. 21, 731 P.2d 157.



  Subsection (j) (1997) grants the State recovery of its costs
for medical assistance from special damages and does not limit the State to
accepting a pro rata share of claimant's recovery; a settling claimant cannot
waive recovery of special damages, but the State is entitled to and may recover
its medical assistance expenses from the special damages obtained.  101 H. 466,
71 P.3d 417.



  The clear and unambiguous language of this section (1997),
establishes a priority that the medical assistance lien be paid to the
department of human services before the recipient of the medical assistance is
reimbursed; thus, trial court erred when it reduced the amount of the
department's statutory lien.  101 H. 473 (App.), 71 P.3d 424.



  Cited:  73 H. 403, 833 P.2d 890.