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Public Law
123rd Legislature
First Regular Session
Chapter 381
H.P. 1091 - L.D. 1566
An Act To Allow the State Timely Opportunity To Participate in Settlement Negotiations for MaineCare Benefits
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 22 MRSA §14, sub-§1,  as amended by PL 2003, c. 20, Pt. K, §2, is further amended to read:
 
1. Recovery procedures.   When benefits are provided or will be provided to a member under the MaineCare program administered by the department pursuant to the United States Social Security Act, Title XIX, including any prescription drug programs administered under the auspices of MaineCare, referred to collectively in this section as MaineCare, for the medical costs of injury, disease, disability or similar occurrence for which a 3rd party is, or may be, liable, the commissioner may recover from that party the cost of the benefits provided. This right of recovery is separate and independent from any rights or causes of action belonging to a member under the MaineCare program. For MaineCare recipients who participated in the MaineCare managed care program, “cost” means the total value of coverable medical services provided measured by the amount that MaineCare would have paid to providers directly for such services, were it not for the managed care system. The MaineCare program is the payor of last resort and shall provide medical coverage only when there are no other available resources. The Attorney General, or counsel appointed by the Attorney General, may, to enforce this right, institute and prosecute legal proceedings directly against the 3rd party in the appropriate court in the name of the commissioner.
 
In addition to the right of recovery set forth in this subsection, the commissioner must also be subrogated, to the extent of any benefits provided under the MaineCare program, to any cause of action or claim that a member has against a 3rd party who is or may be liable for medical costs incurred by or on behalf of the member. The Attorney General, or counsel appointed by the Attorney General, to enforce this right may institute and prosecute legal proceedings in the name of the injured person, member, guardian, personal representative, estate or survivor. If necessary to enforce the commissioner’s right of recovery, the Attorney General, or counsel appointed by the Attorney General, may institute legal proceedings against any member, including the agent, representative or attorney of that member, who has received a settlement or award from a 3rd party.
 
The commissioner’s right to recover the cost of benefits provided constitutes a statutory lien on the proceeds of an award or settlement from a 3rd party if recovery for MaineCare costs was or could have been included in the recipient’s claim for damages from the 3rd party to the extent of the recovery for medical expenses. The commissioner is entitled to recover the cost of the benefits actually paid out when the commissioner has determined that collection will be cost-effective to the extent that there are proceeds available for such recovery after the deduction of reasonable attorney’s fees and litigation costs from the gross award or settlement. In determining whether collection will be cost-effective, the commissioner shall consider all factors that diminish potential recovery by the department, including but not limited to questions of liability and comparative negligence or other legal defenses, exigencies of trial that reduce a settlement or award in order to resolve the recipient’s claim and limits on the amount of applicable insurance coverage that reduce the claim to the amount recoverable by the recipient. The department’s statutory lien may not be reduced to reflect an assessment of a pro rata share of the recipient’s attorney’s fees or litigation costs. The commissioner may, at the commissioner’s discretion, compromise, or otherwise settle and execute a release of, any claim or waive any claim, in whole or in part, if the commissioner determines the collection will not be cost-effective or that the best possible outcome requires compromise, release or settlement.
Sec. 2. 22 MRSA §14, sub-§2-D,  as amended by PL 2003, c. 20, Pt. K, §2, is further amended to read:
 
2-D. Notification of claim.   A recipient under the MaineCare program, or any agent, representative or attorney representing a recipient under the MaineCare program, who makes a claim to recover the medical cost of injury, disease, disability or similar occurrence for which the party received medical benefits under the MaineCare program shall advisenotify the department in writing withprior to settlement negotiations and provide information as required by the department of the existence of the claim. If the notice is not given and the department’s ability to recover for benefits paid is compromised, the department may institute legal proceedings against a recipient, including the agent, representative or attorney of that recipient, who has received a settlement or award from a 3rd party. The department may accept a letter of MaineCare claim protection in lieu of this section.
Sec. 3. 22 MRSA §14, sub-§2-E,  as amended by PL 2003, c. 20, Pt. K, §2, is further amended to read:
 
2-E. Notification of pleading.   In anyan action to recover the medical cost of injury, disease, disability or similar occurrence for which the party received medical benefits under the MaineCare program, the party bringing the action shall notify the department of that action at least 10 days prior to filing the pleadings. The notification must provide timely opportunity for the department, at its discretion, to intervene in all actions as an interested party. If adequate opportunity to intervene is not given and the department’s ability to recover for benefits paid is compromised, the department may institute legal proceedings against a recipient, including the agent, representative or attorney of that recipient, who has received a settlement or award from a 3rd party. The department may accept a letter of MaineCare claim protection in lieu of intervention. Department records indicating medical benefits paid by the department on behalf of the recipient are prima facie evidence of the medical expenses incurred by the recipient for the related medical services.
Sec. 4. 22 MRSA §14, sub-§2-F,  as amended by PL 2003, c. 20, Pt. K, §2, is further amended to read:
 
2-F. Disbursement.   Except as otherwise provided in this subsection, a disbursement of any award, judgment or settlement may not be made to a recipient without the recipient or the recipient’s attorney first paying to the department thethat amount of the statutory lien from the award, judgment or settlement that constitutes reimbursement for medical payments made or obtaining from the department a release of any obligation owed to it for medical benefits provided to the recipient. If a dispute arises between the recipient and the commissioner as to the settlement of any claim that the commissioner may have under this section, the 3rd party or the recipient’s attorney shall withhold from disbursement to the recipient an amount equal to the commissioner’s claim. Either party may apply to the Superior Court or the District Court in which an action based upon the recipient’s claim could have been commenced for an order to determine a reasonable amount in satisfaction of the statutory lien, consistent with federal law, considering whether an independent action by the commissioner would have been cost-effective. If either party applies under this subsection to the court for an order to determine a reasonable amount, the court may not order payment in satisfaction of such a lien for an amount less than 75% of the recovery, net of reasonable attorney’s fees and litigation costs, unless that amount exceeds the amount of the lien.
 
Effective September 20, 2007