Texas 2013 - 83rd Regular

Texas House Bill HB1869 Compare Versions

The same version is selected twice. Please select two different versions to compare.

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	By: Price, et al. (Senate Sponsor - Duncan) H.B. No. 1869
2	2	(In the Senate - Received from the House May 7, 2013;
3	3	May 8, 2013, read first time and referred to Committee on State
4	4	Affairs; May 10, 2013, reported favorably by the following vote:
5	5	Yeas 6, Nays 0; May 10, 2013, sent to printer.)
6	6
7	7
8	8	A BILL TO BE ENTITLED
9	9	AN ACT
10	10	relating to contractual subrogation and other recovery rights of
11	11	certain insurers and benefit plan issuers.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Title 6, Civil Practice and Remedies Code, is
14	14	amended by adding Chapter 140 to read as follows:
15	15	CHAPTER 140. CONTRACTUAL SUBROGATION RIGHTS OF PAYORS OF CERTAIN
16	16	BENEFITS
17	17	Sec. 140.001. DEFINITIONS. In this chapter:
18	18	(1) "Covered individual" means an individual entitled
19	19	to benefits described by Section 140.002.
20	20	(2) "Payor of benefits" or "payor" means an issuer of a
21	21	plan providing benefits described by Section 140.002 that:
22	22	(A) pays benefits to or on behalf of a covered
23	23	individual as a result of personal injuries to the covered
24	24	individual caused by the tortious conduct of a third party; and
25	25	(B) has a contractual right of subrogation
26	26	described by Section 140.004.
27	27	Sec. 140.002. APPLICABILITY OF CHAPTER. (a) This chapter
28	28	applies to an issuer of a health benefit plan that provides benefits
29	29	for medical or surgical expenses incurred as a result of a health
30	30	condition, accident, or sickness, a disability benefit plan, or an
31	31	employee welfare benefit plan, including an individual, group,
32	32	blanket, or franchise insurance policy or insurance agreement, a
33	33	group hospital service contract, or an individual or group evidence
34	34	of coverage or similar coverage document, including:
35	35	(1) an insurance company;
36	36	(2) a group hospital service corporation operating
37	37	under Chapter 842, Insurance Code;
38	38	(3) a fraternal benefit society operating under
39	39	Chapter 885, Insurance Code;
40	40	(4) a stipulated premium insurance company operating
41	41	under Chapter 884, Insurance Code;
42	42	(5) a reciprocal exchange operating under Chapter 942,
43	43	Insurance Code;
44	44	(6) a health maintenance organization operating under
45	45	Chapter 843, Insurance Code;
46	46	(7) a multiple employer welfare arrangement that holds
47	47	a certificate of authority under Chapter 846, Insurance Code; or
48	48	(8) an approved nonprofit health corporation that
49	49	holds a certificate of authority under Chapter 844, Insurance Code.
50	50	(b) Notwithstanding Section 172.014, Local Government Code,
51	51	or any other law, this chapter applies to a risk pool providing
52	52	health and accident coverage under Chapter 172, Local Government
53	53	Code.
54	54	(c) Notwithstanding any other law, this chapter applies to
55	55	an issuer of a plan or coverage under Chapter 1551, 1575, 1579, or
56	56	1601, Insurance Code.
57	57	(d) Notwithstanding any other law, this chapter applies to
58	58	any self-funded issuer of a plan that provides a benefit described
59	59	by Subsection (a).
60	60	(e) This chapter applies to any policy, evidence of
61	61	coverage, or contract under which a benefit described by Subsection
62	62	(a) is provided and:
63	63	(1) that is delivered, issued for delivery, or entered
64	64	into in this state; or
65	65	(2) under which an individual or group in this state is
66	66	entitled to benefits.
67	67	(f) This chapter does not apply to:
68	68	(1) a workers' compensation insurance policy or any
69	69	other source of medical benefits under Title 5, Labor Code;
70	70	(2) Medicare;
71	71	(3) the Medicaid program under Chapter 32, Human
72	72	Resources Code;
73	73	(4) a Medicaid managed care program operated under
74	74	Chapter 533, Government Code;
75	75	(5) the state child health plan or any other program
76	76	operated under Chapter 62 or 63, Health and Safety Code; or
77	77	(6) a self-funded plan that is subject to the Employee
78	78	Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et
79	79	seq.).
80	80	Sec. 140.003. CONFLICTS WITH OTHER LAW. In the event of a
81	81	conflict between this chapter and another law, including a rule of
82	82	procedure or evidence, this chapter controls to the extent of the
83	83	conflict.
84	84	Sec. 140.004. CONTRACTUAL SUBROGATION RIGHTS AUTHORIZED.
85	85	An issuer of a plan that provides benefits described by Section
86	86	140.002 under which the policy or plan issuer may be obligated to
87	87	make payments or provide medical or surgical benefits to or on
88	88	behalf of a covered individual as a result of a personal injury to
89	89	the individual caused by the tortious conduct of a third party may
90	90	contract to be subrogated to and have a right of reimbursement for
91	91	payments made or costs of benefits provided from the individual's
92	92	recovery for that injury, subject to this chapter.
93	93	Sec. 140.005. PAYORS' RECOVERY LIMITED. (a) If an injured
94	94	covered individual is entitled by law to seek a recovery from the
95	95	third-party tortfeasor for benefits paid or provided by a subrogee
96	96	as described by Section 140.004, then all payors are entitled to
97	97	recover as provided by Subsection (b) or (c).
98	98	(b) This subsection applies when a covered individual is not
99	99	represented by an attorney in obtaining a recovery. All payors'
100	100	share under Subsection (a) of a covered individual's recovery is an
101	101	amount that is equal to the lesser of:
102	102	(1) one-half of the covered individual's gross
103	103	recovery; or
104	104	(2) the total cost of benefits paid, provided, or
105	105	assumed by the payor as a direct result of the tortious conduct of
106	106	the third party.
107	107	(c) This subsection applies when a covered individual is
108	108	represented by an attorney in obtaining a recovery. All payors'
109	109	share under Subsection (a) of a covered individual's recovery is an
110	110	amount that is equal to the lesser of:
111	111	(1) one-half of the covered individual's gross
112	112	recovery less attorney's fees and procurement costs as provided by
113	113	Section 140.007; or
114	114	(2) the total cost of benefits paid, provided, or
115	115	assumed by the payor as a direct result of the tortious conduct of
116	116	the third party less attorney's fees and procurement costs as
117	117	provided by Section 140.007.
118	118	(d) A common law doctrine that requires an injured party to
119	119	be made whole before a subrogee makes a recovery does not apply to
120	120	the recovery of a payor under this section.
121	121	Sec. 140.006. ATTORNEY'S FEES IN DECLARATORY JUDGMENT
122	122	ACTION. Notwithstanding Section 37.009 or any other law, if a
123	123	declaratory judgment action is brought under this chapter, the
124	124	court may not award costs or attorney's fees to any party in the
125	125	action.
126	126	Sec. 140.007. ATTORNEY'S FEES IN RECOVERY ACTION. (a)
127	127	Except as provided by Subsection (c), a payor of benefits whose
128	128	interest is not actively represented by an attorney in an action to
129	129	recover for a personal injury to a covered individual shall pay to
130	130	an attorney representing the covered individual a fee in an amount
131	131	determined under an agreement entered into between the attorney and
132	132	the payor plus a pro rata share of expenses incurred in connection
133	133	with the recovery.
134	134	(b) Except as provided by Subsection (c), in the absence of
135	135	an agreement described by Subsection (a), the court shall award to
136	136	the attorney, payable out of the payor's share of the total gross
137	137	recovery, a reasonable fee for recovery of the payor's share, not to
138	138	exceed one-third of the payor's recovery.
139	139	(c) If an attorney representing the payor's interest
140	140	actively participates in obtaining a recovery, the court shall
141	141	award and apportion between the covered individual's and the
142	142	payor's attorneys a fee payable out of the payor's subrogation
143	143	recovery. In apportioning the award, the court shall consider the
144	144	benefit accruing to the payor as a result of each attorney's
145	145	service. The total attorney's fees may not exceed one-third of the
146	146	payor's recovery.
147	147	Sec. 140.008. FIRST-PARTY RECOVERY. (a) Except as provided
148	148	by Subsection (b), a payor of benefits may not pursue a recovery
149	149	against a covered individual's first-party recovery.
150	150	(b) A payor of benefits may pursue recovery against
151	151	uninsured/underinsured motorist coverage or medical payments
152	152	coverage only if the covered individual or the covered individual's
153	153	immediate family did not pay the premiums for the coverage.
154	154	Sec. 140.009. CONSTRUCTION OF CHAPTER. This chapter does
155	155	not create a cause of action. Nothing in this chapter shall be
156	156	construed to prevent a payor of benefits from waiving, negotiating,
157	157	or not pursuing any claim or recovery described by Section 140.004
158	158	or 140.005.
159	159	SECTION 2. Section 172.015, Local Government Code, is
160	160	repealed.
161	161	SECTION 3. It is the intent of the legislature that if any
162	162	provision, section, subsection, sentence, clause, phrase, or word
163	163	of this Act or the application thereof to any person or circumstance
164	164	is found to be unconstitutional, the provision, section,
165	165	subsection, sentence, clause, phrase, or word is hereby declared to
166	166	be severable and the balance of this Act remains effective
167	167	notwithstanding such unconstitutionality. Moreover, the
168	168	legislature declares that it would have passed this Act, and each
169	169	provision, section, subsection, sentence, clause, phrase, or word
170	170	thereof, irrespective of the fact that any provision, section,
171	171	subsection, sentence, clause, phrase, or word, or any of their
172	172	applications, were to be declared unconstitutional.
173	173	SECTION 4. The change in law made by this Act applies only
174	174	to a contractual right of subrogation in a cause of action that
175	175	accrues on or after the effective date of this Act to assert a
176	176	contractual right of subrogation or recovery described by Section
177	177	140.004, Civil Practice and Remedies Code, as added by this Act.
178	178	SECTION 5. This Act takes effect January 1, 2014.
179	179	* * * * *