Subrogation Laws in All 50 States - Interactive Map

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

 

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Colorado Subrogation Laws

State Subrogation

Recognizes equitable and contractual subrogation – NO contracting around the statute

  • Codified under CRSA §10-1-135. Equitable rights designed to prevent windfall (Mid-Century Ins. Co. v. Travelers Indem. Co. of Illinois, 982 P.2d 310 (Colo. 1999))
  • Cap: CRSA §10-1-135(3)(b) states that the reimbursement or subrogation amount cannot exceed the amount actually paid by the payer of benefits or the amount equal to 80% of the usual and customary charge for the same services by health care providers that provide the services in the geographic region
  • CRSA §10-1-135(6)(a) states that an insurer cannot bring a direct action for subrogation or reimbursement against the liable third party unless the injured party has not pursued a claim by the date that is 60 prior to the date on which the statute of limitations applicable to the claim expires
  • CRSA §10-1-135(9): any language in an insurance policy that is contrary to any section in §10-1-135 is unenforceable
  • R.S. § 10-1-135(4)(a)(II) (2010). If the insured feels he is not made whole, he must notify the subrogated carrier within 60 days of receipt of the recovery. Notice must include: (1) the total amount of recovery; (2) the coverage limits applicable to any available policy or Plan; and (3) the amount of costs charged to the insured.
  • Direct subrogation and reimbursement allowed on polices issued or renewed before 1/1/09. DeHerrera v. American Family, 2009 WL 540789 (Colo. App. 2009). No direct subrogation action against third party for policies issued, delivered or renewed after 1/1/09. Possible reimbursement claim after 1/1/09 under C.R.S. 10-4-635(3)(a).

Made Whole Doctrine

YES, no contracting around

Under CRSA §10-1-135(3)(a)(I), reimbursement is permitted only if the injured party has first been fully compensated for all damages arising out of the claim. Any provision in a policy, contract, or benefit plan allowing or requiring reimbursement or subrogation in circumstances in which the injured party has not been fully compensated is void as against public policy.

Common Fund

YES

CRSA §10-1-135(3)(c): the amount recoverable shall be reduced by an amount equal to the payer of benefits’ proportionate share of the attorney fees and expenses incurred by or on behalf of the injured party, based on the ratio of the amount of attorney fees and expenses incurred to the amount of the recovery

Collateral Source Rule

CRSA §13-21-111.6 states that the collateral source rule applies in cases where insurance companies have paid benefits to the insured, as long as they were benefits paid as a result of a contract entered into by the insured

  • Scholle v. Delta Air Lines, Inc., 2019 WL 2219704 (Colo. App. 2019). In Scholle, the court held: The Collateral Source Rule barred admissibility of the medical expenses paid by the workers’ comp insurer.The plaintiff could present evidence of the higher medical expenses actually billed by his medical providers. At most, the defendant, by way of its settlement with the comp carrier, may receive a post-trial set-off against any damages awarded to the plaintiff.

Hospital Lien Act

§§ 38-27-101 – 106

  • CRSA §38-27-101 (Legislation to replace this section has been passed and will take effect either later this year or following the November 2016 election if a petition against it is filed)
    • (Current version) Every hospital shall have a lien for all reasonable and necessary charges for hospital care upon the net amount payable to such injured person out of the total recovery awarded as damages
    • (Amended version) (1) Before a lien is created, a hospital shall submit all reasonable and necessary charges for hospital care to the property and casualty insurer and the primary medical payer of benefits identified by the injured person in the same manner as used by the hospital for patients whose injuries are not the result of negligence by another person. (2) if no payers of benefits are identified, then a lien may be created. (3) If the hospital is notified of a payer of benefits after it creates a lien, then it shall make good-faith attempts to submit those charges to the insurer as normal. (7) an injured person who is subject to a lien in violation of this section may bring an action to recover two times the amount of the lien attempted to be asserted
  • CRSA §38-27-102: the lien will take effect if written notice of the lien is filed in the office of the secretary of state before settlement/judgment
  • CRSA §38-27-104: hospital must supply all relevant parties with an itemized statement of hospital charges claimed within the lien
  • No Attorney’s Fees Reduction
    • The holder of a hospital lies is not required to pay share of attorney fees incurred by patient (Trevino v. HHL Financial Services, Inc., 945 P.2d 1345 (Colo. 1997))
  • Balance Billing
    • Under CRSA §10-16-705(3), balance billing from network providers is prohibited. However, under CRSA §10-16-704, carriers might be balance billed if they use out of network/nonparticipating providers (this section is set to be amended in 2017)

Medicaid Statute

  • CRSA § 25.5-4-301(5)(a): State department has an automatic statutory lien against all judgments/settlements for all medical assistance given to a member as a result of third party liability
    • The lien shall be an amount that is the fullest extent allowed by federal law as applicable in this state, but not to exceed the amount of medical assistance provided
  • CRSA § 25.5-4-301(5)(c): except as otherwise provided in this article, the entire amount of any judgment/settlement, regardless of how characterized by the parties, shall be subject to the state department’s lien
    • P. ex rel. Cardenas v. Henneberry, 795 F. Supp. 2d 1189 (D. Colo. 2011) upheld the statute as constitutional under Ahlborn, saying that the provision that the lien is the largest amount allowed by federal law incorporates the Ahlborn holding that only medical expenses are reachable.
  • Fees reduction: CRSA § 25.5-4-301(5)(d) states that when the recipient brings the suit, the state department will pay its reasonable share of attorney fees not to exceed 25% of the state department’s lien. The state department shall not be liable for costs
  • CRSA § 25.5-4-301(6): when the recipient asserts a claim against a third party, the person shall give written notice to the state department within 15 days after filing the action
    • failure to comply will make the recipient liable for the entire amount of medical assistance furnished to or on behalf of the recipient

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