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Indiana Subrogation Laws
Sections
State Subrogation
Made Whole Doctrine
Common Fund
Collateral Source Rule
Hospital Lien Act
Medicaid Statute
State Subrogation
YES recognizes equitable and contractual
I.C. 34-53-1-1 subrogation rights and lien.
Made Whole Doctrine
YES, can contract around
- Erie Ins. Co. v. George, 681 N.E.2d 183, 188 (Ind. 1997). This case states that the Made Whole Doctrine can be overridden by contract terms in a policy or Plan.
- Capps v. Klebs, 382 N.E.2d 947 (Ind. Ct. App. 1978) states that a right to subrogation does not exist unless the whole debt has been paid, except where contract provides otherwise. The contact terms overriding the Made Whole Doctrine must be clear, unequivocal and so certain as to admit no doubt on the question.
- Also recognized in part by statute: Code §34-51-2-19 states that a subrogation claim or lien can be reduced because of comparative fault or by reason of the uncollectibility of the full value of the claim. The subrogation right will be diminished in the same proportion as the claimant’s recovery is diminished.
Common Fund
Yes, by statute
Ind. Code §34-53-1-2 states that an insurer claiming subrogation/reimbursement rights shall pay, out of the amount received form the insured, the insurer’s pro rata share of the reasonable and necessary costs and expenses of asserting the claim. This cost includes:
The cost of depositions
Witness fees
Attorney’s fees to the lesser of:
The amount contracted by the insured for the insured’s portion of the claim; or
1/3 of the amount of the settlement
Collateral Source Rule
Ind. Code §34-44-1-2 prohibits the introduction of evidence regarding payments made by an insurer
Hospital Lien Act
- Ind. Code §32-33-4-1, §32-33-4-3: A hospital shall have a lien for the reasonable value of its services or expenses on any judgment for personal injuries
- To claim the lien, the hospital must perfect it and enter the intention to hold a lien upon the judgment in the judgment docket after it is rendered
- No reduction for attorney’s fees, unless patient will not receive at least 20% of their settlement amount. If they won’t, then the lien will be reduced on a pro rata basis to allow patient to receive 20% §32-33-4-3 (c)
- Ind. Code §32-33-4-3.5(d): a hospital lien holder is barred from seeking from the patient payment for any amount of the hospital’s charges that exceed the patient’s financial obligation to the hospital under the terms of any private benefits to which the patient is entitled
- Ind. Code §32-33-4-4: to perfect the lien, the hospital must file a verified statement in the office of the recorder within 90 days after the person is discharged, or not later than the date of the final settlement
- Within 10 days of the filing, the hospital shall send a copy to each party
Medicaid Statute
- Ind. Code §12-15-8-1: the office has a lien against the third party tortfeasor in the amount paid by the office to the extent of the liability for the medical expenses
- Reduction: Subject to reductions in Code §34-51-2-19 – proportional reduction for comparative fault and uncollectibility
- Must pay pro rata share of costs and expenses – Ind. Code §12-15-8-7 (includes deposition costs, witness fees, other costs and expenses)
- Attorney’s Fees: Ind. Code §12-15-8-8 states that the office shall pay attorney’s fees in the amount of one of the following:
- 25% of the office’s recovery under the lien if the claim was collected without initiating legal proceedings
- 1/3 of the office’s recovery under the lien if the claim was collected by initiating legal proceedings
- Ind. Code §12-15-8-3: lien is not effective unless, before the final settlement has been reached, files in the Marion County court written notice of claim and mailed the statement to the relevant parties