Subrogation Laws in All 50 States - Interactive Map

[subscribe_to_unlock_form]

Click on your state for a brief summary of that state's laws affecting or impacting subrogation recoveries.

 

To receive a call back today to answer any of your questions, email us at [email protected]

[/subscribe_to_unlock_form]

Alaska Subrogation Laws

State Subrogation (no statute)

Generally favorable to subrogation, although there’s very little case law in the health insurance context. AK Sup Ct says auto ins can seek med expenses from insured.

Exceptions in auto insurance cases: An insurer cannot recover by means of subrogation against parties it also insures (Graham v. Rockman, 504 P.2d 1351, 1356 (Alaska 1972), but an insurer can recover in the form of reimbursement (Maynard v. State Farm Mut. Auto. Ins. Co., 902 P.2d 1328 (Alaska 1995)).  Two parties can agree that the settlement does not include the insurer’s subrogation claim, and then insurer cannot collect its claim from that settlement (O’Donnell v. Johnson, 209 P.3d 128, 133 (Alaska 2009)).  Insured can’t pursue subrogated medical expenses tort claims if the insurer has requested that the insured refrain from suing (Ruggles v. Grow, 984 P.2d 509 (Alaska 1999)).

Made Whole Doctrine

Very little case law, but seems to apply

  • The doctrine is acknowledged in McCarter v. Alaska Nat. ins. Co., 883 P.2d 986 (Alaska 1994), stating that most courts follow the principle that there can be no equitable subrogation recovery if the insured has not been fully compensated for loss. No mentions of contracting out. Alaska law appears to support the proposition that mere equitable subrogation will not be allowed unless an insured has been fully compensated for its loss. It does seem that the Made Whole Doctrine is more readily applied in equitable subrogation cases than is perhaps is in those involving contractual subrogation. Alaska court generally do not allow equitable subrogation until the insured has been fully compensated for its loss.
  • O’Donnell v. Johnson, 209 P. 3d 128 (Alaska 2009). The Alaska Supreme Court stated that the Made Whole Doctrine becomes involved in situations in which a defendant’s policy would be exhausted and the injured party would be left without being fully compensated for her own loss if her insurer collected the subrogation lien before she was herself compensated for her separate damages. Where two parties explicitly state that their settlement does not include the insurer’s subrogation claim, that insurer cannot collect its claim from the settlement.

Common Fund

Common fund applies. Sidney v. Allstate Ins. Co., 187 P.3d 443, 453–54 (Alaska 2008)

Ruggles v. Grow, 984 P.2d 509 (Alaska 1999) states that proceeds recovered must be paid to the insurer, less pro rata costs and fees incurred by the insured in prosecuting and collecting the claim.  The doctrine is completely compatible with Alaska’s Rule 82, which follows the English rule of fee compensation (Edwards v. Alaska Pulp Corp., 920 P.2d 751, 755 (Alaska 1996)). Cooper v. Argonaut Ins. Companies, 556 P.2d 525 (Alaska 1976) upholds the common-fund doctrine in workers comp cases.

Collateral source rules

In subrogation cases, the common law rule applies.

  • In non-subrogation cases, AS §09.17.070 applies and evidence is admissible
  • Loncar v. Gray, 28 P.3d 928 (Alaska 2001)
    1. involved evidence of Medicaid coverage
  • Weston v. AKHappytime, LLC, 445 P.3d 1015, 1028 (Alaska 2019)
    1. Case involving Medicare payments but applied to all “negotiated rates.”

Hospital Lien

  • 34.35.450-482 Establish a statutory lien for the hospital on any settlement for the reasonable value of services furnished before the date of judgment
  • 34.35.455 Treatment must have occurred within 20 days of the date of the injury.
  • 34.35.465 Outlines the specific form of notice (must be filed within 90 days of medical service given and mailed to interested parties)
  • 34.35.475 If the injured party’s claim is resolved, the hospital has only 180 days to bring its cause of action against the injured party or their insurer
  • 34.35.480. Costs and attorneys’ fees are recoverable for the enforcement of the lien.
  • Cases (kind of conflict in how to handle attorney fees):
    • Court has interpreted the statutes to incorporate a pro rata reduction of the lien for attorney fees as is equitable to avoid unjust enrichment (Alaska Native Tribal Health Consortium v. Settlement Funds on behalf of E.R., 84 P.3d 418 (Alaska 2004) (very helpful case!!). Requirement: 1) the patient/attorneys conferred a benefit upon the hospital; 2) the hospital appreciated the benefit; and 3) it would be inequitable for the hospital to accept and retain the benefit without paying the patient the value thereof
    • Hendricks-Pearce v. State Dept. of Corrections, 323 P.3d 30, 38-39 (Alaska 2014): when a hospital accrues a medical lien for care provided to an injured patient, the patient’s attorney fees must be deducted before the lien is paid from a settlement for those injuries.
    • Balance Billing – Alaska is Reasonable value state
      • Weston v. AKHappytime, LLC, 445 P.3d 1015, 1028 (Alaska 2019)
        • The amount to which a medical bill is lowered (“negotiated rate”) is part of the value of that collateral benefit and should not accrue to the defendant. Alaska now allows the plaintiff to introduce the full, undiscounted medical bills into evidence at trial. However, both the actual amounts paid and any amounts the provider wrote off are relevant to the medical services’ reasonable value.

Medicaid Statute

  • Alaska Stat. Ann. §47.05.070 establishes subrogation right
    • The Department will be subrogated to not more than the part of an insurance payment or other recovery by the recipient that is for medical expenses provided by the Department. Alaska Stat. Ann. § 47.05.070(b).
    • Amount Medicaid is entitled to will be reduced by a pro rata share of the attorney fees and litigation costs Alaska Stat. Ann. § 47.05.070(c).
  • Alaska statute §47.05.072: Duty of attorney for medical assistance recipient (notification burden on recipient and their attorney)
    • Attorney representing a Medicaid recipient (or the recipient themselves if acting on a pro se basis) shall submit to the attorney general’s office date of injury giving rise to the claim, copies of pleadings and other papers, identification of liable third parties, identification of relevant insurance policies, and description of fact. Must then notify the attorney general’s office within 30 days of any judgment, award, or settlement
  • Alaska Statute 47.05.075: Medical Assistance Lien
    • The department has a lien on any sum that may be due to the recipient of medical assistance from a third-party payor – the lien is in the amount of the medical assistance paid, together with reasonable attorney fees and litigation costs incurred in the enforcement of the lien
    • A lien against the sum due attaches and is effective upon filing with a recorder’s office – but the lien is not perfected and has no effect unless notice of the filing of the lien is served by the department upon the third-party payor
    • The amount of the lien will be reduced by a pro rata share of attorney fees and litigation costs

Cases

  • Ruggles v. Grow 984 P.2d 509 (1999): Auto insurer paid policy-holder’s med expenses, then when policy holder sought a 3rd party tort claim, auto insurer asked policy-holder not to seek damages already covered by insurance policy. Alaska Supreme Court said Plaintiff couldn’t include the med expenses to Plaintiff’s claim, and that didn’t violate collateral source rule because Defendant’s liability wasn’t reduced in whole, it was only reduced regarding the Plaintiff, who had already had its medical bills paid by the auto insurer. Defendant still had liability to the auto insurer. 984 P.2d 509 (1999).
  • O’Donnell v. Johnson 209 P.3d 128 (2009). The Alaska Supreme Court says that when a settlement agreement expressly states that a settlement doesn’t include money related to an insurer’s subrogation claim, the insurer cannot collect from the settlement because it is not a common fund.
  • Weston v. AKHappytime, LLC, 445 P.3d 1015, 1028 (Alaska 2019) The amount to which a medical bill is lowered (“negotiated rate”) is part of the value of that collateral benefit and should not accrue to the defendant. Alaska now allows the plaintiff to introduce the full, undiscounted medical bills into evidence at trial. However, both the actual amounts paid and any amounts the provider wrote off are relevant to the medical services’ reasonable value.

Statute of Limitations

2 Years Alaska Stat. § 09.10.070(a)

To receive a call back today to answer any of your questions, email us at [email protected]