[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]
Hawaii Subrogation Laws
Sections
State Subrogation
Made-Whole Doctrine
Common-Fund Doctrine
Collateral Source Rule
Hospital Lien Act
Medicaid Statute
State Subrogation
Equitable and contractual subrogation recognized, contractual provisions trump equitable concerns (State Farm Fire and Cas. Co. v. Pacific Rent-All, Inc., 978 P.2d 753 (Haw. 1999) (products liability case)
Not explicitly addressed in medical benefits situations yet. Statutory right for motor vehicle insurers to be reimbursed 50%of the benefits paid (HRS §431:10C-307). Does not like to provide double recovery to the insured.
HRS §431:10C-307 there is proposed legislation regarding this statute.
The Minnesota Court of Appeals interpreted Hawaiian law and declared that the plain language of §431:10C-307 does not abrogate a no-fault insurer’s subrogation rights against a tortfeasor or a tortfeasor’s insurer at common law. American Family Mut. Ins. Co. v. American Automobile Ass’n d/b/a/ Auto Club Ins. Ass’n, 2013 WL 656493.
HRS §663-10 recognizes the existence of liens arising out of collateral sources, including health insurance or benefits
Made-Whole Doctrine
YES, possible to contract around.
- AIG Hawaii Ins. Co., Inc. v. Rutledge, 955 P.2d 1069 (Haw. Ct. App. 1998). This case states that the insured needs to be made whole before an uninsured motorist (UM) carrier may require the insurer to reimburse the UM carrier after receiving a tort recovery from an UM or party jointly liable with the uninsured tortfeasor.
- State Farm Fire & Cas. Co. v. Pacific Rent-All, Inc., 978 P.2d 753 (Haw. 1999). Hawaii has not specifically applied the Made Whole Doctrine in a traditional subrogation case. In Hawaii, the right to contractual subrogation, as opposed to equitable subrogation, does not depend on principles of equity. When subrogation claimed by an insurer is based on a contract, the policy’s subrogation provisions seem to constitute the sole measure of its rights.
- No mention of whether one can contract around the Made Whole Doctrine, but given the emphasis State Farm v. Pacific Rent-All places on contractual provisions, it seems that contracting around would be possible.
Common-Fund Doctrine
Has been recognized in class-action litigation (In re Water Use Permit Applications, 25 P.3d 802, 804 (Haw. 2001)).
Schefke v Reliable Collection Agency, Ltd, 96 Hawai’i 408; 32 P3d 52 (2001), as amended (Oct. 11, 2001). This case recognized the common fund doctrine in an age discrimination, retaliation and unpaid wages case. “The common fund doctrine provides that a private plaintiff, or his or her attorney, whose efforts create, discover, increase, or preserve a fund to which other also have a claim is entitled to recover from the fund the costs of his or her litigation, including attorneys’ fees.” Statute recognizing liens arising out of collateral source benefits requires the deduction of a reasonable sum for costs and fees (HRS §663-10).
Collateral Source Rule
Benefits awarded from collateral sources should not reduce settlements/judgments (Bynum v. Magno, 101 P.3d 1149 (Haw. 2004)).
Hospital Lien Act
- HRS §507-4: Hospitals shall have a lien on judgments/settlement arising from third party caused injuries that the hospital treated the patient for
- Before the satisfaction of the judgment is docketed, the hospital must file in the office of the chief clerk of whatever court issued the judgment a notice setting for the reasonable value of the services performed
- No case law mentions of hospital balance billing outside of the Medicare/Medicaid context
Medicaid Statute
- How to distribute reimbursement (HRS §346-37(h)):
- If the department did not intervene or join in the action, then:
- If the lien is less than or equal to 1/3 of the judgment/settlement and there is no allocation by a judge, then there shall be a rebuttable presumption that the amount of reimbursement due to the department is the total payments for medical assistance by the department or 1/3 of the settlement, whichever is less.
- The department’s fair share of attorney’s fees shall be deducted from the department’s lien recovery. There shall be a rebuttable presumption that 1/3 of the department’s gross reimbursement amount plus a proportionate share of the general excise tax is a reasonable amount for the department’s contribution to attorney’s fees
- If the department alone prosecutes the claims, it shall not be required to reduce its lien on account of attorney’s fees or expenses
- If the claimant’s attorney and the department secure the settlement/judgment, the department’s fair contribution toward attorney’s fees and costs shall be a reasonable amount based solely upon legitimate costs and services rendered by the claimant or claimant’s attorney
- The department’s lien, after reduction for attorney’s fees, shall not exceed 1/3 of the judgment/settlement
- If the department did not intervene or join in the action, then:
- HRS §346-37(c): if the department has provided medical assistance to a person who was injured under circumstances creating a tort or other liability against a third person, the department shall have a right to recover from the third person an amount not to exceed the full amount of the costs of medical assistance furnished or to be furnished by the department
- HRS §346-37(d): the department shall be subrogated to all rights or claims that the claimant has against the third person, not to exceed the full extent of the costs of medical assistance furnished or to be furnished by the department
- HRS §346-37(e): claimant must give notice to the department of any claim against a third party
- HRS §346-37(f): the department shall have a lien for up to the full amount of the costs of medical assistance made against the proceeds from damages recovered in a settlement/judgment
- HRS §346-37(g); the department must provide written notice of a lien to all parties
- HRS §346-37(h): the lien shall be satisfied from that portion of the settlement/judgment allocated to payments by the department for medical assistance. Any allocation by a judge, jury, arbitrator, dispute resolution person shall be binding. If there is no allocation, a reasonable allocation shall be determined by agreement, administrative hearing, or a court of competent jurisdiction.