Court Opinion

ID: 9795941
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:43:05.501295+00
Date Added: 2024-06-11T08:42:03.349939
License: Public Domain

DURHAM, Chief Justice,
dissenting:
¶ 18 I respectfully dissent. As I argued in my dissents in Houghton v. Department of Health, 2002 UT 101, ¶ 8, 57 P.3d 1067, and in Wallace v. Estate of Jackson, 972 P.2d 446, 449 (Utah 1998), Utah’s lien provisions are contrary to federal law. This ease highlights another dimension of that problem.
¶ 19 Federal Medicaid law places responsibility on the State to recover medical costs from liable third parties. A state plan must provide for obtaining information about potential third-party liability and assignment of rights from Medicaid recipients, 42 U.S.C. § 1396k(a)(l) (2003), and for obtaining information about potential third-party liability from other state agencies, id. § 1396k(a)(2). In accord with the statute, the applicable federal regulation specifically requires a state Medicaid agency to obtain, if possible, state motor vehicle accident report files. 42 C.F.R. § 433.138(d)(4)(ii) (1996). The agency commentary on this regulation points out that motor vehicle accident reports are likely to contain information about liability, insurers, and witnesses that Medicaid recipients themselves may not know. Medicaid Program; Identification of Third Party Liability Resources for Medical Assistance, 52 Fed. Reg. 5967 (Feb. 27, 1987). The state Medicaid agency must follow up on any relevant information within forty-five days “in order to identify legally liable third-party resources and incorporate such information into the eligibility case file and into its third-party data base and third-party recovery unit.” 42 C.F.R. § 433.138(g)(l)(I).
¶ 20 Here, the Medicaid recipient (Streight) gave the State the required information. We do not know whether the State fulfilled its additional obligation to seek information about the accident from the Utah Division of Motor Vehicles (DMV). In any case, the State did not act on any such information until Streight settled with the liable third party. Only then did it seek to recover Medicaid expenses by imposing a lien on Streight’s settlement proceeds. The State cites the requirement, in Utah Code section 26 — 19—7(l)(a), that the recipient notify it before filing or settling a claim against a third party “for recovery of medical costs.” Utah Code Ann. § 26-19-7(1)(a) (1998). However, the record is unclear as to whether Streight’s claim was for recovery of medical costs, or whether Streight sought other damages, such as compensation for pain and suffering, lost wages, etc. Since Streight had already assigned her right to recover medical costs to the State and did not seek permission from the State to recover such costs herself, it is logical to assume, in the absence of evidence to the contrary, that her independent claim against the third party did not seek to recover medical costs. (Since the accident rendered Streight unable to care for herself, a settlement amount of $110,000, exclusive of medical costs, does not appear in any way exorbitant.) In that ease, the State should not be able to impose a lien on any of the settlement proceeds, much less on the attorney fee portion, because the settlement amount did not reflect medical costs.
¶ 21 Even if Streight did seek to recover medical costs in violation of Utah Code section 26-19-7, that statute appears to conflict with federal requirements insofar as it is *695used by the State to bypass its own responsibility to recover from third parties. We do not know whether the State followed up on the information given it by Streight or on any additional information contained in the DMV accident report within the required forty-five-day period, or whether it gave any consideration to making an attempt to recover medical costs itself. By not taking action itself, the State may have waived its ability to recover medical costs directly from the insurer. Federal Medicaid law imposing recovery responsibility on the State should foreclose an interpretation of state law that allows the State to abrogate this responsibility by relying on Medicaid recipients to act, usually unwittingly, on the State’s behalf.