Subrogation Laws in All 50 States - Interactive Map

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Click on your state for a brief summary of that state's laws affecting or impacting subrogation recoveries.

 

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Minnesota Subrogation Laws

State Subrogation

YES, contractual and equitable. Minn. Stat. §62A.095 governs

By statute: no health plan may contain a subrogation clause unless:

  • The clause provides that it applies only after the covered person has received a full recovery from another source
  • The clause provides that the right is subject to subtraction of pro rata share of the insured’s costs, disbursements, and reasonable attorneys’ fees, unless the insurer is separately represented by an attorney

Even when the right to subrogation is contractual, principles of equity will apply unless the agreement clearly and explicitly provides to the contrary (Westendorf by Westendorf v. Stasson, 330 N.W.2d 699 (Minn. 1983))

Made Whole Doctrine

YES, applies by statute and appears that you can contract around.

Minn. Stat. §62A.095 forbids insurance contracts from containing subrogation clauses unless they require that the insured gets made whole before the insurer can recover.  There is previous case law that the doctrine can be contracted around (Hershey v. Physicians Health Plan of Minnesota, Inc., 498 N.W.2d 519 (Minn. Ct. App. 1993)).

Medica, Inc. v. Atlantic Mut. Ins. Co., 566 N.W.2d 74, 77 (Minn. 1997). This case opened the door to avoiding the Full Recovery Rule where the Plan’s expressed terms provide to the contrary. The Minnesota Supreme Court, referring to the full recovery rule stated “absent express contract terms to the contrary, subrogation will not be allowed where the insured’s total recovery is less than the insured’s actual loss.”

First, you must determine if the insured is made whole. Then, if the answer is no, you must look to see if the agreement “supersedes the general rules of equity by stating that [the insurer] is to be reimbursed even if its member recovers less than full compensation. Westendorf by Westendorf v. Stasson, 330 N.W.2d 699 (Minn. 1983). It is not clear from the case what language needs to be used to waive the Made Whole Doctrine. However, if the parties have made their intent clear the Made Whole Doctrine can be waived.

Common Fund

YES, applies by statute

Minn. Stat. §62A.095 forbids insurance contracts from containing subrogation clauses unless they provide that the subrogation right is subject to subtraction for amounts paid to account for pro rata share of fees and costs. (There is proposed legislation as of 9/27/16 but nothing has been amended yet.)

Minn Stat. §548.251 subd. 4 states that any subrogated provider of a collateral source not separately represented by counsel shall pay the same percentage of attorney fees as paid by the plaintiff and shall pay it proportionate share of the costs.

Collateral Source Rules

Minn Stat. §548.251 governs

Statute says that a party can file a motion within 10 days of the verdict requesting a determination of collateral sources.  This includes amounts of collateral sources that have been paid for the benefit of or are available to the plaintiff, except those for which a subrogation right exists.  Thus, recoveries subject to a subrogation right will not be considered.  If there is no subrogation right, then the recovery can be reduced by the amount of collateral sources less the amount that the plaintiff has paid to get the benefits.

Hospital Lien Act

  • Minn. Stat. §514.68: a hospital shall have a lien for the reasonable charges for hospital care – subject to an attorney’s lien
  • Minn. Stat. §514.69: to perfect the lien, the hospital must file within 10 days of discharge a verified written statement in the office of the county. Must also mail the statement to the interested parties
  • Minn. Stat. §62K.11: prohibits network providers from balance billing

Medicaid Statute

Minn. Stat. §256B.042

  • Subdivision 1: the state shall have a lien for the cost of care
  • Subdivision 5 Costs deducted: upon any judgment/settlement, reasonable costs of collection/attorney fees must be deducted first. The full amount of medical assistance paid to or on behalf of the recipient must be deducted next and paid to the agency.  The rest is then paid to the recipient.  However, the plaintiff/recipient must receive at least 1/3 of the net recovery after attorney fees and costs.
  • Subdivision 2: may perfect a lien by filing a verified statement with the appropriate court administrator – has one year from the day it is first on notice or one year from the date medical bills are first paid to perfect
  • Subdivision 4: the state must be given notice of monetary claims against a third party, recipient of benefits must notify

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