Massachusetts House Bill H4362

Massachusetts 2023-2024 Regular Session

• Introduced: 2/12/24
• Refer: 2/12/24

Caption

Concerning equitable allocation of recovery proceeds for subrogation claims

Impact

This bill significantly impacts the way subrogation claims are handled in Massachusetts. By introducing a cap on how much an insurer can claim against the recovery amount, it ensures that HMOs and insurers can only recoup a portion of their expenses relative to the total damages suffered by the injured person. This change aims to protect injured individuals from having to surrender excessive portions of their settlements to insurers, thereby offering greater financial relief post-injury.

Summary

House Bill 4362 seeks to amend the Massachusetts General Laws concerning equitable allocation of recovery proceeds for subrogation claims, particularly addressing how benefits provided by health maintenance organizations (HMOs) and insurers are allocated when an injured party receives a settlement or judgment from a third party. The bill establishes a framework whereby any attorney's fees and costs incurred during the enforcement of liability and collection of judgments or settlements are to be shared between the injured person and the health insurer, proportional to what each party receives from those proceeds.

Contention

Notably, there may be contention surrounding this bill, particularly from insurance companies that may view the restrictions on recovery amounts as a potential loss of revenue. Opponents of the bill may argue that it could lead to increased costs for healthcare providers and insurers, potentially influencing the overall cost of insurance premiums. Supporters, however, advocate for more equitable treatment of injured individuals and argue that the bill addresses longstanding inequities in the current system where insurers often retained disproportionate claims from third-party recoveries.