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SENATE FLOOR VERSION
April 11, 2023
ENGROSSED HOUSE
BILL NO. 1791 By: Osburn of the House
and
Rosino of the Senate
An Act relating to public health and safety; amending
63 O.S. 2021, Section 5051.1 , which relates to
recovery from tortfeasors of amounts paid for medical
expenses of injured and diseased persons; clarifying
the priority of medical costs over all other damages;
prioritizing certain liens; allowing negotiation on
certain liens; providing the method for determining
the amount to be recovered against a party t hat
received payment; providing the method for
determining the amount to be recovered against a
third-party payer; providing the method for
determining the amount to be recovered when a payment
is made by a payor that is less than the judgment or
settlement amount; providing the method for
determining the amount to be recovered when a payor's
payment equals or exceeds th e judgment or settlement
amount; providing the method for determini ng the
amount to be recovered when a payor incurs
procurement costs beca use of opposition to its
recovery; providing a recovery worksheet; providing
the method to determine the amount to be recovered
from a beneficiary; providing the m ethod to determine
the amount to be refunded; and providing an effective
date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLA HOMA:
SECTION 1. AMENDATORY 63 O.S. 2021, Sec tion 5051.1, is
amended to read as follows:
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Section 5051.1 A. 1. The payment of medical expenses by the
Oklahoma Health Care Authority for or on behalf of or the receipt of
medical assistance by a person who has been injured, passed away, or
who has suffered a disease as a result of the negligence or act of
another person creates a debt to the Authority, subject to recovery
by legal action pursuant to this section. Damages for medical cos ts
are considered a prio rity over all other damages and should shall be
paid by the tortfeasor prior to all other damages being allo cated or
paid.
2. The payment of medical expenses by the Authority for or on
behalf of a person who has been injured or who has suffe red a
disease, and either has a claim or may have a clai m against an
insurer, to the extent recoverable, creates a debt to the Authority
whether or not such person asserts or maintains a claim against an
insurer.:
a. such claim or possible claim cannot be assigned by the
person receiving medical car e to any provider, and
b. no provider may require assignment of subrogation
rights against any possible liable third party as a
condition for providing medical care.
B. The Authority shall provide notice to a ll recipients of
medical assistance at the time of applicat ion for such assistance of
their obligation to report any claim or action, and any judgment,
settlement or compromise arising from the claim or action, for
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injury or illness for which the Authority makes payments for me dical
assistance.
C. The recipient of medical assistance from the Authority for
an injury or disease w ho asserts a claim or maintains an action
against another on account of the injury or disease, or the
recipient's legal representative, shall notify the Authority of the
claim or action and of any judgment, settlement or compromise
arising from the claim o r action prior to the final judgment,
settlement or compromise.
D. If the injured or diseased person asserts or maintains a
claim against another person or tortfeasor on account of the inju ry
or disease, the Authority:
1. Shall have a lien upon payment o f the medical assistance to
the extent of the total amount so paid upon that part going or
belonging to the injured or diseased person of any recovery or sum
had or collected or to be collec ted by the injured or diseased
person up to the amount of the dama ges for the total medical
expenses, or by the heirs, personal representative or next of kin in
case of the death of the person, whether b y judgment or by
settlement or compromise. The lien authorized by this subsection
shall:
a. have priority over all oth er liens except any lien by
CMS/Medicare and be inferior only to a lien or claim
of the attorney or attorneys handling the claim on
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behalf of the injured or diseased person, the heirs or
personal representative,
b. not be applied or considered valid agains t any
temporary or permanent disability award of the
claimant due under the Workers' Compensation Act,
c. be applied and considered valid as against any insurer
adjudged responsible for medi cal expenses under the
Workers' Compensation Act, and
d. be applied and considered valid as to the entire
settlement, after the claim of the attorney or
attorneys for fees and costs, unless a more limited
allocation of damages to medical expenses is shown by
clear and convincing evidence;
2. A lien reduction pursuant to Section 994.2 of Title 12 of
the Oklahoma Statutes may be negotiated further by the Authority
provided that the injured person, the personal representative, or
attorney has made a g ood-faith effort to negotiate a reduction;
3. May take any other legal action necessary to recover the
amount so paid or to be paid to the injured or diseased person or to
the heirs, personal represent ative or next of kin in case of the
death of the person; and
3. 4. Shall have the right to file a written notice of its lien
in any action commenced by the injured or diseased person.
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E. The Authority, to secure and enforce the right of recovery
or reimbursement on behalf of the injured or diseased perso n, may
initiate and prosecute any action or proceeding against any other
person or tortfeasor who may be liable to the injured or diseased
person, if the injured or diseased person has not initiated any
legal proceedings against the other person or tortfea sor.
F. Any person or insurer that has been notified by the
Authority of a claim of lien authorized by this section and who,
directly or indirectly, pays to the recipient any money as a
settlement or compro mise of the recipient 's claim arising out of the
injury shall be liable to the Authority for the money value of the
medical assistance rendered by the Authority in an amount not in
excess of the amount to which the recipient was entitled to recover
from the tortfeasor or insurer because of the injury.
G. A Medicaid special needs trust for the purposes of
establishing or maint aining Medicaid eligibility shall not be
approved until such time as the Authority has been made whole and
paid in full for all paid medical claims which are associated with
the action.
H. A Medicaid recipient must notify the Authority prior to a
compromise or settlement against a third party in which the
Authority has provided or has become obligated to provide medical
assistance.
I. As used in this section:
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1. "Medical expenses" includes the cost of hospital, medical,
surgical and dental services, care and treatment, rehabilitation,
and prostheses and medical appliances, and nursing and funeral
services;
2. "Person" includes, in addition to an individual, the
guardian of an indiv idual, and the administrator or executor of the
estate of an individual, a nd a corporation; and
3. "Insurer" means any insurance company that administers
accident and health policies or plans or that admini sters any other
type insurance policy containing medical provisions, and any
nonprofit hospital service and indemnity and m edical service and
indemnity corporation, actually engaged in business in the state,
regardless of where the insurance contract is wr itten, or plan is
administered or where such corp oration is incorporated.
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 994.3 of Title 12, unless there
is created a duplication in numbering, reads as follow s:
A. Recovery against the party that received payment.
1. General rule. Any payor of money benefits with recovery or
reimbursement rights by contract or statute reduces its recovery to
take account of the cost of procuring the judgment or settlement
from a third party, as provided in this section, if:
a. procurement costs are incurred because the claim i s
disputed, and
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b. those costs are borne by the party against which the
payor seeks to recover.
2. Special rule. If a payor must file suit because the party
that received payment opposes the payor's recovery, the recovery
amount is as set forth in subsec tion E of this section.
B. Recovery against the third-party payer. If the payor seeks
recovery from the third-party payer, the recovery amount will be no
greater than the amount determined under subsection C, D or E of
this section.
C. Payments made by a payor that are less than the judgment o r
settlement amount. If a payor's payments are less than the judgment
or settlement amount, the recovery is computed as follows:
1. Determine the ratio of the procurement costs to the total
judgment or settlement payment;
2. Apply the ratio to the person or entity's payment. The
product is the payor's share of procurement costs; and
3. Subtract the payor's share of procurement cos ts from his or
her claimed payments. The remainder is the payor's recovery amount.
D. A payor's payments that equals or exceeds the judgment or
settlement amount. If payor's payments equal or exceed the judgment
or settlement amount, the recovery amount is the total judgment or
settlement payment minus the total procurement costs.
E. The payor incurs procurement costs because of opposition to
its recovery. If the payor must bring suit against the party that
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received payment becau se that party opposes t he recovery, the
recovery amount is the lower of the following:
1. The person or entity's payment; or
2. The total judgment or settlement amount, minus the party's
total procurement cost.
F. Recovery worksheet. The amount to be reco vered from the
beneficiary is the amount payor paid, less a proportionate share of
the costs of procuri ng the judgment or settlement. The amount to be
refunded is determined as follows:
If the payor's payment is less than the amount of judgment or
settlement:
1. Determine the ratio of the payments to the total amount of
the judgment or settlement ;
2. Apply this ratio to the costs of procuring the judgment or
settlement, including attorney fees; and
3. Subtract the payor's share of procurement costs from their
payments. The remainder is the amount of reimbursement to be
refunded to the payor seeking recovery of payments.
Step 1:
$_________________ / $_________________ = __________________
Payor's Payment Judgment/Settlement Ratio
Carry out 6 digits
Step 2:
__________________ X $_________________ = __________________
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Ratio from Step 1 Procurement Costs Payor's Share of
Carry out 6 digits Procurement Cost
Step 3:
$_________________ - $_________________ = __________________
Payor's Payment Payor's Share of Refund to Payor
Procurement Costs
G. If the payor's payments equal or exceed the amount of the
judgment or settlement, subtract the total procurement costs from
the judgment or settlement. The remainder is the amou nt of
reimbursement to be refunded to the payor. The beneficiary will not
be required to refund more than the liability insurance payment
minus the procurement costs.
$_________________ - $_________________ = $_________________
Judgment/Settlement Procurement Costs Refund
SECTION 3. This act shall become effective November 1, 2023.
COMMITTEE REPORT BY: C OMMITTEE ON JUDICIARY
April 11, 2023 - DO PASS