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Minnesota Legislature

Office of the Revisor of Statutes

256B.37 PRIVATE INSURANCE POLICIES, CAUSES OF ACTION.
    Subdivision 1. Subrogation. Upon furnishing medical assistance to any person who has
private accident or health care coverage, or receives or has a right to receive health or medical
care from any type of organization or entity, or has a cause of action arising out of an occurrence
that necessitated the payment of medical assistance, the state agency or the state agency's agent
shall be subrogated, to the extent of the cost of medical care furnished, to any rights the person
may have under the terms of the coverage, or against the organization or entity providing or liable
to provide health or medical care, or under the cause of action.
The right of subrogation created in this section includes all portions of the cause of action,
notwithstanding any settlement allocation or apportionment that purports to dispose of portions of
the cause of action not subject to subrogation.
    Subd. 2. Civil action for recovery. To recover under this section, the attorney general may
institute or join a civil action to enforce the subrogation rights of the commissioner established
under this section.
Any prepaid health plan providing services under sections 256B.69, 256D.03, subdivision
4
, paragraph (c), and 256L.12; children's mental health collaboratives under section 245.493;
demonstration projects for persons with disabilities under section 256B.77; nursing homes under
the alternative payment demonstration project under section 256B.434; or the county-based
purchasing entity providing services under section 256B.692 may retain legal representation to
enforce the subrogation rights created under this section or, if no action has been brought, may
initiate and prosecute an independent action on their behalf against a person, firm, or corporation
that may be liable to the person to whom the care or payment was furnished.
    Subd. 3. Notice. The state agency must be given notice of monetary claims against a person,
firm, or corporation that may be liable in damages, or otherwise obligated to pay part or all of the
cost of medical care when the state agency has paid or become liable for the cost of care. Notice
must be given as follows:
(a) Applicants for medical assistance shall notify the state or local agency of any possible
claims when they submit the application. Recipients of medical assistance shall notify the state or
local agency of any possible claims when those claims arise.
(b) A person providing medical care services to a recipient of medical assistance shall
notify the state agency when the person has reason to believe that a third party may be liable for
payment of the cost of medical care.
(c) A person who is party to a claim upon which the state agency may be entitled to
subrogation under this section shall notify the state agency of its potential subrogation claim
before filing a claim, commencing an action, or negotiating a settlement. A person who is a party
to a claim includes the plaintiff, the defendants, and any other party to the cause of action.
Notice given to the local agency is not sufficient to meet the requirements of paragraphs
(b) and (c).
    Subd. 4. Recovery. Upon any judgment, award, or settlement of a cause of action, or any part
of it, upon which the state agency has a subrogation right, including compensation for liquidated,
unliquidated, or other damages, reasonable costs of collection, including attorney fees, must be
deducted first. The full amount of medical assistance paid to or on behalf of the person as a
result of the injury must be deducted next and paid to the state agency. The rest must be paid to
the medical assistance recipient or other plaintiff. The plaintiff, however, must receive at least
one-third of the net recovery after attorney fees and collection costs.
    Subd. 5. Private benefits to be used first. Private accident and health care coverage
including Medicare for medical services is primary coverage and must be exhausted before
medical assistance is paid for medical services including home health care, personal care assistant
services, hospice, or services covered under a Centers for Medicare and Medicaid Services
waiver. When a person who is otherwise eligible for medical assistance has private accident or
health care coverage, including Medicare or a prepaid health plan, the private health care benefits
available to the person must be used first and to the fullest extent.
    Subd. 5a. Supplemental payment by medical assistance. Medical assistance payment will
not be made when either covered charges are paid in full by a third party or the provider has an
agreement to accept payment for less than charges as payment in full. Payment for patients that
are simultaneously covered by medical assistance and a liable third party other than Medicare will
be determined as the lesser of clauses (1) to (3):
(1) the patient liability according to the provider/insurer agreement;
(2) covered charges minus the third party payment amount; or
(3) the medical assistance rate minus the third party payment amount.
A negative difference will not be implemented.
All providers must reduce their submitted charge to medical assistance programs to reflect
all discount amounts applied to the charge by any provider/insurer agreement or contract. The net
submitted charge may not be greater than the patient liability for the service.
    Subd. 6. Parent's or obligee's health plan. When a parent or a person with an obligation
of support has enrolled in a prepaid health care plan under section 518A.41, subdivision 1, the
commissioner of human services shall limit the recipient of medical assistance to the benefits
payable under that prepaid health care plan to the extent that services available under medical
assistance are also available under the prepaid health care plan.
History: 1975 c 247 s 7; 1987 c 370 art 2 s 9-14; 1987 c 403 art 3 s 26; 1Sp1993 c 1 art 5 s
87-89; 1996 c 451 art 2 s 32; 1997 c 217 art 2 s 8; 1999 c 245 art 4 s 66,68; 2002 c 277 s 24,32;
2004 c 228 art 1 s 75; 2005 c 164 s 29; 1Sp2005 c 7 s 28; 2006 c 280 s 46