Chief Sponsor: Kera Birkeland

Senate Sponsor: Ann Millner


8     General Description:
9          This bill addresses recovery of Medicaid funds from certain third-party obligors.
10     Highlighted Provisions:
11          This bill:
12          ▸     prohibits the Department of Health (department) from recovering Medicaid funds
13     from a third-party obligor that is required to pay for injuries to a child in foster care
14     if certain conditions are met;
15          ▸     provides that the department is responsible for repayment to the federal government
16     for the Medicaid funds the department is prohibited from recovering; and
17          ▸     makes technical and conforming changes.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          None
22     Utah Code Sections Affected:
23     AMENDS:
24          26-19-201, as renumbered and amended by Laws of Utah 2018, Chapter 443
25          26-19-401, as renumbered and amended by Laws of Utah 2018, Chapter 443

27     Be it enacted by the Legislature of the state of Utah:
28          Section 1. Section 26-19-201 is amended to read:
29          26-19-201. Assignment of rights to benefits.

30          (1) (a) [To] Except as provided in Subsection 26-19-401(1), to the extent that medical
31     assistance is actually provided to a recipient, all benefits for medical services or payments from
32     a [third-party] third-party otherwise payable to or on behalf of a recipient are assigned by
33     operation of law to the department if the department provides, or becomes obligated to provide,
34     medical assistance, regardless of who made application for the benefits on behalf of the
35     recipient.
36          (b) The assignment:
37          (i) authorizes the department to submit its claim to the [third-party] third-party and
38     authorizes payment of benefits directly to the department; and
39          (ii) is effective for all medical assistance.
40          (2) The department may recover the assigned benefits or payments in accordance with
41     Section 26-19-401 and as otherwise provided by law.
42          (3) (a) The assignment of benefits includes medical support and [third-party]
43     third-party payments ordered, decreed, or adjudged by any court of this state or any other state
44     or territory of the United States. [That]
45          (b) The assignment is not in lieu of, and does not supersede or alter any other court
46     order, decree, or judgment.
47          (4) When an assignment takes effect, the recipient is entitled to receive medical
48     assistance, and the benefits paid to the department are a reimbursement to the department.
49          Section 2. Section 26-19-401 is amended to read:
50          26-19-401. Recovery of medical assistance from third party -- Lien -- Notice --
51     Action -- Compromise or waiver -- Recipient's right to action protected.
52          (1) (a) [When] Except as provided in Subsection (1)(c), if the department provides or
53     becomes obligated to provide medical assistance to a recipient that a third-party is obligated to
54     pay for, the department may recover the medical assistance directly from [that] the third-party.
55          (b) (i) [Any] A claim [arising] under Subsection (1)(a) or Section 26-19-201 to recover
56     medical assistance provided to a recipient is a lien against any proceeds payable to or on behalf
57     of the recipient by [that] the third-party. [This]

58          (ii) The lien described in Subsection (1)(b)(i) has priority over all other claims to the
59     proceeds, except claims for attorney fees and costs authorized under Subsection
60     26-19-403(2)(c)(ii).
61          (c) (i) The department may not recover medical assistance under Subsection (1)(a) if:
62          (A) the third-party is obligated to pay the recipient for an injury to the recipient's child
63     that occurred while the child was in the physical custody of the child's foster parent;
64          (B) the child's injury is a physical or mental impairment that requires ongoing medical
65     attention, or limits activities of daily living, for at least one year;
66          (C) the third-party's payment to the recipient is placed in a trust, annuity, financial
67     account, or other financial instrument for the benefit of the child; and
68          (D) the recipient makes reasonable efforts to mitigate any other medical assistance
69     costs for the recipient to the state.
70          (ii) The department is responsible for any repayment to the federal government related
71     to the medical assistance the department is prohibited from recovering under Subsection
72     (1)(c)(i).
73          (2) (a) The department shall mail or deliver written notice of [its] the department's
74     claim or lien to the third-party at [its] the third-party's principal place of business or last-known
75     address.
76          (b) The notice shall include:
77          (i) the recipient's name;
78          (ii) the approximate date of illness or injury;
79          (iii) a general description of the type of illness or injury; and
80          (iv) if applicable, the general location where the injury is alleged to have occurred.
81          (3) The department may commence an action on [its] the department's claim or lien in
82     [its own] the department's name, but [that] the claim or lien is not enforceable as to a
83     third-party unless:
84          (a) the third-party receives written notice of the department's claim or lien before [it]
85     the third-party settles with the recipient; or

86          (b) the department has evidence that the third party had knowledge that the department
87     provided or was obligated to provide medical assistance.
88          (4) The department may:
89          (a) waive a claim or lien against a third party in whole or in part; or
90          (b) compromise, settle, or release a claim or lien.
91          (5) An action commenced under this section does not bar an action by a recipient or a
92     dependent of a recipient for loss or damage not included in the department's action.
93          (6) [The] Except as provided in Subsection (1)(c), the department's claim or lien on
94     proceeds under this section is not affected by the transfer of the proceeds to a trust, annuity,
95     financial account, or other financial instrument.