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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             23      relating to a surviving spouse or child, is no longer in effect;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


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