Subrogation Laws in All 50 States - Interactive Map

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Georgia Subrogation Laws

State Subrogation Statute

Ga. Code Ann. §33-24-56.1: the insurer can require reimbursement from the insured’s judgment/settlement.

However, direct subrogation for medical expenses by the insured against the liable third party is prohibited. Any subrogation provision in an insurance contract is invalid.

Ga. Code Ann. §33-24-56.1(j): no benefit provider contracts or policies containing or incorporating provisions in conflict with this section may be issued in this state.

Made Whole Doctrine

YES, no contracting around

  • Georgia Cas. & Sur. Co. v. Woodcraft by MacDonald, Inc., 726 S.E.2d 793 (Ga. App. 2012). For the Made Whole Doctrine to apply, there must be a contest between the insured and insurer over a limited pool of funds which could result in the insured going unpaid to some extent.
  • Code Ann. §33-24-56.1. The Full Compensation rule was codified in §33-24-56.1. The statute provides that a benefit provider may provide for in its policy language and pursue reimbursement for such medical expenses from the injured party only if the injured party has received a recovery that “exceeds the sum of all economic and non-economic losses incurred as a result of the injury, exclusive of losses for which reimbursement may be sought under the statute. The legislature stated that subrogation for medical expenses and disability payments by a benefit provider directly against the tortfeasor is prohibited.
  • In a workers’ compensation case, which has a similar statute, the Georgia Court of Appeals held that without a special verdict outlining what parts of the settlement/judgment are for what losses, it is impossible to determine whether the insured was made whole and thus there can be no reimbursement.
  • Duncan v. Integon Gen. Ins. Corp., 482 S.E.2d 325 (Ga. 1997). Where the insurer of the insured must go unpaid to some extent, the loss should be borne by the insurer, since the insurer has already been paid a premium for assuming this risk and would have been obligated to pay medical expenses regardless of its insured’s negligence and regardless of whether a culpable third party could have been found.
  • The court held that a Plan beneficiary is presumed to be made whole if he voluntarily settles his or her case within policy limits. (Thompson v. Federal Exp. Corp., 809 F. Supp. 950 (M.D. Ga. 1992)). Doesn’t seem to be an agreement within the other district or state courts though. Smith v. Life Ins. Co., 466 F. Supp. 1275 (N.D. Ga. 2006) distinguished itself from Thompson, holding that since Thompson didn’t deal with an OGCA §33-24-56.1 claim, the Thompson logic didn’t apply.

Common Fund

YES, no contracting around

“(b)(2) The amount of the reimbursement claim is reduced by the pro rata amount of the attorney’s fees and expenses of litigation incurred by the injured party in bringing he claim.” Ga. Code Ann. §33-24-56.1

Some courts have interrupted the Georgia statute differently. Watts v. Promina Gwinnett Health System, 242 Ga. App. 377, 530 S.E.2d 14 (Ga. App., 2000). This case states the common fund doctrine does not apply to reduce hospital liens pro-rata by the fee you have to pay your lawyer.

Collateral Source Rules

Rule applies in tort recovery cases

Hospital Lien Act

  • Code Ann. §44-14-470: any hospital shall have a lien for the reasonable charges for medical care and treatment
    • To perfect the lien, must provide written notice to the parties and file a verified statement in the office of the clerk of the superior court. The statement must be filed if by a hospital within 75 days after discharge, or if by a physician practice within 90 days after the patient first sought treatment ( Code Ann. §44-14-471)
      • Failure to timely perfect/file the lien shall not bar enforceability (Macon-Bibb County Hosp. Authority v. National Union Fire Ins. Co., 793 F. Supp. 321 (M.D. Ga. 1992)
  • Code Ann. §44-14-473: the claimant may enforce the lien by an action against the party liable for the damages – the action must be commenced within 1 year after the date of liability is determined
  • Absence of a debt owed to the hospital to the hospital does not limit the hospital’s lien rights (MCG Health, Inc. v. Kight, 750 S.E.2d 813 (Ga. Ct. App. 2013))

Medicaid Statute

  • Code Ann. §49-4-148: the department shall be subrogated, but only to the extent of the reasonable value of the medical assistance paid and attributable to injury/sickness/etc. that occurred as a result of a third party
  • Code Ann. §49-4-149 the department shall have a lien for the charges for medical care and treatment
    • No reduction for attorney’s fees when the settlement is large enough to satisfy the Medicaid lien and pay attorney’s fees (Padgett v. Toal, 581 S.E.2d 744 (Ga. Ct. App. 2003))
    • May perfect and enforce a lien through the same procedures as under the Hospital Lien act. The department shall have 1 year from the date the last item of medical care was furnished to file its lien statement
    • The department shall be subrogated to the extent of the reasonable value of medical assistance paid; however the subrogation right does not attach to any recipient’s rights to benefits paid or provided under private health care coverage prior to the receipt of written notice of the exercise by the department of its subrogation rights
    • Richards v. Georgia Dept. of Community Health, 604 S.E.2d 815 (Ga. 2004) reads the statute as creating a lien against any funds recovered in a tort action, not just the portion for medical expenses
      • Does not appear to have been challenged after Ahlborn

Additional Cases

Sun Trust Bank v. Travelers Ins. Co., 740 S.E.2d 824 (Ga. Ct. App. 2013). Here the Georgia Court of Appeals says that a settlement in a third-party tort action where the Insured entered into a secret lump-sum settlement with the tortfeasor’s Insurer and included language that said the Insured was not fully compensated in an attempt to deflate Insurer’s subrogation rights would not work. It said that the Insurer could put it to the trial court as finder of fact to determine if the Insured had been made whole.

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