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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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             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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             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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             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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             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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             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.





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