New York Subrogation Laws

State Subrogation

YES and NO

N.Y. Gen. Oblig. Law §5-335 prohibits subrogation in settlements, as settlement awards cannot include damages for the cost of health care services already paid for by an insurer.

This does not prohibit subrogation in cases that go all the way to a verdict (Rizzo v. Moseley, 913 N.Y.S.2d 905 (N.Y. Sup. Ct. 2010)).

Made Whole Doctrine

YES, cannot contract around

The court in Winkelmann introduced the Made Whole Doctrine to New York in the context of equitable subrogation, and the court in Maggiore extended the doctrine to contractual subrogation as well. (See e.g. Winkelmann v. Excelsior Ins. Co., 650 N.E.2d 841 (N.Y. 1995), USF & G v. Maggiore, 749 N.Y.S.2d 555 (N.Y. App. Div. 2002)).

Fasso v. Doerr and Rink v. State both seem to indicate that you cannot contract around the Made Whole Doctrine. (Fasso v Doerr, 12 NY3d 80; 903 NE2d 1167 (2009) and Rink v State, 27 Misc 3d 1159, 1164; 901 NYS2d 480, 484 (2010)).

Common Fund

YES, attorney is entitled to reasonable compensation (Richards v. United Health Services, 509 N.Y.S.2d 172 (N.Y. App. Div. 1986)).

Collateral Source Rules

N.Y. C.P.L.R. §4545 governs, evidence IS admissible

Where Insurer has obligation to pay Insured and insured gets judgment award., the award will be reduced by the amount Insurer paid or is obligated to pay Insured, less premiums paid by Insured for two years before incident and cost to maintain benefit into the future. Voluntary charitable contributions to Insured do not count as collateral source for purposes of reducing the award.

Hospital Lien Act

• N.Y. Lien Law §189(1): A hospital will have a lien for the amount of reasonable charges of such hospital for treatment, care, etc. at cost rates in such hospital
  • no lien shall be effective unless written notice is mailed to the interested parties and file a statement with the county clerk
• N.Y. Lien Law §189(7): The hospital lien will not take priority over an attorney lien

Medicaid Statute

• N.Y. Soc. Serv. Law §104-b(1): The public welfare official has a lien for such amount as may be fixed by the public welfare official not exceeding the total amount of such assistance and care furnished by the district. The recipient must notify the district upon beginning a suit
• Reduction: “Only the public welfare official has the authority ‘both to fix the amount of the lien and to release and discharge it’” James v. City of Olean, 765 N.Y.S.2d 88 (N.Y. App. Div. 2003).
• N.Y. Soc. Serv. Law §104-b(2): no lien will be effective without written notice and a brief statement of the amount claimed served to the interested parties. This must also be filed with the county clerk
• N.Y. Soc. Serv. Law §104-b(9): An attorney’s lien will have priority
• N.Y. Soc. Serv. Law §104-b(13): the official may in his discretion release to the injured person an amount not to exceed the cost of two years’ maintenance from the lien herein created