(a) The department has a lien upon any sum that may be due to the recipient of medical assistance from a third-party payor. The lien is in the amount of the medical assistance paid for medical services under this title, together with reasonable attorney fees and litigation costs incurred in the enforcement of the lien.

(b) A lien against a sum due from a third-party payor for medical services provided to a recipient of medical assistance under this title attaches and is effective upon filing with a recorder's office in any recording district in the state. However, a lien filed under this subsection is not perfected and has no effect unless notice of filing of the lien is served by the department upon the third-party payor, personally or by registered, certified, or insured mail, return receipt requested.

(c) If a recipient of medical assistance under this title settles a claim or obtains an award or judgment arising from the injury or illness for which the medical assistance was received, the amount of the lien to which the department is entitled under (a) of this section shall be reduced by a pro rata share of the attorney fees and litigation costs. Regardless of the manner in which the amount of the attorney fees is derived in the particular case, the pro rata reduction of the lien shall be calculated in accordance with the applicable rules of court governing the award of attorney fees in civil matters.

(d) A perfected lien under this section has priority over all other liens except tax liens and a lien perfected for attorney fees and costs.