Vermont Subrogation Laws

State Subrogation

YES, recognizes both contractual and equitable, but…

Court seems hesitant to apply equitable subrogation in the absence of a plain and unambiguous subrogation clause in medical benefits cases.  In Ulm v. Ford Motor Co., 750 A.2d 981 (Vt. 2000), the contract at issue contained a reimbursement right, but the provider wanted the court to apply an equitable right to subrogation.  The court refused, as there was no plain and unambiguous subrogation clause.  The court said: “The equitable purpose of subrogation is not served when, as here, neither the actions of the insured nor the policy of the insurer require recognition of a right of subrogation.” Ulm v. Ford Motor Co., 750 A.2d 981, 993 (Vt. 2000).

Made Whole Doctrine

NO

Common Fund

YES, doctrine will be applied and proportional attorney’s fees awarded only after a court determines that it is equitable to do so (Guiel v. Allstate Ins. Co., 756 A.2d 777 (Vt. 2000)) and Daniels v Vermont Ctr for Crime Victims Services, 173 Vt 521, 522; 790 A2d 376, 378 (2001).

Collateral Source Rule

Applies, evidence is inadmissible

Hospital Lien Act

• Vt. Stat. Ann. §2251: A hospital shall have a lien upon any recovery for damages to be received by the patient
  • This lien shall not attach to 1/3 of said recovery, or $500.00, whichever is less
  • Subordinate to an attorney’s lien
• Vt. Stat. Ann. §2252: the lien shall not be effective unless written notice is filed in the office of the clerk of the town, nor unless the hospital mails a copy of notice to all interested parties

Medicaid Statute

Vt Stat Ann tit. 33, § 1910 (West)

• The agency shall have a lien against a third party to the extent of the amount paid by the agency for medical expenses
• Reduction: In making the determination whether to pursue, reduce, or compromise a claim, the agency may in its discretion consider the factual, evidentiary, and legal issues of liability and the total amount available to satisfy the recipient’s claim. Where the amount of reimbursement the agency can expect to recover exceeds the costs of such recovery, the agency shall not be required to seek reimbursement from or may reduce a claim
• Attorney’s fees: Whenever the agency recovers as a result of an action initiated by the recipient, the recipient may withhold the agency’s pro rata share of reasonably necessary attorney’s fees, costs, and expenses
• The recipient must cooperate with the agency and inform the agency when a claim will be brought
• The recipient must pay to the agency the full amount of medical expenses owed
• A lien shall not be effective unless notice is filed in the office of the clerk of the town and mailed to the interested parties