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Rhode Island Subrogation Laws
Sections
State Subrogation
Made Whole Doctrine
Common Fund
Collateral Source Rule
Hospital Lien Act
Medicaid Statute
Statutes
State Subrogation
YES, equitable and contractual (Hospital Service Corp. of R.I. v. Pennsylvania Ins. Co., 227 A.2d 105 (R.I. 1967)).
Made Whole Doctrine
No, in health insurance (Ditomasso v. Ocean State Physicians Health Plan, Inc., 1988 WL 1016798 (R.I. Super. Ct. 1988)).
The doctrine had been previously applied in a general liability insurance case, but Ditomasso holds that this does not apply in a health insurance case. The contract language will delineate the rights and obligations of the parties. (Id.)
Rhode Island appears to disallow contractual limitations or subrogation provisions that curtail an insured’s recovery where the insured has not recovered the amount of his/her actual loss. (DiTata v. Aetna Cas. And Sur. Co., 542 A.2d 245 (R.I. 1998)).
Common Fund
YES, insurer should contribute to legal expenses incurred by insured in obtaining settlement, as long as it receives benefit from settlement obtained through efforts of insured’s attorney (Jennings v. Nationwide Ins. Co., 669 A.2d 534 (R.I. 1996) and Blue Cross & Blue Shield of Rhode Island v Najarian, 911 A2d 706, 707 (RI 2006)).
Collateral Source Rule
Applies, evidence is inadmissible
Hospital Lien Act
- R.I. Gen. Laws §9-3-4: hospital will have lien to the amount of the reasonable and necessary charges of the hospital up to the date of payment of the damages
- Attorney lien has precedence
- R.I. Gen. Laws §9-3-4: no lien will be effective unless written notice is filed in the office of the city clerk as well as mailed notice to all the interested parties
Medicaid Statute
- R.I. Gen. Laws §40-6-9(a and b): the department of human services has a subrogation right. By receiving benefits, the recipient automatically appoints the executive office of health and human services to be his/her true and lawful attorney, able to perform tasks such as collecting any amounts due and owing for medical support and retaining any portion thereof permitted under federal and state law as reimbursement
- R.I. Gen. Laws §40-6-9(c): the department is assigned the rights to an amount of money equal to the amount of financial assistance provided
- R.I. Gen. Laws §40-6-9(d): the recipient must provide all relevant information regarding the department’s subrogation rights to the department
- U.S. Inv. And Development Corp. v. Rhode Island Dept. of Human Services, 606 A.2d 1314 (R.I. 1992): the state should pay a pro rata share of attorney’s fees if the recipient incurred litigation costs and will not get the full amount of recovery. The recipient of benefits bears the burden of showing that the assessment of a pro rata share is equitable and that the recovery costs are justified
Statutes
RI General Laws 27-8-12 says that when an Insurer is reimbursed by the tortfeasor, Insurer must give to Insured an amount equal to Insured’s deductible, less the pro rata cost of procuring the reimbursement from the tortfeasor.