1. When a recipient of Medicaid or a recipient of insurance provided pursuant to the Children’s Health Insurance Program incurs an illness or injury for which medical services are payable by the Department and which is incurred under circumstances creating a legal liability in some person other than the recipient or a division of the Department to pay all or part of the costs of such medical services, the Department is subrogated to the right of the recipient to the extent of all such medical costs and may join or intervene in any action by the recipient or any successors in interest to enforce such legal liability.

2. If a recipient or any successors in interest fail or refuse to commence an action to enforce the legal liability, the Department may commence an independent action, after notice to the recipient or successors in interest, to recover all medical costs to which it is entitled. In any such action by the Department, the recipient or successors in interest may be joined as third-party defendants.

3. In any case where the Department is subrogated to the rights of the recipient or any successors in interest as provided in subsection 1, the Department has a lien upon the proceeds of any recovery from the persons liable, whether the proceeds of the recovery are by way of judgment, settlement or otherwise. Such a lien must be satisfied in full, unless reduced pursuant to subsection 4, at such time as:

(a) The proceeds of any recovery or settlement are distributed to or on behalf of the recipient, the successors in interest or the attorney of the recipient; and

(b) A dismissal by any court of any action brought to enforce the legal liability established by subsection 1.

4. If the Department receives notice pursuant to NRS 422.293001, the Director or a representative designated by the Director may, in consideration of the legal services provided by an attorney to procure a recovery for the recipient, reduce the lien on the proceeds of any recovery.

5. The attorney of a recipient shall not condition the amount of attorney’s fees or impose additional attorney’s fees based on whether a reduction of the lien is authorized by the Director or a designated representative pursuant to subsection 4.

(Added to NRS by 1981, 1909; A 1989, 757; 1993, 923; 1997, 1239, 2624; 1999, 2228, 2242; 2007, 2390)