West Virginia Subrogation Laws

State Subrogation

YES, equitable and contractual

Equitable principles will apply even when the subrogation right is based on a contract (Kanawha Valley Radiologists, Inc. v. One Valley Bank, N.A., 557 S.E.2d 277 (W.Va. 2001))

An insurer cannot assert a right of subrogation against a third party tortfeasor that it also insures – rather, the insurer must insert clear and unambiguous language with regard to reimbursement in its contracts (Richards v. Allstate Ins. Co., 455 S.E.2d 803 (W.Va. 1995)).

Made Whole Doctrine

YES, can contract around with clear provisions, not just a general subrogation clause (Kanawha Valley Radiologists, Inc. v. One Valley Bank, N.A., 557 S.E.2d 277 (W.Va. 2001)).

Common Fund: YES

Insured is entitled to reduce amount paid to insurer by insurer’s proportionate share of attorney fees and expenses.  The 1/3 contingent fee arrangement between insured and attorney was reasonable, and insurer’s reimbursement was reduced by 1/3 (Bell v. Federal Kemper Ins. Co., 693 F. Supp. 446 (S.D. W. Va. 1988))

Collateral Source Rule

Applies, evidence is inadmissible

Hospital Lien Act

West Virginia has no hospital lien act

Medicaid Statute

• W. Va. Code §9-5-11
  • The department is subrogated to the rights of a recipient against a third party, the department shall have a priority right to be paid first out of any payments made to the recipient before the recipient can recover any of their own costs for medical care
  • Reduction: from the amount to be paid to the department there shall be deducted the reasonable costs and attorney’s fees attributable to the amount in accordance with and in proportion to the fee arrangement made between the recipient and his/her attorney
  • any settlement by a recipient which would otherwise fully resolve the claim for an amount collectively not to exceed $20,000 shall be exempt from the provisions of this section
  • A recipient must provide notice to the department within 60 days of filing a claim
  • If the total amount of the settlement is less than the department’s subrogation lien, then the settling parties shall obtain the department’s consent to the settlement before finalizing the settlement
  • If parties continue to disagree over the amount the department is entitled to, a judicial evidentiary hearing can be held
  • an allocation of the recovery between damages for past medical expenses and other damages must be determined, using a judicial hearing if necessary – the Ahlborn ratio method for determining the department’s amount is acceptable (In re E.B., 729 S.E.2d 270 (W. Va. 2012))