S.B. 50

1

MEDICAL BENEFITS RECOVERY
2 AMENDMENTS
3 2008 GENERAL SESSION
4 STATE OF UTAH
5 Chief Sponsor: Allen M. Christensen
6 House Sponsor: Bradley G. Last
7
8 LONG TITLE
9 Committee Note:
10 The Medicaid Interim Committee recommended this bill.
11 General Description:
12 This bill amends the Medical Benefits Recovery Act to provide that a lien, to recover
13 medical assistance benefits provided by the state, may be imposed against the real
14 property of a person who is an inpatient in a care facility, during the life of that person.
15 The bill also amends provisions related to the recovery of medical assistance from an
16 estate or trust and recodifies the Medical Benefits Recovery Act.
17 Highlighted Provisions:
18 This bill:
19 . defines terms;
20 . recodifies the Medical Benefits Recovery Act;
21 . modifies provisions related to recovery of medical assistance from a recipient's
22 estate or a trust, so that recovery can be made as soon as an exception to recovery,
23 relating to a surviving spouse or child, is no longer in effect;
24 . provides for the imposition of a lien, authorized by the federal Tax Equity and
25 Fiscal Responsibility Act of 1982 (TEFRA), against the real property of a person
26 who is an inpatient in a care facility, during the life of that person;
27 . establishes procedures, requirements, and exemptions, relating to imposing a

28 TEFRA lien;
29 . establishes a rebuttable presumption that a person who is an inpatient in a care
30 facility cannot reasonably be expected to be discharged from the care facility and
31 return to the person's home, if the person has been an inpatient in a care facility for a
32 period of at least 180 consecutive days;
33 . provides for review and appeal of a decision to impose a TEFRA lien;
34 . provides for the dissolution and removal of a TEFRA lien;
35 . provides that an agency that the department contracts with to recover funds paid for
36 medical assistance under the Medical Benefits Recovery Act shall be the sole
37 agency that imposes or removes a TEFRA lien; and
38 . makes technical changes.
39 Monies Appropriated in this Bill:
40 None
41 Other Special Clauses:
42 None
43 Utah Code Sections Affected:
44 AMENDS:
45 31A-4-107.5, as enacted by Laws of Utah 2007, Chapter 64
46 31A-22-610, as last amended by Laws of Utah 2007, Chapter 307
47 31A-22-610.5, as last amended by Laws of Utah 2004, Chapters 108 and 185
48 34A-2-417, as last amended by Laws of Utah 2007, Chapter 62
49 34A-2-422, as last amended by Laws of Utah 2007, Chapter 63
50 75-3-805, as last amended by Laws of Utah 1998, Chapter 145
51 75-7-508, as last amended by Laws of Utah 2007, Chapter 64
52 75-7-511, as renumbered and amended by Laws of Utah 2004, Chapter 89
53 ENACTS:
54 26-19-404, Utah Code Annotated 1953
55 26-19-501, Utah Code Annotated 1953
56 26-19-502, Utah Code Annotated 1953
57 26-19-503, Utah Code Annotated 1953
58 26-19-504, Utah Code Annotated 1953

59 26-19-505, Utah Code Annotated 1953
60 26-19-506, Utah Code Annotated 1953
61 26-19-507, Utah Code Annotated 1953
62 26-19-508, Utah Code Annotated 1953
63 26-19-509, Utah Code Annotated 1953
64 RENUMBERS AND AMENDS:
65 26-19-101, (Renumbered from 26-19-1, as enacted by Laws of Utah 1981, Chapter 126)
66 26-19-102, (Renumbered from 26-19-2, as last amended by Laws of Utah 2007,
67 Chapter 64)
68 26-19-103, (Renumbered from 26-19-3, as last amended by Laws of Utah 1984,
69 Chapter 34)
70 26-19-201, (Renumbered from 26-19-4.5, as last amended by Laws of Utah 1998,
71 Chapter 145)
72 26-19-301, (Renumbered from 26-19-4.7, as enacted by Laws of Utah 2007, Chapter
73 64)
74 26-19-302, (Renumbered from 26-19-14, as last amended by Laws of Utah 1995,
75 Chapter 102)
76 26-19-303, (Renumbered from 26-19-9.5, as enacted by Laws of Utah 2004, Chapter
77 72)
78 26-19-304, (Renumbered from 26-19-9, as enacted by Laws of Utah 1993, Chapter 145)
79 26-19-305, (Renumbered from 26-19-8, as last amended by Laws of Utah 2007,
80 Chapter 64)
81 26-19-401, (Renumbered from 26-19-5, as last amended by Laws of Utah 2005,
82 Chapter 103)
83 26-19-402, (Renumbered from 26-19-6, as last amended by Laws of Utah 2004,
84 Chapter 72)
85 26-19-403, (Renumbered from 26-19-7, as last amended by Laws of Utah 2005,
86 Chapter 103)
87 26-19-405, (Renumbered from 26-19-13.5, as last amended by Laws of Utah 2004,
88 Chapter 72)
89 26-19-406, (Renumbered from 26-19-13.7, as enacted by Laws of Utah 1998, Chapter

90 145)
91 26-19-601, (Renumbered from 26-19-9.7, as enacted by Laws of Utah 2004, Chapter
92 72)
93 26-19-602, (Renumbered from 26-19-19, as enacted by Laws of Utah 1998, Chapter
94 145)
95 26-19-603, (Renumbered from 26-19-15, as last amended by Laws of Utah 1984,
96 Chapter 34)
97 26-19-604, (Renumbered from 26-19-16, as enacted by Laws of Utah 1981, Chapter
98 126)
99 26-19-605, (Renumbered from 26-19-17, as last amended by Laws of Utah 1984,
100 Chapter 34)
101
102 Be it enacted by the Legislature of the state of Utah:
103 Section 1. Section 26-19-101 , which is renumbered from Section 26-19-1 is
104 renumbered and amended to read:
105 CHAPTER 19. MEDICAL BENEFITS RECOVERY ACT
106 Part 1. General Provisions
107 [26-19-1]. 26-19-101. Title.
108 This chapter [shall be] is known [and may be cited] as the "Medical Benefits Recovery
109 Act."
110 Section 2. Section 26-19-102 , which is renumbered from Section 26-19-2 is
111 renumbered and amended to read:
112 [26-19-2]. 26-19-102. Definitions.
113 As used in this chapter:
114 (1) "Annuity" shall have the same meaning as provided in Section 31A-1-301 .
115 (2) "Care facility" means:
116 (a) a nursing facility;
117 (b) an intermediate care facility for the mentally retarded; or
118 (c) any other medical institution.
119 [(2)] (3) "Claim" means:
120 (a) a request or demand for payment; or

121 (b) a cause of action for money or damages arising under any law.
122 [(3)] (4) "Employee welfare benefit plan" means a medical insurance plan developed
123 by an employer under 29 U.S.C. Section 1001, et seq., the Employee Retirement Income
124 Security Act of 1974 as amended.
125 [(4)] (5) "Estate" means, regarding a deceased recipient:
126 (a) all real and personal property or other assets included within a decedent's estate as
127 defined in Section 75-1-201 ;
128 (b) the decedent's augmented estate as defined in Section 75-2-203 ; and
129 (c) that part of other real or personal property in which the decedent had a legal interest
130 at the time of death including assets conveyed to a survivor, heir, or assign of the decedent
131 through joint tenancy, tenancy in common, survivorship, life estate, living trust, or other
132 arrangement.
133 [(5)] (6) "Health insurance entity" means:
134 (a) an insurer;
135 (b) a person who administers, manages, provides, offers, sells, carries, or underwrites
136 health insurance, as defined in Section 31A-1-301 ;
137 (c) a self-insured plan;
138 (d) a group health plan, as defined in Subsection 607(1) of the federal Employee
139 Retirement Income Security Act of 1974;
140 (e) a service benefit plan;
141 (f) a managed care organization;
142 (g) a pharmacy benefit manager;
143 (h) an employee welfare benefit plan; or
144 (i) a person who is, by statute, contract, or agreement, legally responsible for payment
145 of a claim for a health care item or service.
146 (7) "Inpatient" means a person who is a patient and a resident of a care facility.
147 [(6)] (8) "Insurer" includes:
148 (a) a group health plan as defined in Subsection 607(1) of the federal Employee
149 Retirement Income Security Act of 1974;
150 (b) a health maintenance organization; and
151 (c) any entity offering a health service benefit plan.

152 [(7)] (9) "Medical assistance" means:
153 (a) all funds expended for the benefit of a recipient under Title 26, Chapter 18, Medical
154 Assistance Act, or under Titles XVIII and XIX, federal Social Security Act; and
155 (b) any other services provided for the benefit of a recipient by a prepaid health care
156 delivery system under contract with the department.
157 [(8)] (10) "Office of Recovery Services" means the Office of Recovery Services within
158 the Department of Human Services.
159 [(9)] (11) "Provider" means a person or entity who provides services to a recipient.
160 [(10)] (12) "Recipient" means:
161 (a) a person who has applied for or received medical assistance from the state;
162 (b) the guardian, conservator, or other personal representative of a person under
163 Subsection [(10)] (12)(a) if the person is a minor or an incapacitated person; or
164 (c) the estate and survivors of a person under Subsection [(10)] (12)(a) if the person is
165 deceased.
166 [(11)] (13) "State plan" means the state Medicaid program as enacted in accordance
167 with Title XIX, federal Social Security Act.
168 (14) "TEFRA lien" means a lien, authorized under the Tax Equity and Fiscal
169 Responsibility Act of 1982, against the real property of an individual prior to the individual's
170 death, as described in 42 U.S.C. 1396p.
171 [(12)] (15) "Third party" includes:
172 (a) an individual, institution, corporation, public or private agency, trust, estate,
173 insurance carrier, employee welfare benefit plan, health maintenance organization, health
174 service organization, preferred provider organization, governmental program such as Medicare,
175 CHAMPUS, and workers' compensation, which may be obligated to pay all or part of the
176 medical costs of injury, disease, or disability of a recipient, unless any of these are excluded by
177 department rule; and
178 (b) a spouse or a parent who:
179 (i) may be obligated to pay all or part of the medical costs of a recipient under law or
180 by court or administrative order; or
181 (ii) has been ordered to maintain health, dental, or accident and health insurance to
182 cover medical expenses of a spouse or dependent child by court or administrative order.

183 [(13)] (16) "Trust" shall have the same meaning as provided in Section 75-1-201 .
184 Section 3. Section 26-19-103 , which is renumbered from Section 26-19-3 is
185 renumbered and amended to read:
186 [26-19-3]. 26-19-103. Program established by department -- Promulgation of
187 rules.
188 (1) The department shall establish and maintain a program for the recoupment of
189 medical assistance.
190 (2) The department may promulgate rules to implement the purposes of this chapter.
191 Section 4. Section 26-19-201 , which is renumbered from Section 26-19-4.5 is
192 renumbered and amended to read:
193 Part 2. Assignment of Rights
194 [26-19-4.5]. 26-19-201. Assignment of rights to benefits.
195 (1) (a) To the extent that medical assistance is actually provided to a recipient, all
196 benefits for medical services or payments from a third party otherwise payable to or on behalf
197 of a recipient are assigned by operation of law to the department if the department provides, or
198 becomes obligated to provide, medical assistance, regardless of who made application for the
199 benefits on behalf of the recipient.
200 (b) The assignment:
201 (i) authorizes the department to submit its claim to the third party and authorizes
202 payment of benefits directly to the department; and
203 (ii) is effective for all medical assistance.
204 (2) The department may recover the assigned benefits or payments in accordance with
205 Section [ 26-19-5 ] 26-19-401 and as otherwise provided by law.
206 (3) The assignment of benefits includes medical support and third party payments
207 ordered, decreed, or adjudged by any court of this state or any other state or territory of the
208 United States. That assignment is not in lieu of, and does not supersede or alter any other court
209 order, decree, or judgment.
210 (4) When an assignment takes effect, the recipient is entitled to receive medical
211 assistance, and the benefits paid to the department are a reimbursement to the department.
212 Section 5. Section 26-19-301 , which is renumbered from Section 26-19-4.7 is
213 renumbered and amended to read:

214 Part 3. Insurance Provisions
215 [26-19-4.7]. 26-19-301. Health insurance entity -- Duties related to state claims
216 for Medicaid payment or recovery.
217 As a condition of doing business in the state, a health insurance entity shall:
218 (1) with respect to a person who is eligible for, or is provided, medical assistance under
219 the state plan, upon the request of the Department of Health, provide information to determine:
220 (a) during what period the person, or the spouse or dependent of the person, may be or
221 may have been, covered by the health insurance entity; and
222 (b) the nature of the coverage that is or was provided by the health insurance entity
223 described in Subsection (1)(a), including the name, address, and identifying number of the
224 plan;
225 (2) accept the state's right of recovery and the assignment to the state of any right of a
226 person to payment from a party for an item or service for which payment has been made under
227 the state plan;
228 (3) respond to any inquiry by the Department of Health regarding a claim for payment
229 for any health care item or service that is submitted no later than three years after the day on
230 which the health care item or service is provided; and
231 (4) not deny a claim submitted by the Department of Health solely on the basis of the
232 date of submission of the claim, the type or format of the claim form, or failure to present
233 proper documentation at the point-of-sale that is the basis for the claim, if:
234 (a) the claim is submitted no later than three years after the day on which the item or
235 service is furnished; and
236 (b) any action by the Department of Health to enforce the rights of the state with
237 respect to the claim is commenced no later than six years after the day on which the claim is
238 submitted.
239 Section 6. Section 26-19-302 , which is renumbered from Section 26-19-14 is
240 renumbered and amended to read:
241 [26-19-14]. 26-19-302. Insurance policies not to deny or reduce benefits of
242 persons eligible for state medical assistance -- Exemptions.
243 (1) A policy of accident or sickness insurance issued or renewed after May 12, 1981,
244 may not contain any provision denying or reducing benefits because services are rendered to an

245 insured or dependent who is eligible for or receiving medical assistance from the state.
246 (2) After May 12, 1981, no association, corporation, or organization may deliver, issue
247 for delivery, or renew any subscriber's contract which contains any provisions denying or
248 reducing benefits because services are rendered to a subscriber or dependent who is eligible for
249 or receiving medical assistance from the state.
250 (3) After May 12, 1981, no association, corporation, business, or organization
251 authorized to do business in this state and which provides or pays for any health care benefits
252 may deny or reduce benefits because services are rendered to a beneficiary who is eligible for
253 or receiving medical assistance from the state.
254 (4) Notwithstanding Subsection (1), (2), or (3), the Utah State Public Employees
255 Health Program, administered by the Utah State Retirement Board, is not required to reimburse
256 any agency of state government for custodial care which the agency provides, through its staff
257 or facilities, to members of the Utah State Public Employees Health Program.
258 (5) This section is subject to the provisions of Subsection 31A-22-610.5 (3).
259 Section 7. Section 26-19-303 , which is renumbered from Section 26-19-9.5 is
260 renumbered and amended to read:
261 [26-19-9.5]. 26-19-303. Availability of insurance policy.
262 If the third party does not pay the department's claim or lien within 30 days from the
263 date the claim or lien is received, the third party shall:
264 (1) provide a written explanation if the claim is denied;
265 (2) specifically describe and request any additional information from the department
266 that is necessary to process the claim; and
267 (3) provide the department or its agent a copy of any relevant or applicable insurance
268 or benefit policy.
269 Section 8. Section 26-19-304 , which is renumbered from Section 26-19-9 is
270 renumbered and amended to read:
271 [26-19-9]. 26-19-304. Employee benefit plans.
272 As allowed pursuant to 29 U.S.C. Section 1144, an employee benefit plan may not
273 include any provision that has the effect of limiting or excluding coverage or payment for any
274 health care for an individual who would otherwise be covered or entitled to benefits or services
275 under the terms of the employee benefit plan based on the fact that the individual is eligible for

276 or is provided services under the state plan.
277 Section 9. Section 26-19-305 , which is renumbered from Section 26-19-8 is
278 renumbered and amended to read:
279 [26-19-8]. 26-19-305. Statute of limitations -- Survival of right of action --
280 Insurance policy not to limit time allowed for recovery.
281 (1) (a) Subject to Subsection (6), action commenced by the department under this
282 chapter against a health insurance entity must be commenced within:
283 (i) subject to Subsection (7), six years after the day on which the department submits
284 the claim for recovery or payment for the health care item or service upon which the action is
285 based; or
286 (ii) six months after the date of the last payment for medical assistance, whichever is
287 later.
288 (b) An action against any other third party, the recipient, or anyone to whom the
289 proceeds are payable must be commenced within:
290 (i) four years after the date of the injury or onset of the illness; or
291 (ii) six months after the date of the last payment for medical assistance, whichever is
292 later.
293 (2) The death of the recipient does not abate any right of action established by this
294 chapter.
295 (3) (a) No insurance policy issued or renewed after June 1, 1981, may contain any
296 provision that limits the time in which the department may submit its claim to recover medical
297 assistance benefits to a period of less than 24 months from the date the provider furnishes
298 services or goods to the recipient.
299 (b) No insurance policy issued or renewed after April 30, 2007, may contain any
300 provision that limits the time in which the department may submit its claim to recover medical
301 assistance benefits to a period of less than that described in Subsection (1)(a).
302 (4) The provisions of this section do not apply to Section [ 26-19-13.5 ] 26-19-405 or
303 Part 5, TEFRA Liens.
304 (5) The provisions of this section supercede any other sections regarding the time limit
305 in which an action must be commenced, including Section 75-7-509 .
306 (6) (a) Subsection (1)(a) extends the statute of limitations on a cause of action

307 described in Subsection (1)(a) that was not time-barred on or before April 30, 2007.
308 (b) Subsection (1)(a) does not revive a cause of action that was time-barred on or
309 before April 30, 2007.
310 (7) An action described in Subsection (1)(a) may not be commenced if the claim for
311 recovery or payment described in Subsection (1)(a)(i) is submitted later than three years after
312 the day on which the health care item or service upon which the claim is based was provided.
313 Section 10. Section 26-19-401 , which is renumbered from Section 26-19-5 is
314 renumbered and amended to read:
315 Part 4. General Recovery Provisions
316 [26-19-5]. 26-19-401. Recovery of medical assistance from third party -- Lien
317 -- Notice -- Action -- Compromise or waiver -- Recipient's right to action protected.
318 (1) (a) When the department provides or becomes obligated to provide medical
319 assistance to a recipient that a third party is obligated to pay for, the department may recover
320 the medical assistance directly from that third party.
321 (b) Any claim arising under Subsection (1)(a) or Section [ 26-19-4.5 ] 26-19-201 to
322 recover medical assistance provided to a recipient is a lien against any proceeds payable to or
323 on behalf of the recipient by that third party. This lien has priority over all other claims to the
324 proceeds, except claims for [attorney's] attorney fees and costs authorized under Subsection
325 [ 26-19-7 ] 26-19-403 (2)(c)(ii).
326 (2) (a) The department shall mail or deliver written notice of its claim or lien to the
327 third party at its principal place of business or last-known address.
328 (b) The notice shall include:
329 (i) the recipient's name;
330 (ii) the approximate date of illness or injury;
331 (iii) a general description of the type of illness or injury; and
332 (iv) if applicable, the general location where the injury is alleged to have occurred.
333 (3) The department may commence an action on its claim or lien in its own name, but
334 that claim or lien is not enforceable as to a third party unless:
335 (a) the third party receives written notice of the department's claim or lien before it
336 settles with the recipient; or
337 (b) the department has evidence that the third party had knowledge that the department

338 provided or was obligated to provide medical assistance.
339 (4) The department may:
340 (a) waive a claim or lien against a third party in whole or in part; or
341 (b) compromise, settle, or release a claim or lien.
342 (5) An action commenced under this section does not bar an action by a recipient or a
343 dependent of a recipient for loss or damage not included in the department's action.
344 (6) The department's claim or lien on proceeds under this section is not affected by the
345 transfer of the proceeds to a trust, annuity, financial account, or other financial instrument.
346 Section 11. Section 26-19-402 , which is renumbered from Section 26-19-6 is
347 renumbered and amended to read:
348 [26-19-6]. 26-19-402. Action by department -- Notice to recipient.
349 (1) (a) Within 30 days after commencing an action under Subsection [ 26-19-5 ]
350 26-19-401 (3), the department shall give the recipient, [his] the recipient's guardian, personal
351 representative, trustee, estate, or survivor, whichever is appropriate, written notice of the action
352 by:
353 (i) personal service or certified mail to the last known address of the person receiving
354 the notice; or
355 (ii) if no last-known address is available, by publishing a notice once a week for three
356 successive weeks in a newspaper of general circulation in the county where the recipient
357 resides.
358 (b) Proof of service shall be filed in the action.
359 (c) The recipient may intervene in the department's action at any time before trial.
360 (2) The notice required by Subsection (1) shall name the court in which the action is
361 commenced and advise the recipient of:
362 (a) the right to intervene in the proceeding;
363 (b) the right to obtain a private attorney; and
364 (c) the department's right to recover medical assistance directly from the third party.
365 Section 12. Section 26-19-403 , which is renumbered from Section 26-19-7 is
366 renumbered and amended to read:
367 [26-19-7]. 26-19-403. Notice of claim by recipient -- Department response --
368 Conditions for proceeding -- Collection agreements.

369 (1) (a) A recipient may not file a claim, commence an action, or settle, compromise,
370 release, or waive a claim against a third party for recovery of medical costs for an injury,
371 disease, or disability for which the department has provided or has become obligated to provide
372 medical assistance, without the department's written consent as provided in Subsection (2)(b)
373 or (4).
374 (b) For purposes of Subsection (1)(a), consent may be obtained if:
375 (i) a recipient who files a claim, or commences an action against a third party notifies
376 the department in accordance with Subsection (1)(d) within ten days of making [his] the
377 recipient's claim or commencing an action; or
378 (ii) an attorney, who has been retained by the recipient to file a claim, or commence an
379 action against a third party, notifies the department in accordance with Subsection (1)(d) of the
380 recipient's claim:
381 (A) within 30 days after being retained by the recipient for that purpose; or
382 (B) within 30 days from the date the attorney either knew or should have known that
383 the recipient received medical assistance from the department.
384 (c) Service of the notice of claim to the department shall be made by certified mail,
385 personal service, or by e-mail in accordance with Rule 5 of the Utah Rules of Civil Procedure,
386 to the director of the Office of Recovery Services.
387 (d) The notice of claim shall include the following information:
388 (i) the name of the recipient;
389 (ii) the recipient's Social Security number;
390 (iii) the recipient's date of birth;
391 (iv) the name of the recipient's attorney if applicable;
392 (v) the name or names of individuals or entities against whom the recipient is making
393 the claim, if known;
394 (vi) the name of the third party's insurance carrier, if known;
395 (vii) the date of the incident giving rise to the claim; and
396 (viii) a short statement identifying the nature of the recipient's claim.
397 (2) (a) Within 30 days of receipt of the notice of the claim required in Subsection (1),
398 the department shall acknowledge receipt of the notice of the claim to the recipient or the
399 recipient's attorney and shall notify the recipient or the recipient's attorney in writing of the

400 following:
401 (i) if the department has a claim or lien pursuant to Section [ 26-19-5 ] 26-19-401 or has
402 become obligated to provide medical assistance; and
403 (ii) whether the department is denying or granting written consent in accordance with
404 Subsection (1)(a).
405 (b) The department shall provide the recipient's attorney the opportunity to enter into a
406 collection agreement with the department, with the recipient's consent, unless:
407 (i) the department, prior to the receipt of the notice of the recipient's claim pursuant to
408 Subsection (1), filed a written claim with the third party, the third party agreed to make
409 payment to the department before the date the department received notice of the recipient's
410 claim, and the agreement is documented in the department's record; or
411 (ii) there has been a failure by the recipient's attorney to comply with any provision of
412 this section by:
413 (A) failing to comply with the notice provisions of this section;
414 (B) failing or refusing to enter into a collection agreement;
415 (C) failing to comply with the terms of a collection agreement with the department; or
416 (D) failing to disburse funds owed to the state in accordance with this section.
417 (c) (i) The collection agreement shall be:
418 (A) consistent with this section and the attorney's obligation to represent the recipient
419 and represent the state's claim; and
420 (B) state the terms under which the interests of the department may be represented in
421 an action commenced by the recipient.
422 (ii) If the recipient's attorney enters into a written collection agreement with the
423 department, or includes the department's claim in the recipient's claim or action pursuant to
424 Subsection (4), the department shall pay [attorney's] attorney fees at the rate of 33.3% of the
425 department's total recovery and shall pay a proportionate share of the litigation expenses
426 directly related to the action.
427 (d) The department is not required to enter into a collection agreement with the
428 recipient's attorney for collection of personal injury protection under Subsection
429 31A-22-302 (2).
430 (3) (a) If the department receives notice pursuant to Subsection (1), and notifies the

431 recipient and the recipient's attorney that the department will not enter into a collection
432 agreement with the recipient's attorney, the recipient may proceed with the recipient's claim or
433 action against the third party if the recipient excludes from the claim:
434 (i) any medical expenses paid by the department; or
435 (ii) any medical costs for which the department is obligated to provide medical
436 assistance.
437 (b) When a recipient proceeds with a claim under Subsection (3)(a), the recipient shall
438 provide written notice to the third party of the exclusion of the department's claim for expenses
439 under Subsection (3)(a)(i) or (ii).
440 (4) If the department receives notice pursuant to Subsection (1), and does not respond
441 within 30 days to the recipient or the recipient's attorney, the recipient or the recipient's
442 attorney:
443 (a) may proceed with the recipient's claim or action against the third party;
444 (b) may include the state's claim in the recipient's claim or action; and
445 (c) may not negotiate, compromise, settle, or waive the department's claim without the
446 department's consent.
447 [(5) The department has an unconditional right to intervene in an action commenced by
448 a recipient against a third party for the purpose of recovering medical costs for which the
449 department has provided or has become obligated to provide medical assistance.]
450 [(6) (a) If the recipient proceeds without complying with the provisions of this section,
451 the department is not bound by any decision, judgment, agreement, settlement, or compromise
452 rendered or made on the claim or in the action.]
453 [(b) The department may recover in full from the recipient or any party to which the
454 proceeds were made payable all medical assistance which it has provided and retains its right to
455 commence an independent action against the third party, subject to Subsection 26-19-5 (3).]
456 [(7) Any amounts assigned to and recoverable by the department pursuant to Sections
457 26-19-4.5 and 26-19-5 collected directly by the recipient shall be remitted to the Bureau of
458 Medical Collections within the Office of Recovery Services no later than five business days
459 after receipt.]
460 [(8) (a) Any amounts assigned to and recoverable by the department pursuant to
461 Sections 26-19-4.5 and 26-19-5 collected directly by the recipient's attorney must be remitted

462 to the Bureau of Medical Collections within the Office of Recovery Services no later than 30
463 days after the funds are placed in the attorney's trust account.]
464 [(b) The date by which the funds must be remitted to the department may be modified
465 based on agreement between the department and the recipient's attorney.]
466 [(c) The department's consent to another date for remittance may not be unreasonably
467 withheld.]
468 [(d) If the funds are received by the recipient's attorney, no disbursements shall be
469 made to the recipient or the recipient's attorney until the department's claim has been paid.]
470 [(9) A recipient or recipient's attorney who knowingly and intentionally fails to comply
471 with this section is liable to the department for:]
472 [(a) the amount of the department's claim or lien pursuant to Subsection (5);]
473 [(b) a penalty equal to 10% of the amount of the department's claim; and]
474 [(c) attorney's fees and litigation expenses related to recovering the department's
475 claim.]
476 Section 13. Section 26-19-404 is enacted to read:
477 26-19-404. Department's right to intervene -- Department's interests protected --
478 Remitting funds -- Disbursements -- Liability and penalty for noncompliance.
479 (1) The department has an unconditional right to intervene in an action commenced by
480 a recipient against a third party for the purpose of recovering medical costs for which the
481 department has provided or has become obligated to provide medical assistance.
482 (2) (a) If the recipient proceeds without complying with the provisions of Section
483 26-19-403 or this section, the department is not bound by any decision, judgment, agreement,
484 settlement, or compromise rendered or made on the claim or in the action.
485 (b) The department:
486 (i) may recover in full from the recipient, or any party to which the proceeds were
487 made payable, all medical assistance that the department has provided; and
488 (ii) retains the right to commence an independent action against the third party, subject
489 to Subsection 26-19-401 (3).
490 (3) Any amounts assigned to and recoverable by the department pursuant to Sections
491 26-19-201 and 26-19-401 collected directly by the recipient shall be remitted to the Bureau of
492 Medical Collections within the Office of Recovery Services no later than five business days

493 after receipt.
494 (4) (a) Any amounts assigned to and recoverable by the department pursuant to
495 Sections 26-19-201 and 26-19-401 collected directly by the recipient's attorney must be
496 remitted to the Bureau of Medical Collections within the Office of Recovery Services no later
497 than 30 days after the funds are placed in the attorney's trust account.
498 (b) The date by which the funds must be remitted to the department may be modified
499 based on agreement between the department and the recipient's attorney.
500 (c) The department's consent to another date for remittance may not be unreasonably
501 withheld.
502 (d) If the funds are received by the recipient's attorney, no disbursements shall be made
503 to the recipient or the recipient's attorney until the department's claim has been paid.
504 (5) A recipient or recipient's attorney who knowingly and intentionally fails to comply
505 with Section 26-19-403 or this section is liable to the department for:
506 (a) the amount of the department's claim or lien pursuant to Subsection (1);
507 (b) a penalty equal to 10% of the amount of the department's claim; and
508 (c) attorney fees and litigation expenses related to recovering the department's claim.
509 Section 14. Section 26-19-405 , which is renumbered from Section 26-19-13.5 is
510 renumbered and amended to read:
511 [26-19-13.5]. 26-19-405. Estate and trust recovery.
512 (1) Upon a recipient's death, the department may recover from the recipient's estate and
513 any trust, in which the recipient is the grantor and a beneficiary, medical assistance correctly
514 provided for the benefit of the recipient when [he] the recipient was 55 years of age or older [if,
515 at the time of death], so long as the recipient has no:
516 (a) surviving spouse; or
517 (b) child:
518 (i) younger than 21 years of age; or
519 (ii) who is blind or permanently and totally disabled.
520 (2) (a) The amount of medial assistance correctly provided for the benefit of a recipient
521 and recoverable under this section is a lien against the estate of the deceased recipient or any
522 trust when the recipient is the grantor and a beneficiary.
523 (b) The lien holds the same priority as reasonable and necessary medical expenses of

524 the last illness as provided in Section 75-3-805 .
525 (3) (a) The department shall perfect the lien by filing a notice in the court of
526 appropriate jurisdiction for the amount of the lien, in the same manner as a creditor's claim is
527 filed, prior to final distribution.
528 (b) The department may file an amended lien prior to the entry of the final order
529 closing the estate.
530 (4) Claims against a deceased recipient's inter vivos trust shall be presented in
531 accordance with Sections 75-7-509 and 75-7-510 .
532 (5) Any trust provision that denies recovery for medical assistance is void at the time of
533 its making.
534 (6) Nothing in this section affects the right of the department to recover Medicaid
535 assistance before a recipient's death under Section [ 26-19-4.5 ] 26-19-201 or [Section
536 26-19-13.7 ] 26-19-406 .
537 Section 15. Section 26-19-406 , which is renumbered from Section 26-19-13.7 is
538 renumbered and amended to read:
539 [26-19-13.7]. 26-19-406. Recovery from recipient of incorrectly provided
540 medical assistance.
541 The department may:
542 (1) recover medical assistance incorrectly provided, whether due to administrative or
543 factual error or fraud, from the recipient or [his] the recipient's estate; and
544 (2) pursuant to a judgment, impose a lien against real property of the recipient.
545 Section 16. Section 26-19-501 is enacted to read:
546 Part 5. TEFRA Liens
547 26-19-501. TEFRA liens authorized -- Grounds for TEFRA liens -- Exemptions.
548 (1) Except as provided in Subsections (2) and (3), the department may impose a
549 TEFRA lien on the real property of a person for the amount of medical assistance provided for,
550 or to, the person while the person is an inpatient in a care facility, if:
551 (a) the person is an inpatient in a care facility;
552 (b) the person is required, as a condition of receiving services under the state plan, to
553 spend for costs of medical care all but a minimal amount of the person's income required for
554 personal needs; and

555 (c) the department determines that the person cannot reasonably be expected to:
556 (i) be discharged from the care facility; and
557 (ii) return to the person's home.
558 (2) The department may not impose a lien on the home of a person described in
559 Subsection (1), if any of the following people are lawfully residing in the home:
560 (a) the spouse of the person;
561 (b) a child of the person, if the child is:
562 (i) under 21 years of age; or
563 (ii) blind or permanently and totally disabled, as defined in Title 42 U.S.C.
564 1382c(a)(3)(F); or
565 (c) a sibling of the person, if the sibling:
566 (i) has an equity interest in the home; and
567 (ii) resided in the home for at least one year immediately preceding the day on which
568 the person was admitted to the care facility.
569 (3) The department may not impose a TEFRA lien on the real property of a person,
570 unless:
571 (a) the person has been an inpatient in a care facility for the 180-day period
572 immediately preceding the day on which the lien is imposed;
573 (b) the department serves:
574 (i) a preliminary notice of intent to impose a TEFRA lien relating to the real property,
575 in accordance with Section 26-19-503 ; and
576 (ii) a final notice of intent to impose a TEFRA lien relating to the real property, in
577 accordance with Section 26-19-504 ; and
578 (c) the person:
579 (i) does not file a timely request for review of the department's decision under Title 63,
580 Chapter 46b, Administrative Procedures Act; or
581 (ii) the department's decision is upheld upon final review or appeal under Title 63,
582 Chapter 46b, Administrative Procedures Act.
583 Section 17. Section 26-19-502 is enacted to read:
584 26-19-502. Presumption of permanency.
585 There is a rebuttable presumption that a person who is an inpatient in a care facility

586 cannot reasonably be expected to be discharged from a care facility and return to the person's
587 home, if the person has been an inpatient in a care facility for a period of at least 180
588 consecutive days.
589 Section 18. Section 26-19-503 is enacted to read:
590 26-19-503. Preliminary notice of intent to impose a TEFRA lien.
591 (1) Prior to imposing a TEFRA lien on real property, the department shall serve a
592 preliminary notice of intent to impose a TEFRA lien, on the person described in Subsection
593 26-19-501 (1), who owns the property.
594 (2) The preliminary notice of intent shall:
595 (a) be served in person, or by certified mail, on the person described in Subsection
596 26-19-501 (1), and, if the department is aware that the person has a legally authorized
597 representative, on the representative;
598 (b) include a statement indicating that, according to the department's records, the
599 person:
600 (i) meets the criteria described in Subsections 26-19-501 (1)(a) and (b);
601 (ii) has been an inpatient in a care facility for a period of at least 180 days immediately
602 preceding the day on which the department provides the notice to the person; and
603 (iii) is legally presumed to be in a condition where it cannot reasonably be expected
604 that the person will be discharged from the care facility and return to the person's home;
605 (c) indicate that the department intends to impose a TEFRA lien on real property
606 belonging to the person;
607 (d) describe the real property that the TEFRA lien will apply to;
608 (e) describe the current amount of, and purpose of, the TEFRA lien;
609 (f) indicate that the amount of the lien may continue to increase as the person continues
610 to receive medical assistance;
611 (g) indicate that the person may seek to prevent the TEFRA lien from being imposed
612 on the real property by providing documentation to the department that:
613 (i) establishes that the person does not meet the criteria described in Subsection
614 26-19-501 (1)(a) or (b);
615 (ii) establishes that the person has not been an inpatient in a care facility for a period of
616 at least 180 days;

617 (iii) rebuts the presumption described in Section 26-19-502 ; or
618 (iv) establishes that the real property is exempt from imposition of a TEFRA lien under
619 Subsection 26-19-501 (2);
620 (h) indicate that if the owner fails to provide the documentation described in
621 Subsection (2)(g) within 30 days after the day on which the preliminary notice of intent is
622 served, the department will issue a final notice of intent to impose a TEFRA lien on the real
623 property and will proceed to impose the lien;
624 (i) identify the type of documentation that the owner may provide to comply with
625 Subsection (2)(g);
626 (j) describe the circumstances under which a TEFRA lien is required to be released;
627 and
628 (k) describe the circumstances under which the department may seek to recover the
629 lien.
630 Section 19. Section 26-19-504 is enacted to read:
631 26-19-504. Final notice of intent to impose a TEFRA lien.
632 (1) The department may issue a final notice of intent to impose a TEFRA lien on real
633 property if:
634 (a) a preliminary notice of intent relating to the property is served in accordance with
635 Subsection 26-19-503 ;
636 (b) it is at least 30 days after the day on which the preliminary notice of intent was
637 served; and
638 (c) the department has not received documentation or other evidence that adequately
639 establishes that a TEFRA lien may not be imposed on the real property.
640 (2) The final notice of intent to impose a TEFRA lien on real property shall:
641 (a) be served in person, or by certified mail, on the person described in Subsection
642 26-19-501 (1), who owns the property, and, if the department is aware that the person has a
643 legally authorized representative, on the representative;
644 (b) indicate that the department has complied with the requirements for filing the final
645 notice of intent under Subsection (1);
646 (c) include a statement indicating that, according to the department's records, the
647 person:

648 (i) meets the criteria described in Subsections 26-19-501 (1)(a) and (b);
649 (ii) has been an inpatient in a care facility for a period of at least 180 days immediately
650 preceding the day on which the department provides the notice to the person; and
651 (iii) is legally presumed to be in a condition where it cannot reasonably be expected
652 that the person will be discharged from the care facility and return to the person's home;
653 (d) indicate that the department intends to impose a TEFRA lien on real property
654 belonging to the person;
655 (e) describe the real property that the TEFRA lien will apply to;
656 (f) describe the current amount of, and purpose of, the TEFRA lien;
657 (g) indicate that the amount of the lien may continue to increase as the person
658 continues to receive medical assistance;
659 (h) describe the circumstances under which a TEFRA lien is required to be released;
660 (i) describe the circumstances under which the department may seek to recover the
661 lien;
662 (j) describe the right of the person to challenge the decision of the department in an
663 adjudicative proceeding; and
664 (k) indicate that failure by the person to successfully challenge the decision of the
665 department will result in the TEFRA lien being imposed.
666 Section 20. Section 26-19-505 is enacted to read:
667 26-19-505. Review of department decision.
668 A person who has been served with a final notice of intent to impose a TEFRA lien
669 under Section 26-19-504 , may seek agency or judicial review of that decision under Title 63,
670 Chapter 46b, Administrative Procedures Act.
671 Section 21. Section 26-19-506 is enacted to read:
672 26-19-506. Dissolution and removal of TEFRA lien.
673 (1) A TEFRA lien shall dissolve and be removed by the department if the person
674 described in Subsection 26-19-501 (1):
675 (a) (i) is discharged from the care facility; and
676 (ii) returns to the person's home; or
677 (b) provides sufficient documentation to the department that:
678 (i) rebuts the presumption described in Section 26-19-502 ; or

679 (ii) any of the following people are lawfully residing in the person's home:
680 (A) the spouse of the person;
681 (B) a child of the person, if the child is:
682 (I) under 21 years of age; or
683 (II) blind or permanently and totally disabled, as defined in Title 42 U.S.C.
684 1382c(a)(3)(F); or
685 (C) a sibling of the person, if the sibling:
686 (I) has an equity interest in the home; and
687 (II) resided in the home for at least one year immediately preceding the day on which
688 the person was admitted to the care facility.
689 (2) A person described in Subsection 26-19-501 (1)(a) may, at any time after the
690 department has imposed a lien under this part, file a request for the department to remove the
691 lien.
692 (3) A request filed under Subsection (2) shall be considered and reviewed pursuant to
693 Title 63, Chapter 46b, Administrative Procedures Act.
694 Section 22. Section 26-19-507 is enacted to read:
695 26-19-507. Expenditures included in lien -- Other proceedings.
696 (1) A TEFRA lien imposed on real property under this part includes all expenses
697 relating to medical assistance provided or paid for under the state plan from the first day that
698 the person is placed in a care facility, regardless of when the lien is imposed or filed on the
699 property.
700 (2) Nothing in this part affects or prevents the department from bringing or pursuing
701 any other legally authorized action to recover medical assistance or to set aside a fraudulent or
702 improper conveyance.
703 Section 23. Section 26-19-508 is enacted to read:
704 26-19-508. Contract with another government agency.
705 If the department contracts with another government agency to recover funds paid for
706 medical assistance under this chapter, that government agency shall be the sole agency that
707 determines whether to impose or remove a TEFRA lien under this part.
708 Section 24. Section 26-19-509 is enacted to read:
709 26-19-509. Precedence of the Tax Equity and Fiscal Responsibility Act of 1982.

710 If any provision of this part conflicts with the requirements of the Tax Equity and Fiscal
711 Responsibility Act of 1982 for imposing a lien against the property of an individual prior to the
712 individual's death, under 42 U.S.C. 1396p, the provisions of the Tax Equity and Fiscal
713 Responsibility Act of 1982 take precedence and shall be complied with by the department.
714 Section 25. Section 26-19-601 , which is renumbered from Section 26-19-9.7 is
715 renumbered and amended to read:
716 Part 6. Miscellaneous Provisions
717 [26-19-9.7]. 26-19-601. Legal recognition of electronic claims records.
718 Pursuant to Title 46, Chapter 4, Uniform Electronic Transactions Act:
719 (1) a claim submitted to the department for payment may not be denied legal effect,
720 enforceability, or admissibility as evidence in any court in any civil action because it is in
721 electronic form; and
722 (2) a third party shall accept an electronic record of payments by the department for
723 medical services on behalf of a recipient as evidence in support of the department's claim.
724 Section 26. Section 26-19-602 , which is renumbered from Section 26-19-19 is
725 renumbered and amended to read:
726 [26-19-19]. 26-19-602. Direct payment to the department by third party.
727 (1) Any third party required to make payment to the department pursuant to this
728 chapter shall make the payment directly to the department or its designee.
729 (2) The department may negotiate a payment or payment instrument it receives in
730 connection with Subsection (1) without the cosignature or other participation of the recipient or
731 any other party.
732 Section 27. Section 26-19-603 , which is renumbered from Section 26-19-15 is
733 renumbered and amended to read:
734 [26-19-15]. 26-19-603. Attorney general or county attorney to represent
735 department.
736 The attorney general or a county attorney shall represent the department in any action
737 commenced under this chapter.
738 Section 28. Section 26-19-604 , which is renumbered from Section 26-19-16 is
739 renumbered and amended to read:
740 [26-19-16]. 26-19-604. Department's right to attorney fees and costs.

741 In any action brought by the department under this chapter in which it prevails, the
742 department shall recover along with the principal sum and interest, a reasonable [attorney's]
743 attorney fee and costs incurred.
744 Section 29. Section 26-19-605 , which is renumbered from Section 26-19-17 is
745 renumbered and amended to read:
746 [26-19-17]. 26-19-605. Application of provisions contrary to federal law
747 prohibited.
748 In no event shall any provision contained in this chapter be applied contrary to existing
749 federal law.
750 Section 30. Section 31A-4-107.5 is amended to read:
751 31A-4-107.5. Penalty for failure of a regulated health insurance entity to fulfill
752 duties related to state claims for Medicaid payment or recovery.
753 (1) For purposes of this section, "regulated health insurance entity" means a health
754 insurance entity, as defined in Section [ 26-19-2 ] 26-19-102 , that is subject to regulation by the
755 department.
756 (2) If a regulated health insurance entity fails to comply with the provisions of Section
757 [ 26-19-4.7 ] 26-19-301 :
758 (a) the commissioner may revoke or suspend, in whole or in part, a license, certificate
759 of authority, registration, or other authority that is granted by the commissioner to the regulated
760 health insurance entity; and
761 (b) the regulated health insurance entity is subject to the penalties and procedures
762 provided for in Section 31A-2-308 .
763 Section 31. Section 31A-22-610 is amended to read:
764 31A-22-610. Dependent coverage from moment of birth or adoption.
765 (1) As used in this section:
766 (a) "Child" means, in connection with any adoption, or placement for adoption of the
767 child, an individual who is younger than 18 years of age as of the date of the adoption or
768 placement for adoption.
769 (b) "Placement for adoption" means the assumption and retention by a person of a legal
770 obligation for total or partial support of a child in anticipation of the adoption of the child.
771 (2) (a) Except as provided in Subsection (5), if an accident and health insurance policy

772 provides coverage for any members of the policyholder's or certificate holder's family, the
773 policy shall provide that any health insurance benefits applicable to dependents of the insured
774 are applicable on the same basis to:
775 (i) a newly born child from the moment of birth; and
776 (ii) an adopted child:
777 (A) beginning from the moment of birth, if placement for adoption occurs within 30
778 days of the child's birth; or
779 (B) beginning from the date of placement, if placement for adoption occurs 30 days or
780 more after the child's birth.
781 (b) The coverage described in this Subsection (2):
782 (i) is not subject to any preexisting conditions; and
783 (ii) includes any injury or sickness, including the necessary care and treatment of
784 medically diagnosed:
785 (A) congenital defects;
786 (B) birth abnormalities; or
787 (C) prematurity.
788 (c) (i) Subject to Subsection (2)(c)(ii), a claim for services for a newly born child or an
789 adopted child may be denied until the child is enrolled.
790 (ii) Notwithstanding Subsection (2)(c)(i), an otherwise eligible claim denied under
791 Subsection (2)(c)(i) is eligible for payment and may be resubmitted or reprocessed once a child
792 is enrolled pursuant to Subsection (2)(d) or (e).
793 (d) If the payment of a specific premium is required to provide coverage for a child of a
794 policyholder or certificate holder, for there to be coverage for the child, the policyholder or
795 certificate holder shall enroll:
796 (i) a newly born child within 30 days after the date of birth of the child; or
797 (ii) an adopted child within 30 days after the day of placement of adoption.
798 (e) If the payment of a specific premium is not required to provide coverage for a child
799 of a policyholder or certificate holder, for the child to receive coverage the policyholder or
800 certificate holder shall enroll a newly born child or an adopted child no later than 30 days after
801 the first notification of denial of a claim for services for that child.
802 (3) (a) The coverage required by Subsection (2) as to children placed for the purpose of

803 adoption with a policyholder or certificate holder continues in the same manner as it would
804 with respect to a child of the policyholder or certificate holder unless:
805 (i) the placement is disrupted prior to legal adoption; and
806 (ii) the child is removed from placement.
807 (b) The coverage required by Subsection (2) ends if the child is removed from
808 placement prior to being legally adopted.
809 (4) The provisions of this section apply to employee welfare benefit plans as defined in
810 Section [ 26-19-2 ] 26-19-102 .
811 (5) If an accident and health insurance policy that is not subject to the special
812 enrollment rights described in 45 C.F.R. Sec. 146.117(b) provides coverage for one individual,
813 the insurer may choose to:
814 (a) provide coverage according to this section; or
815 (b) allow application, subject to the insurer's underwriting criteria for:
816 (i) a newborn;
817 (ii) an adopted child; or
818 (iii) a child placed for adoption.
819 Section 32. Section 31A-22-610.5 is amended to read:
820 31A-22-610.5. Dependent coverage.
821 (1) As used in this section, "child" has the same meaning as defined in Section
822 78-45-2 .
823 (2) (a) Any individual or group accident and health insurance policy or health
824 maintenance organization contract that provides coverage for a policyholder's or certificate
825 holder's dependent shall not terminate coverage of an unmarried dependent by reason of the
826 dependent's age before the dependent's 26th birthday and shall, upon application, provide
827 coverage for all unmarried dependents up to age 26.
828 (b) The cost of coverage for unmarried dependents 19 to 26 years of age shall be
829 included in the premium on the same basis as other dependent coverage.
830 (c) This section does not prohibit the employer from requiring the employee to pay all
831 or part of the cost of coverage for unmarried dependents.
832 (3) An individual or group accident and health insurance policy or health maintenance
833 organization contract shall reinstate dependent coverage, and for purposes of all exclusions and

834 limitations, shall treat the dependent as if the coverage had been in force since it was
835 terminated; if:
836 (a) the dependent has not reached the age of 26 by July 1, 1995;
837 (b) the dependent had coverage prior to July 1, 1994;
838 (c) prior to July 1, 1994, the dependent's coverage was terminated solely due to the age
839 of the dependent; and
840 (d) the policy has not been terminated since the dependent's coverage was terminated.
841 (4) (a) When a parent is required by a court or administrative order to provide health
842 insurance coverage for a child, an accident and health insurer may not deny enrollment of a
843 child under the accident and health insurance plan of the child's parent on the grounds the
844 child:
845 (i) was born out of wedlock and is entitled to coverage under Subsection (5);
846 (ii) was born out of wedlock and the custodial parent seeks enrollment for the child
847 under the custodial parent's policy;
848 (iii) is not claimed as a dependent on the parent's federal tax return; or
849 (iv) does not reside with the parent or in the insurer's service area.
850 (b) A child enrolled as required under Subsection (4)(a)(iv) is subject to the terms of
851 the accident and health insurance plan contract pertaining to services received outside of an
852 insurer's service area. A health maintenance organization must comply with Section
853 31A-8-502 .
854 (5) When a child has accident and health coverage through an insurer of a noncustodial
855 parent, and when requested by the noncustodial or custodial parent, the insurer shall:
856 (a) provide information to the custodial parent as necessary for the child to obtain
857 benefits through that coverage, but the insurer or employer, or the agents or employees of either
858 of them, are not civilly or criminally liable for providing information in compliance with this
859 Subsection (5)(a), whether the information is provided pursuant to a verbal or written request;
860 (b) permit the custodial parent or the service provider, with the custodial parent's
861 approval, to submit claims for covered services without the approval of the noncustodial
862 parent; and
863 (c) make payments on claims submitted in accordance with Subsection (5)(b) directly
864 to the custodial parent, the child who obtained benefits, the provider, or the state Medicaid

865 agency.
866 (6) When a parent is required by a court or administrative order to provide health
867 coverage for a child, and the parent is eligible for family health coverage, the insurer shall:
868 (a) permit the parent to enroll, under the family coverage, a child who is otherwise
869 eligible for the coverage without regard to an enrollment season restrictions;
870 (b) if the parent is enrolled but fails to make application to obtain coverage for the
871 child, enroll the child under family coverage upon application of the child's other parent, the
872 state agency administering the Medicaid program, or the state agency administering 42 U.S.C.
873 651 through 669, the child support enforcement program; and
874 (c) (i) when the child is covered by an individual policy, not disenroll or eliminate
875 coverage of the child unless the insurer is provided satisfactory written evidence that:
876 (A) the court or administrative order is no longer in effect; or
877 (B) the child is or will be enrolled in comparable accident and health coverage through
878 another insurer which will take effect not later than the effective date of disenrollment; or
879 (ii) when the child is covered by a group policy, not disenroll or eliminate coverage of
880 the child unless the employer is provided with satisfactory written evidence, which evidence is
881 also provided to the insurer, that Subsection (9)(c)(i), (ii) or (iii) has happened.
882 (7) An insurer may not impose requirements on a state agency that has been assigned
883 the rights of an individual eligible for medical assistance under Medicaid and covered for
884 accident and health benefits from the insurer that are different from requirements applicable to
885 an agent or assignee of any other individual so covered.
886 (8) Insurers may not reduce their coverage of pediatric vaccines below the benefit level
887 in effect on May 1, 1993.
888 (9) When a parent is required by a court or administrative order to provide health
889 coverage, which is available through an employer doing business in this state, the employer
890 shall:
891 (a) permit the parent to enroll under family coverage any child who is otherwise
892 eligible for coverage without regard to any enrollment season restrictions;
893 (b) if the parent is enrolled but fails to make application to obtain coverage of the child,
894 enroll the child under family coverage upon application by the child's other parent, by the state
895 agency administering the Medicaid program, or the state agency administering 42 U.S.C. 651

896 through 669, the child support enforcement program;
897 (c) not disenroll or eliminate coverage of the child unless the employer is provided
898 satisfactory written evidence that:
899 (i) the court order is no longer in effect;
900 (ii) the child is or will be enrolled in comparable coverage which will take effect no
901 later than the effective date of disenrollment; or
902 (iii) the employer has eliminated family health coverage for all of its employees; and
903 (d) withhold from the employee's compensation the employee's share, if any, of
904 premiums for health coverage and to pay this amount to the insurer.
905 (10) An order issued under Section 62A-11-326.1 may be considered a "qualified
906 medical support order" for the purpose of enrolling a dependent child in a group accident and
907 health insurance plan as defined in Section 609(a), Federal Employee Retirement Income
908 Security Act of 1974.
909 (11) This section does not affect any insurer's ability to require as a precondition of any
910 child being covered under any policy of insurance that:
911 (a) the parent continues to be eligible for coverage;
912 (b) the child shall be identified to the insurer with adequate information to comply with
913 this section; and
914 (c) the premium shall be paid when due.
915 (12) The provisions of this section apply to employee welfare benefit plans as defined
916 in Section [ 26-19-2 ] 26-19-102 .
917 (13) The commissioner shall adopt rules interpreting and implementing this section
918 with regard to out-of-area court ordered dependent coverage.
919 Section 33. Section 34A-2-417 is amended to read:
920 34A-2-417. Claims and benefits -- Time limits for filing -- Burden of proof.
921 (1) Except with respect to prosthetic devices or in a permanent total disability case, an
922 employee is entitled to be compensated for a medical expense if:
923 (a) the medical expense is:
924 (i) reasonable in amount; and
925 (ii) necessary to treat the industrial accident; and
926 (b) the employee submits or makes a reasonable attempt to submit the medical

927 expense:
928 (i) to the employee's employer or insurance carrier for payment; and
929 (ii) within one year from the later of:
930 (A) the day on which the medical expense is incurred; or
931 (B) the day on which the employee knows or in the exercise of reasonable diligence
932 should have known that the medical expense is related to the industrial accident.
933 (2) (a) A claim described in Subsection (2)(b) is barred, unless the employee:
934 (i) files an application for hearing with the Division of Adjudication no later than six
935 years from the date of the accident; and
936 (ii) by no later than 12 years from the date of the accident, is able to meet the
937 employee's burden of proving that the employee is due the compensation claimed under this
938 chapter.
939 (b) Subsection (2)(a) applies to a claim for compensation for:
940 (i) temporary total disability benefits;
941 (ii) temporary partial disability benefits;
942 (iii) permanent partial disability benefits; or
943 (iv) permanent total disability benefits.
944 (c) The commission may enter an order awarding or denying an employee's claim for
945 compensation under this chapter within a reasonable time period beyond 12 years from the date
946 of the accident, if:
947 (i) the employee complies with Subsection (2)(a); and
948 (ii) 12 years from the date of the accident:
949 (A) (I) the employee is fully cooperating in a commission approved reemployment
950 plan; and
951 (II) the results of that commission approved reemployment plan are not known; or
952 (B) the employee is actively adjudicating issues of compensability before the
953 commission.
954 (3) A claim for death benefits is barred unless an application for hearing is filed within
955 one year of the date of death of the employee.
956 (4) (a) (i) Subject to Subsections (2)(c) and (4)(b), after an employee files an
957 application for hearing within six years from the date of the accident, the Division of

958 Adjudication may enter an order to show cause why the employee's claim should not be
959 dismissed because the employee has failed to meet the employee's burden of proof to establish
960 an entitlement to compensation claimed in the application for hearing.
961 (ii) The order described in Subsection (4)(a)(i) may be entered on the motion of the:
962 (A) Division of Adjudication;
963 (B) employee's employer; or
964 (C) employer's insurance carrier.
965 (b) Under Subsection (4)(a), the Division of Adjudication may dismiss a claim:
966 (i) without prejudice; or
967 (ii) with prejudice only if:
968 (A) the Division of Adjudication adjudicates the merits of the employee's entitlement
969 to the compensation claimed in the application for hearing; or
970 (B) the employee fails to comply with Subsection (2)(a)(ii).
971 (c) If a claim is dismissed without prejudice under Subsection (4)(b), the employee is
972 subject to the time limits under Subsection (2)(a) to claim compensation under this chapter.
973 (5) A claim for compensation under this chapter is subject to a claim or lien for
974 recovery under Section [ 26-19-5 ] 26-19-401 .
975 Section 34. Section 34A-2-422 is amended to read:
976 34A-2-422. Compensation exempt from execution -- Transfer of payment rights.
977 (1) For purposes of this section:
978 (a) "Payment rights under workers' compensation" means the right to receive
979 compensation under this chapter or Chapter 3, Utah Occupational Disease Act, including the
980 payment of a workers' compensation claim, award, benefit, or settlement.
981 (b) (i) Subject to Subsection (1)(b)(ii), "transfer" means:
982 (A) a sale;
983 (B) an assignment;
984 (C) a pledge;
985 (D) an hypothecation; or
986 (E) other form of encumbrance or alienation for consideration.
987 (ii) "Transfer" does not include the creation or perfection of a security interest in a right
988 to receive a payment under a blanket security agreement entered into with an insured

989 depository institution, in the absence of any action to:
990 (A) redirect the payments to:
991 (I) the insured depository institution; or
992 (II) an agent or successor in interest to the insured depository institution; or
993 (B) otherwise enforce a blanket security interest against the payment rights.
994 (2) Compensation before payment:
995 (a) is exempt from:
996 (i) all claims of creditors; and
997 (ii) attachment or execution; and
998 (b) shall be paid only to employees or their dependents, except as provided in Sections
999 [ 26-19-5 ] 26-19-401 and 34A-2-417 .
1000 (3) (a) Subject to Subsection (3)(b), beginning April 30, 2007, a person may not:
1001 (i) transfer payment rights under workers' compensation; or
1002 (ii) accept or take any action to provide for a transfer of payment rights under workers'
1003 compensation.
1004 (b) A person may take an action prohibited under Subsection (3)(a) if the commission
1005 approves the transfer of payment rights under workers' compensation:
1006 (i) before the transfer of payment rights under workers' compensation takes effect; and
1007 (ii) upon a determination by the commission that:
1008 (A) the person transferring the payment rights under workers' compensation received
1009 before executing an agreement to transfer those payment rights:
1010 (I) adequate notice that the transaction involving the transfer of payment rights under
1011 workers' compensation involves the transfer of those payment rights; and
1012 (II) an explanation of the financial consequences of and alternatives to the transfer of
1013 payment rights under workers' compensation in sufficient detail that the person transferring the
1014 payment rights under workers' compensation made an informed decision to transfer those
1015 payment rights; and
1016 (B) the transfer of payment rights under workers' compensation is in the best interest of
1017 the person transferring the payment rights under workers' compensation taking into account the
1018 welfare and support of that person's dependents.
1019 (c) The approval by the commission of the transfer of a person's payment rights under

1020 workers' compensation is a full and final resolution of the person's payment rights under
1021 workers' compensation that are transferred:
1022 (i) if the commission approves the transfer of the payment rights under workers'
1023 compensation in accordance with Subsection (3)(b); and
1024 (ii) once the person no longer has a right to appeal the decision in accordance with this
1025 title.
1026 Section 35. Section 75-3-805 is amended to read:
1027 75-3-805. Classification of claims.
1028 (1) If the applicable assets of the estate are insufficient to pay all claims in full, the
1029 personal representative shall make payment in the following order:
1030 (a) reasonable funeral expenses;
1031 (b) costs and expenses of administration;
1032 (c) debts and taxes with preference under federal law;
1033 (d) reasonable and necessary medical and hospital expenses of the last illness of the
1034 decedent, including compensation of persons attending [him] the decedent, and medical
1035 assistance if Section [ 26-19-13.5 ] 26-19-405 applies;
1036 (e) debts and taxes with preference under other laws of this state; and
1037 (f) all other claims.
1038 (2) No preference shall be given in the payment of any claim over any other claim of
1039 the same class, and a claim due and payable shall not be entitled to a preference over claims not
1040 due.
1041 Section 36. Section 75-7-508 is amended to read:
1042 75-7-508. Notice to creditors.
1043 (1) A trustee for an inter vivos revocable trust, upon the death of the settlor, may
1044 publish a notice to creditors once a week for three successive weeks in a newspaper of general
1045 circulation in the county where the settlor resided at the time of death. The notice required by
1046 this Subsection (1) must:
1047 (a) provide the trustee's name and address; and
1048 (b) notify creditors:
1049 (i) of the deceased settlor; and
1050 (ii) to present their claims within three months after the date of the first publication of

1051 the notice or be forever barred from presenting the claim.
1052 (2) A trustee shall give written notice by mail or other delivery to any known creditor
1053 of the deceased settlor, notifying the creditor to present [his] the creditor's claim within 90 days
1054 from the published notice if given as provided in Subsection (1) or within 60 days from the
1055 mailing or other delivery of the notice, whichever is later, or be forever barred. Written notice
1056 shall be the notice described in Subsection (1) or a similar notice.
1057 (3) (a) If the deceased settlor received medical assistance, as defined in Section
1058 [ 26-19-2 ] 26-19-102 , at any time after the age of 55, the trustee for an inter vivos revocable
1059 trust, upon the death of the settlor, shall mail or deliver written notice to the Director of the
1060 Office of Recovery Services, on behalf of the Department of Health, to present any claim under
1061 Section [ 26-19-13.5 ] 26-19-405 within 60 days from the mailing or other delivery of notice,
1062 whichever is later, or be forever barred.
1063 (b) If the trustee does not mail notice to the director of the Office of Recovery Services
1064 on behalf of the department in accordance with Subsection (3)(a), the department shall have
1065 one year from the death of the settlor to present its claim.
1066 (4) The trustee shall not be liable to any creditor or to any successor of the deceased
1067 settlor for giving or failing to give notice under this section.
1068 Section 37. Section 75-7-511 is amended to read:
1069 75-7-511. Classification of claims.
1070 (1) If the applicable assets of the deceased settlor's estate or trust estate are insufficient
1071 to pay all claims in full, the trustee shall make payment in the following order:
1072 (a) reasonable funeral expenses;
1073 (b) costs and expenses of administration;
1074 (c) debts and taxes with preference under federal law;
1075 (d) reasonable and necessary medical and hospital expenses of the last illness of the
1076 deceased settlor, including compensation of persons attending him, and medical assistance if
1077 Section [ 26-19-13.5 ] 26-19-405 applies;
1078 (e) debts and taxes with preference under other laws of this state; and
1079 (f) all other claims.
1080 (2) No preference shall be given in the payment of any claim over any other claim of
1081 the same class, and a claim due and payable shall not be entitled to a preference over claims not

1082 due.




Legislative Review Note
as of 12-12-07 10:02 AM

Office of Legislative Research and General Counsel