Attorney General: Audrey Rowe, Department of Income Maintenance, 1992-031 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

November 19, 1992

Audrey Rowe
Commissioner
Department of Income Maintenance
110 Bartholomew Avenue
Hartford, CT 06106

Dear Commissioner Rowe:

In your letter of June 5, 1992, you requested our opinion regarding the validity of certain legislation proposed by the Department Of Income Maintenance (DIM). That legislation would require any recipient, or any attorney representing such an individual, who initiates a legal action against a third party for recovery of medical expenses, to report the filing of that suit to the Department of Income Maintenance. We advise you that the statutory imposition of such a reporting requirement would comport with the objectives of existing state and federal Medicaid law and would be legally permissible.

Title XIX of the Social Security Act, 42 U.S.C. 1396 et seq., which governs the Medicaid program, establishes a cooperative federal and state cost-sharing system to provide medical services to needy individuals with limited incomes and resources. A state's participation in the program is optional; however, a state that chooses to engage in it must comply with all applicable federal Medicaid laws and regulations. Atkins v. Rivera, 477 U.S. 154, 156-57 (1986); Bethphage Lutheran Service, Inc. v. Weicker, 965 F.2d 1239, 1240 (2d Cir. 1992). Because Connecticut is a participant in the Medicaid program, it is necessary to consider whether the legislation DIM seeks to propose conforms to federal mandates as well as existing state laws.

Congress has made clear that "Medicaid is intended to be the payer of last resort, that is, other available resources must be used before Medicaid pays for the care of an individual enrolled in the Medicaid program." S. Rep. No. 146, 99th Cong., 2d Sess. 1, 312 reprinted in 1986 U.S. Code Cong. & Admin. News 42, 279. Because the federal and state governments share the costs of the Medicaid program, both entities have a strong interest in recouping, whenever possible, expenditures that have been made on behalf of any Medicaid beneficiary who has other source from which medical payments may be obtained. New York State Department Social Services v. Bowen, 846 F.2d 129 (2d Cir. 1988). To that end, federal law dictates that a participating state must "take reasonable measures to ascertain the legal liability of third parties (including health insurers) to pay for care and services available under the [Medicaid] plan...." 42 U.S.C. 1396a(25).

Federal law further decrees that a state must require an individual, as a condition of eligibility for Medicaid assistance:

(A) to assign the State any rights...to support (specified as support for the purpose of medical care by court or administrative order) and to payment for medical care from any third party; and

(B) to cooperate with the State.. in obtaining support and payments (described in subparagraph (A))...; and

(C) to cooperate with the State in identifying, and providing information to assist the State in pursuing any third party who may be able to pay for care and services available under the plan....1

42 U.S.C. 1396k(a)(1).

The federal regulations that implement Section 1396k(a) further define that statute's terms and elucidate its purpose. See 42 C.F.R. 433.135 - 433.148. The regulations provide that, as part of the "cooperation" to which a Medicaid recipient must agree, a state agency responsible for Medicaid administration may require an individual to:

(3) Provide information, or attest to lack of information, under penalty of perjury;

(4) Pay to the agency any support or medical care funds received that are covered by the assignment of rights; and

(5) Take any other reasonable steps to assist in securing medical support and payments, and in identifying and providing information to assist the State in pursuing any liable third party.

42 C.F.R. @433.147(b).

The regulations also define "third party" as "any individual, entity or program, that is or may be liable to pay all or part of the expenditures for medical assistance furnished under a State plan." 42 C.F.R. 433.136.

Taken together, the federal statutory and regulatory provisions cited above make clear that a state's Medicaid laws must require not only that a recipient assign to the state all rights to receive, from any liable source, payments for medical expenses, but also that the recipient facilitate in any reasonable manner the state's efforts to procure such payments.

Sections 17-82b2 and 17-134f3 of the Connecticut General Statutes, set forth in the notes below, satisfy the fundamental federal mandates regarding assignment and cooperation. As we have seen, however, federal law also grants a state permission o require a recipient to supply any specified information or take any explicit steps to facilitate the identification and pursuit of potentially liable third parties. 42. U.S.C.. 1396k(a)(1); 42 C.F.R. 433.147(b0. In our opinion, the statutory reporting obligation that you seek to impose is the kind of cooperative activity that falls squarely within the purview of the federal regulatory scheme. Your legislative proposal would merely require a Medicaid recipient, or his or her attorney, to inform the Department of Income Maintenance of certain facts; namely, that a potentially liable third party has been identified, and that a legal action to recover damages from that entity has been commenced. Such a requirement is entirely consistent with both state and federal law.

Having determined that the Department's legislative proposal is legally viable, we note that several other states already employ such legislation. The California Code, for example, requires that a Medicaid beneficiary who brings an action against a third person who may be liable for an injury to the beneficiary must give notice of the institution of legal proceedings an notice of any settlement to he state's Director of Health Services. that statute further specifies that "[a]ll such notices shall be given by the attorney retained to assert the beneficiary's claim, or by the injured party beneficiary...if no attorney is retained." Cal. Welf. & Inst. Code 14124.79. Similarly, Main's statutes provide that "[a] Medicaid...recipient, or any attorney representing a Medicaid...recipient," who makes a claim to recover expenses arising from a medical condition for which the individual received Medicaid benefits, "shall advise the...[state's Department of Human Services] in writing with information as required by the department of the existence of the claim." Me. Rev. Stat. Ann. Tit. 22, 14(2-D). See also Minn. Stat. 256B.27(3); Ala. Code 22-6-6(c); Cal. Welf. & Inst. Code 14124.73, 14124.876; Me. Rev. Stat. Ann. tit. 22 14(20E) (other statutes requiring a Medicaid recipient to give notice to the state of any claim, suit judgment; award or settlement between the recipient and a third party regarding payment of the recipient's medical bills).

The provisions of the statutes noted above show that state agencies administering Medicaid plans in several other jurisdictions already rely on reporting requirements, similar to that which the Department intends to propose, to enhance their efforts to reduce or recoup Medicaid expenditures. If the Department of Income Maintenance obtains the General Assembly's approval of its proposal, it, too, may procure through mandatory reporting salient information regarding third parties' liability for Medicaid recipients' medical expenses.

Very truly yours,

RICHARD BLUMENTHAL
ATTORNEY GENERAL

Heather J. Wilson
Assistant Attorney General

RB/RB/HJW/dsw


1 Subparagraph (C) of Section 1396k(a)(1) contains an exception to the cooperation requirement for an individual who "has good cause for refusing to cooperate..." Accordingly, cooperation is not required if the state agency administering the Medicaid program determines "that cooperation is against the best interests of the individual because it is anticipated that cooperation will result in reprisal against, and cause physical or emotional harm to, the individual...". 42 C.F.R. 433.147(c)(2).

2 Section 17-82b of the Connecticut General Statutes provides in pertinent part:

By such application, the applicant shall assign to the commissioner the right of support, present, past and future, due all persons seeking assistance.. Notice of such assignment shall be conspicuously placed on said application and shall be explained to the applicant at the time of application. All information required to be provided to the commissioner as a condition of such eligibility under federal law shall be so provided by the applicant ....

3 Section 17-134f(a) further requires:

The department of income maintenance shall be subrogated to any right of recovery or indemnification which an applicant or recipient of medical assistance has against an insurer for the cost of...medical services, not to exceed the amount expended by the department for such care and treatment of the applicant or recipient. An applicant or recipient...by the act of...receiving medical assistance, shall be deemed to have made a subrogation assignment and an assignment of claim for benefits to the department. The department shall inform an applicant of such assignments at the time of application. In addition, any entitlements from a contractual agreement with an applicant or recipient..., a state or federal program or a claim or action against any responsible third party for such medical services, not to exceed the amount expended by the department, shall be so assigned. Such entitlements shall be directly reimbursable to the department by third party payors....


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