North Carolina § 108A-57 - Subrogation rights; withholding of information a misdemeanor.

§ 108A-57. Subrogation rights; withholding of information a misdemeanor.

As used in this section, the term "beneficiary" means (i) the beneficiary of medical assistance, including a minor beneficiary, (ii) the medical assistance beneficiary's parent, legal guardian, or personal representative, (iii) the medical assistance beneficiary's heirs, and (iv) the administrator or executor of the medical assistance beneficiary's estate. If the amount of the Medicaid claim does not exceed one-third of the medical assistance beneficiary's gross recovery, it is presumed that the gross recovery includes compensation for the full amount of the Medicaid claim. If the amount of the Medicaid claim exceeds one-third of the medical assistance beneficiary's gross recovery, it is presumed that one-third of the gross recovery represents compensation for the Medicaid claim A medical assistance beneficiary may dispute the presumptions established in subsection (a1) of this section by applying to the court in which the medical assistance beneficiary's claim against the third party is pending, or if there is none, then to a court of competent jurisdiction in this State, for a determination of the portion of the beneficiary's gross recovery that represents compensation for the Medicaid claim. An application under this subsection shall be filed with the court and served on the Department pursuant to the Rules of Civil Procedure no later than 30 days after the date that the settlement agreement is executed by all parties and, if required, approved by the court, or in cases in which judgment has been entered, no later than 30 days after the date of entry of judgment. The court shall hold an evidentiary hearing no sooner than 60 days after the date the action was filed. All of the following shall apply to the court's determination under this subsection: The medical assistance beneficiary has the burden of proving by clear and convincing evidence that the portion of the beneficiary's gross recovery that represents compensation for the Medicaid claim is less than the portion presumed under subsection (a1) of this section. The presumption arising under subsection (a1) of this section is not rebutted solely by the fact that the medical assistance beneficiary was not able to recover the full amount of all claims. If the beneficiary meets its burden of rebutting the presumption arising under subsection (a1) of this section, then the court shall determine the portion of the recovery that represents compensation for the Medicaid claim and shall order the beneficiary to pay the amount so determined to the Department in accordance with subsection (a5) of this section. In making this determination, the court may consider any factors that it deems just and reasonable. If the beneficiary fails to rebut the presumption arising under subsection (a1) of this section, then the court shall order the beneficiary to pay the amount presumed pursuant to subsection (a1) of this section to the Department in accordance with subsection (a5) of this section. Notwithstanding the presumption arising pursuant to subsection (a1) of this section, the medical assistance beneficiary and the Department may reach an agreement on the portion of the recovery that represents compensation for the Medicaid claim. If such an agreement is reached after an application has been filed pursuant to subsection (a2) of this section, a stipulation of dismissal of the application signed by both parties shall be filed with the court. Within 30 days of receipt of the proceeds of a settlement or judgment related to a claim described in subsection (a) of this section, the medical assistance beneficiary or any attorney retained by the beneficiary shall notify the Department of the receipt of the proceeds. The medical assistance beneficiary or any attorney retained by the beneficiary shall, out of the proceeds obtained by or on behalf of the beneficiary by settlement with, judgment against, or otherwise from a third party by reason of injury or death, distribute to the Department the amount due pursuant to this section as follows: If, upon the expiration of the time for filing an application pursuant subsection (a2) of this section, no application has been filed, then the amount presumed pursuant to subsection (a1) of this section, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the beneficiary's receipt of the proceeds, in the absence of an agreement pursuant to subsection (a3) of this section. If an application has been filed pursuant to subsection (a2) of this section and no agreement has been reached pursuant to subsection (a3) of this section, then the Department shall be paid as follows: If the beneficiary rebuts the presumption arising under subsection (a1) of this section, then the amount determined by the court pursuant to subsection (a2) of this section, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the entry of the court's order. If the beneficiary fails to rebut the presumption arising under subsection (a1) of this section, then the amount presumed pursuant to subsection (a1) of this section, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the entry of the court's order. If an agreement has been reached pursuant to subsection (a3) of this section, then the agreed amount, as prorated with the claims of all others having medical subrogation rights or medical liens against the amount received or recovered, shall be paid to the Department within 30 days of the execution of the agreement by the medical assistance beneficiary and the Department. The United States and the State of North Carolina shall be entitled to shares in each net recovery by the Department under this section. Their shares shall be promptly paid under this section and their proportionate parts of such sum shall be determined in accordance with the matching formulas in use during the period for which assistance was paid to the recipient. It is a Class 1 misdemeanor for any person seeking or having obtained assistance under this Part for himself or another to willfully fail to disclose to the county department of social services or its attorney and to the Department the identity of any person or organization against whom the recipient of assistance has a right of recovery, contractual or otherwise. This section applies to the administration of and claims payments under the NC Health Choice Program established under Part 8 of this Article. As required to ensure compliance with this section, the Department may apply to the court in which the medical assistance beneficiary's claim against the third party is pending, or if there is none, then to a court of competent jurisdiction in this State for enforcement of this section. Notwithstanding any other provisions of the law, to the extent of payments under this Part, the State shall be subrogated to all rights of recovery, contractual or otherwise, of a beneficiary against any person. Any claim brought by a medical assistance beneficiary against a third party shall include a claim for all medical assistance payments for health care items or services furnished to the medical assistance beneficiary as a result of the injury or action, hereinafter referred to as the "Medicaid claim." Any claim brought by a medical assistance beneficiary against a third party that does not state the Medicaid claim shall be deemed to include the Medicaid claim. If the beneficiary has claims against more than one third party related to the same injury, then any amount received in payment of the Medicaid claim related to that injury shall reduce the total balance of the Medicaid claim applicable to subsequent recoveries related to that injury. History (1973, c. 476, s. 138; c. 1031, s. 1; 1979, 2nd Sess., c. 1312, ss. 1, 2; 1981, c. 275, s. 1; 1987 (Reg. Sess., 1988), c. 1022; 1993, c. 539, s. 815; 1994, Ex. Sess., c. 24, s. 14(c); 1996, 2nd Ex. Sess., c. 18, s. 24.2(a); 2009-16, s. 4(c); 2013-274, s. 1; 2017-57, s. 11H.23; 2018-5, s. 11H.6(a); 2019-240, s. 11(a).) Editor's Note. - Session Laws 2009-16, s. 4(a), (b) provides: "Over-the-Counter Medications. - Coverage of over-the-counter medication authorized under G.S. 108A-70.21(d) for the NC Health Choice Program shall become effective on the later of July 1, 2010, or the date upon which the Department of Health and Human Services assumes full responsibility for administration and processing of claims under the NC Health Choice Program. "Subrogation. - For the period authorized under subsection (a) of this section, the right of subrogation under G.S. 108A-57 applies to the State Health Plan for payments made by the Plan under the NC Health Choice Program. This subsection expires on the later of July 1, 2010, or the date upon which the Department of Health and Human Services assumes full responsibility for administration, processing, and payment of claims under the NC Health Choice Program." Session Laws 2013-274, s. 2, made the revision of this section by Session Laws 2013-274, s. 1, applicable (i) to Medicaid claims that arise on or after July 18, 2013 and (ii) to Medicaid claims arising prior to July 18, 2013 for which the Department has not been paid in full. For Medicaid claims that arose prior to July 18, 2013 for which the Department has not been paid in full, the medical assistance beneficiary shall have 90 days from July 18, 2013 within which to apply to the court pursuant to G.S. 108A-57(a2) . Session Laws 2017-57, s. 1.1, provides: "This act shall be known as the 'Current Operations Appropriations Act of 2017.'" Session Laws 2017-57, s. 39.6, is a severability clause. Session Laws 2018-5, s. 11H.6(a), effective retroactively to July 1, 2017, repealed Session Laws 2017-57, s. 11H.23, which had rewritten the section. The 2018 amendment restored this section to the version prior to the 2017 rewrite. Session Laws 2018-5, s. 11H.6(b), (c), provides: "(b) For Medicaid claims for which a settlement agreement was executed or a judgment was entered between the dates of October 1, 2017, and the date this section becomes law [July 1, 2018], the medical assistance beneficiary shall have 30 days from the date this section becomes law [July 1, 2018] within which to dispute the presumption established under G.S. 108A-57(a1) , as amended by subsection (a) of this section, by applying to the court pursuant to G.S. 108A-57(a2) , as amended by subsection (a) of this section, for a determination of the portion of the beneficiary's gross recovery that represented compensation for the Medicaid claim and, in cases where a distribution to the Department of Health and Human Services has been made, a determination of any erroneous distribution to the Department." "(c) If any medical assistance beneficiary or any attorney retained by a medical assistance beneficiary has reason to believe that a Medicaid claim for which a distribution was made to the Department of Health and Human Services between the dates of October 1, 2017, and the date this section becomes law [July 1, 2018] resulted in a distribution that is in excess of what is required under G.S. 108A-57 , as amended by subsection (a) of this section, but does not dispute the presumption established under G.S. 108A-57(a1) , as amended by subsection (a) of this section, then the beneficiary shall have 30 days from the date this section becomes law [July 1, 2018] within which to apply to a court of competent jurisdiction for a determination of any erroneous distribution to the Department." Session Laws 2018-5, s. 1.1, provides: "This act shall be known as the 'Current Operations Appropriations Act of 2018.'" Session Laws 2018-5, s. 39.4, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2018-2019 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2018-2019 fiscal year." Session Laws 2018-5, s. 39.7, is a severability clause. Session Laws 2019-240, s. 11(b), made the amendment of subsections (a), (a2), (c), and (d) by Session Laws 2019-240, s. 11(a), effective November 6, 2019, and applicable to claims brought by medical assistance beneficiaries against third parties on or after that date. Effect of Amendments. - Session Laws 2009-16, s. 4(c), effective April 23, 2009, added subsection (c). Session Laws 2013-274, s. 1, effective July 18, 2013, rewrote the section. For applicability, see editor's note. Session Laws 2017-57, s. 11H.23, effective July 1, 2017, rewrote the section. Session Laws 2018-5, s. 11H.6(a) rewrote the section. See editor's note for effective date. Session Laws 2019-240, s. 11(a), rewrote subsection (a); in subsection (a1), inserted "in this State" in the first sentence and substituted "60" for "30" in the third sentence; deleted "made by the Department of Health and Human Services" following "payments" in subsection (c); and inserted "in this State" in subsection (d). For effective date and applicability, see editor's note. Legal Periodicals. - For comment, "Orders From On High: The Current Struggle over Medicaid Third Party Recovery Between North Carolina and the Supreme Court of the United States," see 30 Campbell L. Rev. 471 (2008).