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District of Columbia Subrogation Laws
Sections
State Subrogation
Made Whole Doctrine
Common Fund
Collateral Source Rules
Hospital Lien Act
Medicaid Statute
Additional Cases
State Subrogation
Recognizes equitable and contractual subrogation
The insurer’s right to subrogation does not depend on the existence of a contractual provision – it will be honored regardless of contract based on principles of equity (Trinity Universal Ins. Co. v. Moore, 134 A.2d 333 (D.C. 1957))
Made Whole Doctrine
YES, can contract around with a provision of sufficient clarity (District No. 1 – Pacific Coast Distributors v. Travelers Casualty & Surety Co., 782 A.2d 269 (D.C. 2001)).
Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Riggs Nat’l Bank of Wash., D.C., 646 A.2d 966 (D.C. 1994). In C. the Made Whole Doctrine is a default rule meaning you can contract around it. In D.C. you can contract out of the Made Whole Doctrine by using sufficient language. The language needs to indicate the intent of the parties to avoid the effect of the Made Whole Doctrine.
Common Fund
No occasion yet to apply common fund to a healthcare subrogation case. But has recognized it for other issues, such as education (In re Antioch Univ., 482 A.2d 133 (D.C. 1984)).
Collateral Source Rules
Common law rule applies, evidence is not admissible unless the tortfeasor was the one who provided the collateral source benefits
Hospital Lien Act
- DC ST §40-201: A hospital shall have a lien for all reasonable and necessary charges the hospital incurs treating a person for injuries not covered under the Employees’ Compensation Act or the Workmen’s Compensation Act.
- Won’t be effective without written notice filed in the Office of the Recorder of Deeds of the District of Columbia, as well as mailed to all parties (DC ST §40-202)
- No statutory or case law mentions of attorney’s fees/reductions
Medicaid Statute
- DC ST §4-607: the District has a lien upon any judgment/settlement for the amount that represents the care and treatment it has provided the beneficiary
- Reduction: if beneficiary prosecutes the claim, the Mayor/District shall determine in good faith what, if any, contribution to the attorney’s fees and litigation costs would be appropriate, and then subtract that from the amount of the lien
- Costs and fees have priority over the Medicaid lien
- Beneficiary retains the amount that remains after the deduction of costs/fees and any amount necessary to reimburse the District
- Mayor must perfect lien by filing in the Office of the Recorder of Deeds written notice and serving all parties a copy of the notice
- Reduction: if beneficiary prosecutes the claim, the Mayor/District shall determine in good faith what, if any, contribution to the attorney’s fees and litigation costs would be appropriate, and then subtract that from the amount of the lien
- DC ST §4-602: when the district provides health care assistance to a beneficiary who has suffered an injury for which a third party is liable, the district has an independent direct cause of action against that third party for the unreimbursed value or cost of the health care assistance provided. The district is immediately subrogated to any claim the beneficiary has against the third party.
- DC ST §4-602: the beneficiary will be responsible for providing the district with notice of any suspected third-party liability cases. If the beneficiary institutes a proceeding against a third party, it shall have 20 days to notify the district
- After deducting for beneficiary’s litigation costs/attorney’s fees, the third party may not satisfy the remainder of the judgment/settlement without first giving written notice of the settlement/judgment to the district and giving the district 30 days to determine the appropriateness of a lien under §4-606
- Waiver provision: DC ST §4-604: The Mayor may waive, in whole or in part, the District’s claim for reimbursement if enforcement in a particular case would not be cost effective or would result in undue hardship to the beneficiary
- Mayor or court should give due consideration to the extent of the beneficiary’s injuries and his/her current/future needs
Additional Cases
In Fisher v. GEICO 762 A.2d 35 (2000)), the DC Court of Appeals said that ERISA didn’t preempt the District’s no-fault insurance act which said auto Insurers didn’t have to pay PIP benefits when there was another Insurer able to pay. In this case, it was the Insured’s employer-provided health insurance.