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A348, R405, S669
STATUS INFORMATION
General Bill
Sponsors: Senator Alexander
Document Path: l:\council\bills\nbd\11206ac07.doc
Companion/Similar bill(s): 4719, 5020
Introduced in the Senate on April 12, 2007
Introduced in the House on March 6, 2008
Last Amended on May 28, 2008
Passed by the General Assembly on June 5, 2008
Governor's Action: June 16, 2008, Signed
Summary: Insurers responsible for payment of claim
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number
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4/12/2007 Senate Introduced and read first time SJ-14
4/12/2007 Senate Referred to Committee on Medical Affairs SJ-14
2/27/2008 Senate Committee report: Favorable Medical Affairs SJ-7
2/28/2008 Senate Read second time SJ-4
2/28/2008 Scrivener's error corrected
3/5/2008 Senate Read third time and sent to House SJ-20
3/6/2008 House Introduced and read first time HJ-13
3/6/2008 House Referred to Committee on Labor, Commerce and Industry
HJ-13
4/2/2008 House Recalled from Committee on Labor, Commerce and Industry
HJ-35
4/2/2008 House Referred to Committee on Medical, Military, Public and
Municipal Affairs HJ-35
5/21/2008 House Committee report: Favorable with amendment Medical,
Military, Public and Municipal Affairs HJ-203
5/23/2008 Scrivener's error corrected
5/28/2008 House Debate adjourned HJ-27
5/28/2008 House Amended HJ-152
5/28/2008 House Read second time HJ-163
5/29/2008 House Read third time and returned to Senate with amendments
HJ-8
6/3/2008 Scrivener's error corrected
6/5/2008 Senate Concurred in House amendment and enrolled SJ-139
6/10/2008 Ratified R 405
6/16/2008 Signed By Governor
6/27/2008 Copies available
6/27/2008 Effective date 06/16/08
7/11/2008 Act No. 348
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
4/12/2007
2/27/2008
2/28/2008
5/21/2008
5/23/2008
5/28/2008
6/3/2008
(A348, R405, S669)
AN ACT TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 43-7-465 SO AS TO PROVIDE THAT AN INSURER THAT IS RESPONSIBLE FOR PAYMENT OF A CLAIM FOR A HEALTH CARE ITEM OR SERVICE AS A CONDITION OF DOING BUSINESS IN THIS STATE SHALL PROVIDE INFORMATION TO THE DEPARTMENT OF HEALTH AND HUMAN SERVICES ON INDIVIDUALS WHO RECEIVE MEDICAL ASSISTANCE UNDER THE STATE PLAN, SHALL ACCEPT THE STATE'S RIGHT OF RECOVERY OF CERTAIN PAYMENTS MADE UNDER THE STATE PLAN, SHALL RESPOND TO CLAIMS, AND SHALL AGREE NOT TO DENY CLAIMS ON THE BASIS OF THE TIME THE CLAIM WAS FILED, IF TIMELY FILED, THE FORMAT OF THE CLAIM FORM, OR FAILURE TO PRESENT DOCUMENTATION AT THE POINT OF SALE THAT IS THE BASIS OF THE CLAIM; TO AMEND SECTION 43-7-410, AS AMENDED, RELATING TO THE DEFINITION OF TERMS USED IN THE ASSIGNMENT AND SUBROGATION OF CLAIMS FOR REIMBURSEMENT FOR MEDICAID SERVICES, SO AS TO REVISE CERTAIN DEFINITIONS; TO AMEND SECTION 43-7-420, RELATING TO THE ASSIGNMENT OF RIGHTS TO THE DEPARTMENT OF HEALTH AND HUMAN SERVICES TO RECOVER FROM THIRD PARTIES AMOUNTS PAID BY MEDICAID, SO AS TO PROVIDE THAT APPLYING FOR OR RECEIVING MEDICAID BENEFITS CREATES A REBUTTABLE PRESUMPTION THAT THE PERSON WAS INFORMED OF THE ASSIGNMENT OF HIS RIGHT TO THE DEPARTMENT TO RECOVER FROM A THIRD PARTY AMOUNTS PAID BY MEDICAID; TO AMEND SECTION 43-7-430, RELATING TO SUBROGATION TO THE DEPARTMENT OF THE RIGHT TO RECOVER FROM THIRD PARTIES AMOUNTS PAID BY MEDICAID, SO AS TO DELETE OBSOLETE REFERENCES AND TO MAKE TECHNICAL CORRECTIONS; TO AMEND SECTION 43-7-440, AS AMENDED, RELATING TO ENFORCEMENT OF AND SUPERIORITY OF THE DEPARTMENT'S SUBROGATION RIGHTS, SO AS TO DELETE OBSOLETE REFERENCES AND MAKE TECHNICAL CORRECTIONS; TO AMEND SECTION 43-7-460, AS AMENDED, RELATING TO RECOVERY FROM ESTATES OF MEDICAID RECIPIENTS AMOUNTS PAID FOR SERVICES THROUGH MEDICAID, SO AS TO DELETE OBSOLETE LANGUAGE, MAKE TECHNICAL CORRECTIONS, AND TO REVISE THE DEFINITION OF "IMMEDIATE FAMILY MEMBER" TO INCLUDE GRANDCHILDREN; TO AMEND SECTION 38-79-130, RELATING TO THE POWERS OF SOUTH CAROLINA MEDICAL MALPRACTICE LIABILITY JOINT UNDERWRITING ASSOCIATION, INCLUDING THE POWER TO ISSUE MEDICAL MALPRACTICE POLICIES, SO AS TO AUTHORIZE THE ASSOCIATION TO INCREASE ITS POLICY LIMITS UP TO ONE MILLION DOLLARS PER CLAIM AND THREE MILLION DOLLARS FOR ALL CLAIMS IN ANY ONE YEAR UPON APPROVAL OF THE BOARD; TO AMEND SECTION 38-79-420, AS AMENDED, RELATING TO THE CREATION OF THE PATIENTS' COMPENSATION FUND, INCLUDING PAYMENT OF MEDICAL MALPRACTICE CLAIMS IN EXCESS OF POLICY LIMITS, SO AS TO AUTHORIZE THIS FUND TO ALSO MAKE PAYMENTS AS OTHERWISE PROVIDED FOR IN LAW; TO AMEND SECTION 38-79-430, RELATING TO THE CREATION OF THE BOARD OF GOVERNORS OF THE PATIENTS' COMPENSATION FUND, SO AS TO MAKE A TECHNICAL CORRECTION; TO AMEND SECTION 39-79-480, RELATING TO ACTIONS FOR DAMAGES ARISING OUT OF THE RENDERING OF MEDICAL SERVICES, SO AS TO PROVIDE THAT THE PATIENTS' COMPENSATION FUND ALSO MAY MAKE PAYMENTS AS OTHERWISE PROVIDED FOR IN LAW; AND TO AMEND SECTION 38-29-40, RELATING TO INSURANCE POLICIES, ANNUITY CONTRACTS, AND OTHER CONTRACTS TO WHICH THIS CHAPTER, THE "SOUTH CAROLINA LIFE AND ACCIDENT AND HEALTH INSURANCE GUARANTY ASSOCIATION", DOES OR DOES NOT APPLY, SO AS TO PROVIDE THAT THIS CHAPTER DOES NOT APPLY TO POLICIES OR CONTRACTS TO THE EXTENT THAT REQUIRED ASSESSMENTS OF MEMBERS OF THE ASSOCIATION ARE PREEMPTED BY FEDERAL OR STATE LAW.
Be it enacted by the General Assembly of the State of South Carolina:
Insurers providing coverage to persons who receive Medicaid
SECTION 1. Article 5, Chapter 7, Title 43 of the 1976 Code is amended by adding:
"Section 43-7-465. A health insurer, including a self-insured plan, group health plan as defined in Section 607(1) of the Employee Retirement Income Security Act of 1974, service-benefit plan, managed-care organization, pharmacy benefit manager, or another party that is legally responsible by statute, contract, or agreement for payment of a claim for a health care item or service, as a condition of doing business in this State, shall:
(1) provide, with respect to an individual eligible for or receiving medical assistance under the state plan, on request of the single state agency, information to determine during what period the individual or his spouse or dependent may be, or may have been, covered by a health insurer and the nature of coverage provided or that may have been provided by the insurer in a manner prescribed by the secretary of the United States Department of Health and Human Services or by the single state agency. This information must include the insured's name, address, and the plan's identifying number;
(2) accept the state's right of recovery and the assignment to the State of an individual or another entity's right to payment for a health care item or service for which payment was made under the state plan;
(3) respond to an inquiry by the State regarding a claim for payment for a health care item or service submitted within three years of the date the item or service was provided;
(4) agree not to deny a claim submitted by the State solely on the basis of the date the claim was submitted, the type or format of claim form, or a failure to present proper documentation at the point of sale that provides the basis of the claim if:
(a) the claim is submitted by the State within the three-year period beginning on the date on which the item or service was furnished; and
(b) an action by the State to enforce its right with respect to the claim is commenced within six years of the state's submission of the claim."
Definitions
SECTION 2. Section 43-7-410 of the 1976 Code, as last amended by Act 481 of 1994, is further amended to read:
"Section 43-7-410. (A) 'Applicant' means an individual whose written application for Medicaid has been submitted to the agency determining Medicaid eligibility, but has not received final action. This includes an individual, living or deceased, whose application is submitted by a representative or a person acting responsibly for the individual.
(B) 'Department' means the South Carolina Department of Health and Human Services.
(C) 'Medicaid' means the medical assistance program authorized by Title XIX of the Social Security Act and administered by the department.
(D) 'Person' means a natural person, company, association, partnership, corporation, or other legal entity.
(E) 'Practitioner' means a physician or other health care professional licensed under state law to practice his profession.
(F) 'Private insurer' means:
(1) a commercial insurance company offering health or casualty insurance to an individual or group, including an experienced-rated contract or indemnity contract;
(2) a profit or nonprofit prepaid plan offering either a medical service or full or partial payment for the diagnosis or treatment of an injury, disease, or disability;
(3) an organization administering a health or casualty insurance plan for a professional association, union, fraternal group, employer-employee benefit plan, or a similar organization offering these plans or services, including a self-insured or self-funded plan; or
(4) a group health plan, as defined in Section 607(1) of the Employee Retirement Income Security Act of 1974, a service benefit plan, or a health maintenance organization.
(G) 'Provider' means an individual, firm, corporation, association, institution, or other legal entity which is providing, or is approved to provide, medical assistance to a recipient pursuant to the State Medical Assistance Plan and consistent with Title XIX of the Social Security Act-Medical Assistance, also known as Medicaid.
(H) 'Recipient' means an individual determined to be eligible for a health service described in the State Medical Assistance Plan in accord with Title XIX of the Social Security Act-Medical Assistance, also known as Medicaid.
(I) 'Third party' means an individual, entity, or program that is or may be liable by contract, agreement, or statute, to pay all or part of the medical cost of injury, disease, or disability of an applicant or recipient."
Assignment of rights
SECTION 3. Section 43-7-420 of the 1976 Code is amended to read:
"Section 43-7-420. (A) An applicant or recipient, only to the extent of the amount of the medical assistance paid by Medicaid, is considered to have assigned his right to recover an amount paid by Medicaid from a third party or private insurer to the department. This assignment shall not include rights to Medicare benefits. The applicant or recipient shall cooperate fully with the department in its efforts to enforce its assignment rights. The receipt of medical assistance by an applicant or recipient shall create a rebuttable presumption that the applicant or recipient received information regarding the requirements for and the consequences of assigning his right to recover from a third party or private insurer either from the department, or in the case of an applicant or recipient qualified by the Social Security Administration under Section 1634 of the Social Security Act, from the Social Security Administration.
(B) An applicant's and recipient's determination of, and continued eligibility for, medical assistance under Medicaid is contingent on his cooperation with the department in its efforts to enforce its assignment rights. Cooperation includes, but is not limited to, reimbursing the department from proceeds or payments received by the applicant or recipient from a third party or private insurer.
(C) An applicant or recipient is considered to have authorized all persons, including insurance companies and providers of medical care, to release to the department information needed to enforce the assignment rights of the department."
Subrogation of rights to the department
SECTION 4. Section 43-7-430 of the 1976 Code is amended to read:
"Section 43-7-430. (A) The department automatically is subrogated, only to the extent of the amount of medical assistance paid by Medicaid, to the rights an applicant or recipient has to recover an amount paid by Medicaid from a third party or private insurer. The applicant or recipient shall cooperate fully with the department and shall do nothing after medical assistance is provided to prejudice the subrogation rights of the department.
(B) An applicant's and recipient's determination of, and continued eligibility for, medical assistance under Medicaid is contingent on his cooperation with the department in its efforts to enforce its subrogation rights. Cooperation includes, but is not limited to, reimbursing the department from proceeds or payments received by the recipient from a third party or private insurer.
(C) An applicant or recipient is considered to have authorized all persons, including insurance companies and providers of medical care, to release to the department information needed to enforce the subrogation rights of the department."
Enforcement and superiority of the department's subrogation rights
SECTION 5. Section 43-7-440 of the 1976 Code, as last amended by Act 481 of 1994, is further amended to read:
"Section 43-7-440. (A) The department, to enforce its assignment or subrogation rights, may:
(1) intervene or join in an action or proceeding brought by the applicant or recipient against a third party, or private insurer, in state or federal court;
(2) commence and prosecute legal proceedings against a third party or private insurer who may be liable to an applicant or recipient in state or federal court, either alone or in conjunction with the applicant or recipient, his guardian, personal representative of his estate, dependent, or survivor;
(3) commence and prosecute a legal proceeding against a third party or private insurer who may be liable to an applicant or recipient, or his guardian, personal representative of his estate, dependent, or survivor;
(4) commence and prosecute a legal proceeding against an applicant or recipient;
(5) settle and compromise an amount due to the department under its assignment and subrogation rights. A representative or attorney retained by an applicant or recipient shall not be considered liable to the department for improper settlement, compromise, or disbursement of funds unless he has written notice of the department's assignment and subrogation rights prior to disbursement of funds; or
(6) reduce an amount due to the department by twenty-five percent if the applicant or recipient has retained an attorney to pursue the applicant's or recipient's claim against a third party or private insurer, that amount to represent the department's share of attorney fees paid by the applicant or recipient. Additionally, the department may share in other costs of litigation by reducing the amount due it by a percentage of those costs, the percentage calculated by dividing the amount due the department by the total settlement received from the third party or private insurer. A representative or attorney retained by an applicant or recipient shall not be considered liable to the department for improper settlement, compromise, or disbursement of funds unless he has written notice by certified mail of the department's assignment and subrogation rights prior to disbursement of funds.
(B) A provider or practitioner who participates in the Medicaid program shall cooperate with the department in the identification of all third parties whom they have reason to believe may be liable to pay all or part of the medical costs of the injury, disease, or disability of an applicant or recipient.
(C) A provision in the contract of a private insurer issued or renewed after June 11, 1986, which denies or reduces benefits because of the eligibility of the insured to receive assistance under Medicaid, is void. In enrolling a person or in making payments for benefits to a person or on behalf of a person, a private insurer may not take into account that the person is eligible for or receives medical assistance under a State Plan for Medical Assistance pursuant to Title XIX of the Social Security Act.
(D) An assignment or subrogation right of the department is superior to any right of reimbursement, subrogation, or indemnity of a third party or recipient. A representative or attorney retained by an applicant or recipient shall not be considered liable to the department for improper settlement, compromise, or disbursement of funds unless he has written notice of the department's assignment and subrogation rights prior to disbursement of funds. Where a third party has a legal liability to make a payment for medical assistance to or on behalf of a person, the State is considered to have acquired the rights of the person to payment by another party for the health care items or services, to the extent that payment was made under a State Plan for Medical Assistance pursuant to Title XIX of the Social Security Act for a health care item or service furnished to the person."
Recovery from estates of Medicaid recipients for medical assistance paid
SECTION 6. Section 43-7-460 of the 1976 Code, as last amended by Act 93 of 1997, is further amended to read:
"Section 43-7-460. (A) The department shall seek recovery of medical assistance paid under the Title XIX State Plan for Medical Assistance from the estate of an individual who:
(1) at the time of death was an inpatient in a nursing facility, intermediate care facility for the mentally retarded, or other medical institution, if the individual is required, as a condition of receiving a service in the facility under the state plan, to spend for the cost of medical care all but a minimal amount of the person's income required for personal needs; or
(2) was fifty-five years of age or older when the individual received medical assistance, but only for medical assistance consisting of a nursing facility service, home and community-based service, hospital or prescription drug service provided to an individual or a nursing facility, or receiving a home and community-based service.
(B) Recovery under this section may be made only after the death of the decedent's surviving spouse, if one exists, and only at a time when the decedent has no surviving child under age twenty-one or no child who is blind or permanently and totally disabled as defined in Title XVI of the Social Security Act.
(C) Recovery under this section must be waived by the department upon proof of undue hardship, asserted by an heir or devisee of the property claimed pursuant to 42 U.S.C. 1396p(b)(3) and in accordance with the guidance issued by the Secretary of the United States Department of Health and Human Services in the State Medicaid Manual as incorporated into the state plan. The department shall publish and maintain such guidance on the department's web site.
(D) Recovery of a medical assistance payment under this section applies to medical assistance paid after June 30, 1994.
(E) A claim against an estate under this section has priority as established in Section 62-3-805(a)(2)(ii).
(F) For purposes of this section:
(1) 'Estate' means real property, personal property, and other assets included within the individual's estate as defined in Section 62-1-201(11).
(2) 'State plan' means Title XIX State Plan for Medical Assistance in effect at the decedent's death.
(3) 'Immediate family member' means a child, grandchild, parent, brother, or sister of the deceased.
(G) Notwithstanding subsection (A)(2) upon the enactment of an amendment to federal law which grants states the option to exempt home and community-based services or other noninstitutional Medicaid services from the estate recovery provisions mandated by Section 13612 of the federal Omnibus Budget Reconciliation Act of 1993, the department shall seek recovery of medical assistance paid under the Title XIX State Plan for Medical Assistance from the estate of an individual who:
(1) at the time of death was an inpatient in a nursing facility, intermediate care facility for the mentally retarded, or other medical institution if the individual is required, as a condition of receiving services in the facility under the state plan, to spend for costs of medical care all but a minimal amount of the person's income required for personal needs; or
(2) was fifty-five years of age or older when the individual received medical assistance but only for medical assistance consisting of nursing facility services."
Medical malpractice policy limits
SECTION 7. Section 38-79-130 of the 1976 Code is amended to read:
"Section 38-79-130. The association, pursuant to the provisions of this article and the approved plan of operation in respect to medical malpractice insurance, has the power on behalf of its members to:
(1) issue, or cause to be issued, policies of insurance to applicants including incidental coverages including, but not limited to, premises or operations liability coverage on the premises where services are rendered, all subject to limits of liability as specified in the plan of operation but not to exceed two hundred thousand dollars for each claim under one policy and six hundred thousand dollars for all claims under one policy in any one year; provided, however, that the association may offer policies up to one million dollars for each claim under one policy and three million dollars for all claims under one policy in any one year only upon approval of the board of the association and with the written concurrence of the Board of Governors of the South Carolina Patients' Compensation Fund;
(2) underwrite medical malpractice insurance and to adjust and pay losses with respect to it or to appoint service companies to perform those functions;
(3) cede and assume reinsurance."
Patients' Compensation Fund
SECTION 8. Section 38-79-420 of the 1976 Code, as last amended by Act 73 of 2003, is further amended to read:
"Section 38-79-420. There is created the South Carolina Patients' Compensation Fund (fund) for the purpose of paying that portion of a medical malpractice or general liability claim, settlement, or judgment which is in excess of two hundred thousand dollars for each incident or in excess of six hundred thousand dollars in the aggregate for one year, up to the amounts specified by the board pursuant to Section 38-79-430. The fund is liable only for payment of claims against licensed health care providers (providers) in compliance with the provisions of this article and includes reasonable and necessary expenses incurred in payment of claims and the fund's administrative expense."
Operation of the fund
SECTION 9. The second paragraph of Section 38-79-430 of the 1976 Code is amended to read:
"The board shall develop a plan of operation for the efficient administration of the fund consistent with the provisions of this article. The fund must operate pursuant to a plan of operation which provides for the economic, fair, and nondiscriminatory administration and for the prompt and efficient provision of excess medical malpractice insurance and which may contain other provisions including, but not limited to, assessment of all members for expenses, deficits, losses, commissions' arrangements, reasonable underwriting standards, acceptance and cession of reinsurance appointment of servicing carriers, and procedures for determining the amounts of insurance to be provided by the fund. The fund may not grant retroactive coverage to members. The plan of operation and any amendments to the plan are subject to the approval of the director or his designee. If the board fails to develop a plan of operation within the timeframe established by the Governor or his designee, the director or his designee shall develop the plan of operation for the fund."
Actions for damages for medical services rendered
SECTION 10. Section 38-79-480(3) of the 1976 Code is amended to read:
"(3) A person who has recovered a final judgment or a settlement approved by the board against a provider covered by the fund may file a claim with the board to recover that portion of the judgment or settlement which is in excess of two hundred thousand dollars for each incident or six hundred thousand dollars in the aggregate for one year, up to the amounts specified by the board pursuant to Section 38-79-430. If the fund incurs liability exceeding two hundred thousand dollars to any person under a single occurrence, the fund may not pay more than two hundred thousand dollars each year until the claim has been paid in full. However, the board may pay an amount in excess of two hundred thousand dollars so as to avoid the payment of interest."
Application of chapter
SECTION 11. Section 38-29-40(2) of the 1976 Code is amended by adding an item at the end to read:
"(d) A policy or contract or part of it to the extent that the assessments required by Section 38-29-80 with respect to the policy or contract are preempted by federal or state law."
Time effective
SECTION 12. This act takes effect upon approval by the Governor.
Ratified the 10th day of June, 2008.
Approved the 16th day of June, 2008.
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