53-2-612. Lien of department or county upon third-party recoveries. (1) Upon notice by the department, a county, or the recipient to a third party or his insurer as provided in subsection (5)(b), the department or county has a lien upon all money paid by a third party or his insurer in satisfaction of a judgment or settlement arising from a recipient's claim for damages or compensation for personal injury, disease, illness, or disability to the extent that the department or county has paid medical assistance on behalf of the recipient for the same personal injury, disease, illness, or disability.
     (2) The department or county may, in the name of the recipient on whose behalf medical assistance has been paid by the department or county, commence and prosecute to final conclusion any action which may be necessary to recover from a third party or his insurer compensation or damages for medical assistance paid by the department or county on behalf of the recipient. This section does not affect the right of the recipient to initiate and prosecute to final conclusion an action for damages or compensation in his own name in accordance with the provisions of this section.
     (3) (a) The lien:
     (i) applies to all money paid by a third party or his insurer regardless of whether the recovery is allocated by the parties or a court to any particular type or element of damages; and
     (ii) is subordinate to the lien of an attorney under 37-61-420.
     (b) Unless specifically provided by law, the recipient's right to recover damages or compensation from a third party or his insurer may not be reduced or denied on the ground that the recipient's costs of medical treatment and medical-related services have been paid by the department or county under any public assistance program.
     (c) From the amount collected by the department, county, or recipient from legal proceedings or as a result of settlement, reasonable attorney fees and costs must be first deducted and paid. Unless the department or county and the recipient agree to a different settlement, the amount previously paid as medical assistance by the department or county, less a pro rata share of attorney fees and costs, must be deducted next and paid to the department or county. The remainder, if any, must be paid to the recipient.
     (d) In all cases of payment to the department or county out of an amount collected from a third party or insurer on a recipient's claim, the amount of the lien must be reduced by a pro rata share of attorney fees and costs as provided in subsection (3)(c), but the department or county may not be required to participate in payment of attorney fees and costs unless the recipient's claim results in recovery out of which the department or county receives full or partial payment of its lien.
     (4) (a) A recipient of medical assistance or his legal representative shall notify the department or county by certified letter within 30 days if the recipient or his legal representative asserts a claim against a third party or his insurer for damages or compensation for a personal injury, disease, illness, or disability for which the department or county paid medical assistance in whole or in part or for which the recipient has applied for medical assistance. The notice must be mailed to the director of the department or the director of the county department that paid medical assistance. At the same time, a copy must be sent by certified mail to the third party or his insurer.
     (b) The notice must contain the following information:
     (i) the name and address of the recipient and his legal representative, if any;
     (ii) the name and address of the third party alleged to be liable to the recipient;
     (iii) the name and address of any known insurer of the third party; and
     (iv) the judicial district and docket number of any action filed.
     (c) A recipient or his legal representative who has received actual notice that the department or county has paid medical assistance is liable to the department or county for the amount it is entitled to receive under this section if:
     (i) the recipient or his legal representative fails to timely notify the department or county or fails to mail a copy of the notice to the third party or his insurer; and
     (ii) a third party or his insurer that did not receive notice from the department or county as provided for in subsection (5)(b) pays the recipient or his legal representative without satisfying any lien of the department or county.
     (5) (a) If a third party or his insurer that has received notice of the department's or county's lien as provided for in subsection (5)(b) makes payment in whole or in part of the recipient's claim without first satisfying the lien of the department or county, the third party or his insurer is liable to the department or county for the amount the department or county is entitled to receive under this section.
     (b) For the purposes of subsection (5)(a), a third party or his insurer has been given notice if:
     (i) the department or county mails, by certified mail, to the third party or his insurer:
     (A) a statement of the medical assistance paid or which may be paid by the department or county on behalf of the recipient; and
     (B) a claim for reimbursement;
     (ii) the recipient or his legal representative mails, by certified mail, to the third party or his insurer:
     (A) a copy of the notice required by subsection (4)(a); or
     (B) a statement stating that the recipient has applied for or has received medical assistance from the department or county in connection with the same claim; or
     (iii) the recipient or his legal representative has commenced an action against the third party or his insurer for damages or compensation for personal injury, disease, illness, or disability for which the department or county has paid or may pay medical assistance, in whole or in part, and the department or county files in the court in which the action is pending a notice of lien stating that a lien is claimed for medical assistance on any money paid in satisfaction of any judgment in or settlement of the action and that:
     (A) medical assistance in a stated amount has been paid by the department or county on behalf of the recipient; or
     (B) medical assistance may be paid on behalf of the recipient.
     (6) As used in this section, the following definitions apply:
     (a) "County" means a county department of welfare in a county that has not transferred its public assistance responsibilities to the state under the provisions of Title 53, chapter 2, part 8.
     (b) "Legal representative" means an attorney having or exercising authority on behalf of a recipient with respect to a claim or action to recover damages or compensation from a third party or his insurer.
     (c) "Recipient" means a person on whose behalf the department or a county has paid or may pay medical assistance for the cost of medical treatment and medical-related services for personal injury, disease, illness, or disability. If the context allows, the term includes a recipient's legal representative.
     (d) "Third party" means an individual, institution, corporation, or public or private agency that is or may be liable to pay all or part of the cost of medical treatment and medical-related services for personal injury, disease, illness, or disability of a recipient of medical assistance from the department or a county and includes but is not limited to insurers, health service organizations, and parties liable or who may be liable in tort.

     History: En. 71-241.1 by Sec. 1, Ch. 379, L. 1977; R.C.M. 1947, 71-241.1; amd. Sec. 1, Ch. 535, L. 1985; amd. Sec. 1, Ch. 482, L. 1989.