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Kansas Subrogation Laws
Sections
State Subrogation
Made Whole Doctrine
Common Fund
Collateral Source Rules
Hospital Lien Act
Medicaid Statute
Additional Cases
State Subrogation
NO
Kan. Admin. Reg. §40-1-20 prohibits insurance companies from issuing contracts that have subrogation clauses, or their equivalents. This section does not apply to FEHBA cases. This regulation was preempted by Helfrich v Blue Cross & Blue Shield Ass’n, 804 F3d 1090, 1093 (CA 10 2015). This case established FEHBA preemption.
Made Whole Doctrine
N/A
But for policies outside the authority of the regulation, such as those from other states, the Kansas Supreme Court says it’s within the discretion of the trial court to apply equitable standards to ensure the Insured is made whole. Gillespie v. Seymour (823 P.2d 782 (1991)). However, §40-1-20 does not apply to cases dealing with FEHBA because of preemption.
Common Fund
N/A
Collateral Source Rules
“When medical treatment expenses are paid from a collateral source at a discounted rate, determining the reasonable value of the medical services becomes an issue for the finder of fact. Stated more completely, when a finder of fact is determining the reasonable value of medical services, the collateral source rule bars admission of evidence stating that the expenses were paid by a collateral source. However, the rule does not address, much less bar, the admission of evidence indicating that something less than the charged amount has satisfied, or will satisfy, the amount billed.” Martinez v. Milburn Enterprises, Inc., 233 P.3d 205, 222-23 (Kan. 2010).
Hospital Lien Act
- Stat. Ann. §65-406: hospitals shall have a lien to the amount of the reasonable and necessary hospital charges for treatment, subject to the following limitations
- If lien < $5,000: shall be fully enforceable
- If lien > $5,000: the first $5,000 shall be fully enforceable and the remaining amount shall only be enforceable to the extent its enforcement constitutes an equitable distribution of any settlement or judgment under the circumstances
- If parties can’t agree on an equitable distribution, the courts will decide for them
- Attorney’s fees will be taken out of the total settlement amount, and then the hospital lien will be considered (Harlow v. Lloyd, 809 P.2d 1228 (Kan. Ct. App. 1991))
- Kan. Stat. Ann. §65-407: No lien shall be effective without written notice
- Substantial, rather than strict, compliance with the notice requirement satisfies the legislative intent (Via Christi Regional Medical Center, Inc. v. Reed, 314 P.3d 852 (Kan. 2013))
Medicaid Statute
- Stat. Ann. §39-719a: Medicaid may recover from a recipient’s settlement/judgment the amount of medical expenses paid to or on behalf of the recipient
- Attorney’s Fees: the court shall fix attorney’s fees, paid proportionately by the secretary and injured person
- Can’t exceed 1/3 of the medical assistance recovered in a cases settled prior to trial
- Can’t exceed 2/5 of the medical assistance recovered when a trial is convened
- Reduction: Medicaid’s right of subrogation shall be reduced by the percentage of negligence attributable to the injured person
- Attorney’s Fees: the court shall fix attorney’s fees, paid proportionately by the secretary and injured person
Additional Cases
State Farm v. Kroeker, 676 P.2d 66 (Kan. 1984) – This case says that when the proceeds of the Insured’s PIP benefits are less than Insured’s total damages, then a settlement with tortfeasor that doesn’t create any double recovery in areas covered by PIP benefits will not entitle Insurer to reimbursement from the settlement proceeds.