S.B. 117

This document includes Senate Committee Amendments incorporated into the bill on Fri, Jan 19, 2007 at 11:10 AM by rday. --> 1

MEDICAID RECOVERY AMENDMENTS
2 2007 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Allen M. Christensen
5 House Sponsor: Merlynn T. Newbold
6
7 LONG TITLE
8 General Description:
9 This bill amends the Medicaid Benefits Recovery Act and the Insurance Code to
10 comply with the federal Deficit Reduction Act.
11 Highlighted Provisions:
12 This bill:
13 . defines terms;
14 . establishes, as a condition of doing business in the state, requirements for health
15 insurance entities relating to providing information to the state, accepting the right
16 of the state to recover Medicaid expenses, and approving valid claims by the state;
17 . permits a claim for Medicaid recovery to be submitted up to three years after the day
18 on which the health care item or service upon which the claim is based was
19 provided;
20 . extends the statute of limitations for an action to recover Medicaid expenses, unless
21 the action was time-barred on or before April 30, 2007;
22 . prohibits insurance policies from imposing a Medicaid insurance recovery deadline
23 that is earlier than the deadline provided for in this bill;
24 . provides for enforcement of the provisions of this bill and for penalties against
25 health insurance entities that are regulated by the Department of Insurance; and
26 . makes technical changes.
27 Monies Appropriated in this Bill:

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- 2 - 28 None
29 Other Special Clauses:
30 None
31 Utah Code Sections Affected:
32 AMENDS:
33 26-19-2, as last amended by Chapter 103, Laws of Utah 2005
34 26-19-8, as last amended by Chapter 72, Laws of Utah 2004
35 75-7-508, as last amended by Chapter 103, Laws of Utah 2005
36 ENACTS:
37 26-19-4.7, Utah Code Annotated 1953
38 31A-4-107.5, Utah Code Annotated 1953
39
40 Be it enacted by the Legislature of the state of Utah:
41 Section 1. Section 26-19-2 is amended to read:
42 26-19-2. Definitions.
43 As used in this chapter:
44 (1) "Annuity" shall have the same meaning as provided in Section 31A-1-301 .
45 (2) "Claim" means:
46 (a) a request or demand for payment; or
47 (b) a cause of action for money or damages arising under any law.
48 (3) "Employee welfare benefit plan" means a medical insurance plan developed by an
49 employer under 29 U.S.C. Section 1001, et seq., the Employee Retirement Income Security Act
50 of 1974 as amended.
51 (4) "Estate" means, regarding a deceased recipient:
52 (a) all real and personal property or other assets included within a decedent's estate as
53 defined in Section 75-1-201 ;
54 (b) the decedent's augmented estate as defined in Section 75-2-203 ; and
55 (c) that part of other real or personal property in which the decedent had a legal interest
56 at the time of death including assets conveyed to a survivor, heir, or assign of the decedent
57 through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other
58 arrangement.

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- 3 - 59 (5) "Health insurance entity" means:
60 (a) an insurer;
61 (b) a person who administers, manages, provides, offers, sells, carries, or underwrites
62 health insurance, as defined in Section 31A-1-301 ;
63 (c) a self-insured plan;
64 (d) a group health plan, as defined in Subsection 607(1) of the federal Employee
65 Retirement Income Security Act of 1974;
66 (e) a service benefit plan;
67 (f) a managed care organization;
68 (g) a pharmacy benefit manager;
69 (h) an employee welfare benefit plan; or
70 (i) a person who is, by statute, contract, or agreement, legally responsible for payment
71 of a claim for a health care item or service.
72 [(5)] (6) "Insurer" includes:
73 (a) a group health plan as defined in Subsection 607(1) of the federal Employee
74 Retirement Income Security Act of 1974;
75 (b) a health maintenance organization; and
76 (c) any entity offering a health service benefit plan.
77 [(6)] (7) "Medical assistance" means:
78 (a) all funds expended for the benefit of a recipient under Title 26, Chapter 18, Medical
79 Assistance Act, or under Titles XVIII and XIX, federal Social Security Act; and
80 (b) any other services provided for the benefit of a recipient by a prepaid health care
81 delivery system under contract with the department.
82 [(7)] (8) "Office of Recovery Services" means the Office of Recovery Services within
83 the Department of Human Services.
84 [(8)] (9) "Provider" means a person or entity who provides services to a recipient.
85 [(9)] (10) "Recipient" means:
86 (a) a person who has applied for or received medical assistance from the state;
87 (b) the guardian, conservator, or other personal representative of a person under
88 Subsection [(9)] (10)(a) if the person is a minor or an incapacitated person; or
89 (c) the estate and survivors of a person under Subsection [(9)] (10)(a) if the person is

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- 4 - 90 deceased.
91 [(10)] (11) "State plan" means the state Medicaid program as enacted in accordance
92 with Title XIX, federal Social Security Act.
93 [(11)] (12) "Third party" includes:
94 (a) an individual, institution, corporation, public or private agency, trust, estate,
95 insurance carrier, employee welfare benefit plan, health maintenance organization, health
96 service organization, preferred provider organization, governmental program such as Medicare,
97 CHAMPUS, and workers' compensation, which may be obligated to pay all or part of the
98 medical costs of injury, disease, or disability of a recipient, unless any of these are excluded by
99 department rule; and
100 (b) a spouse or a parent who:
101 (i) may be obligated to pay all or part of the medical costs of a recipient under law or
102 by court or administrative order; or
103 (ii) has been ordered to maintain health, dental, or accident and health insurance to
104 cover medical expenses of a spouse or dependent child by court or administrative order.
105 [(12)] (13) "Trust" shall have the same meaning as provided in Section 75-1-201 .
106 Section 2. Section 26-19-4.7 is enacted to read:
107 26-19-4.7. Health insurance entity -- Duties related to state claims for Medicaid
108 payment or recovery.
109 As a condition of doing business in the state, a health insurance entity shall:
110 (1) with respect to a person who is eligible for, or is provided, medical assistance under
111 the state plan, upon the request of the Department of Health, provide information to determine:
112 (a) during what period the person, or the spouse or dependent of the person, may be or
113 may have been, covered by the health insurance entity; and
114 (b) the nature of the coverage that is or was provided by the health insurance entity
115 described in Subsection (1)(a), including the name, address, and identifying number of the
116 plan;
117 (2) accept the state's right of recovery and the assignment to the state of any right of a
118 person to payment from a party for an item or service for which payment has been made under
119 the state plan;
120 (3) respond to any inquiry by the Department of Health regarding a claim for payment

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Senate Committee Amendments 1-19-2007 rd/trv 121

for any health care item or service that is submitted no later than three years after the day on
122 which the health care item or service is provided; and
123 (4) not deny a claim submitted by the Department of Health solely on the basis of the
124 date of submission of the claim, the type or format of the claim form, or failure to present
125 proper documentation at the point-of-sale that is the basis for the claim, if:
126 (a) the claim is submitted no later than three years after the day on which the item or
127 service is furnished; and
128 (b) any action by the Department of Health to enforce the rights of the state with
129 respect to the claim is commenced no later than six years after the day on which the claim is
130 submitted.
131 Section 3. Section 26-19-8 is amended to read:
132 26-19-8. Statute of limitations -- Survival of right of action -- Insurance policy not
133 to limit time allowed for recovery.
134 (1) (a) [An] Subject to Subsection (6), action commenced by the department S. [ , or the
135 Office of Recovery Services on behalf of the department, ] .S under this chapter against a health
136 insurance [carrier or employee welfare benefit plan] entity must be commenced within:
137 [(i) two years after the date of the injury or onset of the illness; or]
138 (i) subject to Subsection (7), six years after the day on which the department S. [ or the
139 Office of Recovery Services ] .S submits the claim for recovery or payment for the health care item
140 or service upon which the action is based; or
141 (ii) six months after the date of the last payment for medical assistance, whichever is
142 later.
143 (b) An action against any other third party, the recipient, or anyone to whom the
144 proceeds are payable must be commenced within:
145 (i) four years after the date of the injury or onset of the illness; or
146 (ii) six months after the date of the last payment for medical assistance, whichever is
147 later.
148 (2) The death of the recipient does not abate any right of action established by this
149 chapter.
150 (3) (a) No insurance policy issued or renewed after June 1, 1981, may contain any
151 provision that limits the time in which the department may submit its claim to recover medical

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- 6 - 152 assistance benefits to a period of less than 24 months from the date the provider furnishes
153 services or goods to the recipient.
154 (b) No insurance policy issued or renewed after April 30, 2007, may contain any
155 provision that limits the time in which the department may submit its claim to recover medical
156 assistance benefits to a period of less than that described in Subsection (1)(a).
157 (4) The provisions of this section do not apply to Section 26-19-13.5 .
158 (5) The provisions of this section supercede any other sections regarding the time limit
159 in which an action must be commenced, including Section 75-7-509 .
160 (6) (a) Subsection (1)(a) extends the statute of limitations on a cause of action
161 described in Subsection (1)(a) that was not time-barred on or before April 30, 2007.
162 (b) Subsection (1)(a) does not revive a cause of action that was time-barred on or
163 before April 30, 2007.
164 (7) An action described in Subsection (1)(a) may not be commenced if the claim for
165 recovery or payment described in Subsection (1)(a)(i) is submitted later than three years after
166 the day on which the health care item or service upon which the claim is based was provided.
167 Section 4. Section 31A-4-107.5 is enacted to read:
168 31A-4-107.5. Penalty for failure of a regulated health insurance entity to fulfill
169 duties related to state claims for Medicaid payment or recovery.
170 (1) For purposes of this section, "regulated health insurance entity" means a health
171 insurance entity, as defined in Section 26-19-2 , that is subject to regulation by the department.
172 (2) If a regulated health insurance entity fails to comply with the provisions of Section
173 26-19-4.7 :
174 (a) the commissioner may revoke or suspend, in whole or in part, a license, certificate
175 of authority, registration, or other authority that is granted by the commissioner to the regulated
176 health insurance entity; and
177 (b) the regulated health insurance entity is subject to the penalties and procedures
178 provided for in Section 31A-2-308 .
179 Section 5. Section 75-7-508 is amended to read:
180 75-7-508. Notice to creditors.
181 (1) A trustee for an inter vivos revocable trust, upon the death of the settlor, may
182 publish a notice to creditors once a week for three successive weeks in a newspaper of general

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- 7 - 183 circulation in the county where the settlor resided at the time of death. The notice required by
184 this Subsection (1) must:
185 (a) provide the trustee's name and address; and
186 (b) notify creditors:
187 (i) of the deceased settlor; and
188 (ii) to present their claims within three months after the date of the first publication of
189 the notice or be forever barred from presenting the claim.
190 (2) A trustee shall give written notice by mail or other delivery to any known creditor
191 of the deceased settlor, notifying the creditor to present his claim within 90 days from the
192 published notice if given as provided in Subsection (1) or within 60 days from the mailing or
193 other delivery of the notice, whichever is later, or be forever barred. Written notice shall be the
194 notice described in Subsection (1) or a similar notice.
195 (3) (a) If the deceased settlor received medical assistance, as defined in [Subsection
196 26-19-2 (6)] Section 26-19-2 , at any time after the age of 55, the trustee for an inter vivos
197 revocable trust, upon the death of the settlor, shall mail or deliver written notice to the Director
198 of the Office of Recovery Services, on behalf of the Department of Health, to present any claim
199 under Section 26-19-13.5 within 60 days from the mailing or other delivery of notice,
200 whichever is later, or be forever barred.
201 (b) If the trustee does not mail notice to the director of the Office of Recovery Services
202 on behalf of the department in accordance with Subsection (3)(a), the department shall have
203 one year from the death of the settlor to present its claim.
204 (4) The trustee shall not be liable to any creditor or to any successor of the deceased
205 settlor for giving or failing to give notice under this section.

Legislative Review Note
as of 1-9-07 8:52 AM

Office of Legislative Research and General Counsel