49.89 Third party liability.

(1) Definition. In this section, “insurer" includes a sponsor, other than an insurer, that contracts to provide health care services to members of a group.

(2) Subrogation. The department of health services, the department of children and families, a county, or an elected tribal governing body that provides any public assistance under this chapter or under s. 253.05 as a result of the occurrence of an injury, sickness, or death that creates a claim or cause of action, whether in tort or contract, on the part of a public assistance recipient or beneficiary or the estate of a recipient or beneficiary against a 3rd party, including an insurer, is subrogated to the rights of the recipient, beneficiary or estate and may make a claim or maintain an action or intervene in a claim or action by the recipient, beneficiary, or estate against the 3rd party. Subrogation under this subsection because of the provision of medical assistance under subch. IV constitutes a lien, equal to the amount of the medical assistance provided as a result of the injury, sickness, or death that gave rise to the claim. The lien is on any payment resulting from a judgment or settlement that may be due the obligor. A lien under this subsection continues until it is released and discharged by the department of health services.

(3) Assignment of actions. By applying for assistance under this chapter or under s. 253.05, an applicant assigns to the state department, the county department or the tribal governing body that provided the assistance the right to make a claim to recover an indemnity from a 3rd party, including an insurer, if the assistance is provided as a result of the occurrence of injury, sickness or death that results in a possible recovery of an indemnity from the 3rd party.

(3m) Notice requirements.

(a) An attorney retained to represent a current or former recipient of assistance under this chapter, or the recipient's estate, in asserting a claim that is subrogated under sub. (2) or assigned under sub. (3) shall provide notice under par. (c).

(b) If no attorney is retained to represent a current or former recipient of assistance under this chapter, or the recipient's estate, in asserting a claim that is subrogated under sub. (2) or assigned under sub. (3), the current or former recipient or his or her guardian or, if the recipient is deceased, the personal representative of the recipient's estate, shall provide notice under par. (c).

(bm) A person against whom a claim that is subrogated under sub. (2) or assigned under sub. (3) is made, or that person's attorney or insurer, shall provide notice under par. (c), if that person, attorney or insurer knows, or could reasonably determine, that the claimant is a recipient or former recipient of medical assistance under subch. IV, or is the estate of a former recipient of medical assistance under subch. IV.

(c) If a person is required to provide notice under this paragraph, the person shall provide notice by certified mail to the department that provided the assistance as soon as practicable after the occurrence of each of the following events for a claim under par. (a) or (b):

1. The filing of the action asserting the claim.

2. Intervention in the action asserting the claim.

3. Consolidation of the action asserting the claim.

4. An award or settlement of all or part of the claim.

(4) Control of action. The applicant or recipient or any party having a right under this section may make a claim against the 3rd party or may commence an action and shall join the other party as provided under s. 803.03 (2). Each shall have an equal voice in the prosecution of such claim or action.

(5) Recovery; how computed. Reasonable costs of collection including attorney fees shall be deducted first. The amount of assistance granted as a result of the occurrence of the injury, sickness or death shall be deducted next and the remainder shall be paid to the public assistance recipient or other party entitled to payment.

(6) Departments' duties and powers. The department of health services and the department of children and families shall enforce their rights under this section and may contract for the recovery of any claim or right of indemnity arising under this section.

(7) Payments to local units of government.

(a) Except as provided in par. (f), any county or elected tribal governing body that has made a recovery under this section shall receive an incentive payment from the sum recovered as provided under this subsection.

(b) The incentive payment shall be an amount equal to 15 percent of the amount recovered because of benefits paid under s. 49.46, 49.465, 49.468, 49.47, or 49.471. The incentive payment shall be taken from the federal share of the sum recovered as provided under 42 CFR 433.153 and 433.154.

(bm) The incentive payment shall be an amount equal to 15 percent of the amount recovered because of benefits paid as state supplemental payments under s. 49.77. The incentive payment shall be taken from the state share of the sum recovered.

(c) The incentive payment shall be an amount equal to 15 percent of the amount recovered because of benefits paid under s. 49.20, 1997 stats., or s. 49.19, 49.785, or 253.05. The incentive payment shall be taken from the state share of the sum recovered, except that the incentive payment for an amount recovered because of benefits paid under s. 49.19 shall be considered an administrative cost under s. 49.19 for the purpose of claiming federal funding.

(d)

1. Any county or elected tribal governing body that has made a recovery under this section for which it is eligible to receive an incentive payment under par. (b) or (bm) shall report such recovery to the department of health services within 30 days after the end of the month in which the recovery is made in a manner specified by the department of health services.

2. Any county or elected tribal governing body that has made a recovery under this section for which it is eligible to receive an incentive payment under par. (c) shall report such recovery to the department of children and families within 30 days after the end of the month in which the recovery is made in a manner specified by the department of children and families.

(e) The amount of the recovery remaining after payments are made under pars. (b) to (c) shall be deposited in the state treasury and credited to the appropriation from which the assistance was originally paid.

(f) The amount of any incentive payment to which Milwaukee County would otherwise be entitled under this subsection for a recovery under this section due to the efforts of an employee or officer of the department of health services, or a county employee or officer under the management of the department of health services, shall be credited to the appropriation account under s. 20.435 (4) (im).

(8) Welfare claims not prejudiced by recipient's release.

(a) No person who has or may have a claim or cause of action in tort or contract and who has received assistance under this chapter or under s. 253.05 as a result of the occurrence that creates the claim or cause of action may release the liable party or the liable party's insurer from liability to the units of government specified in sub. (2). Any payment to a beneficiary or recipient of assistance under this chapter or under s. 253.05 in consideration of a release from liability is evidence of the payer's liability to the unit of government that granted the assistance.

(b) Liability under par. (a) is to the extent of assistance payments under this chapter or under s. 253.05 resulting from the occurrence creating the claim or cause of action, but not in excess of any insurance policy limits, counting payments made to the injured person. The unit of government administering assistance shall include in its claim any assistance paid to or on behalf of dependents of the injured person, to the extent that eligibility for assistance resulted from the occurrence creating the claim or cause of action.

(9) Powers of health maintenance organizations. A health maintenance organization or other prepaid health care plan has the powers of the department of health services under subs. (2) to (5) to recover the costs which the organization or plan incurs in treating an individual if all of the following circumstances are present:

(a) The costs result from an occurrence of an injury or sickness of an individual who is a recipient of medical assistance.

(b) The occurrence of the injury or sickness creates a claim or cause of action on the part of the recipient or the estate of the recipient.

(c) The medical costs are incurred during a period for which the department of health services pays a capitation or enrollment fee for the recipient.

History: 1977 c. 29; 1979 c. 221; 1981 c. 20; 1983 a. 27, 465; 1985 a. 29 ss. 1051, 1052, 3200 (23); 1987 a. 27 s. 3202 (24); 1989 a. 31; 1995 a. 27 ss. 3152 to 3177, 3214, 3215, 9126 (19), 9130 (4); Stats. 1995 s. 49.89; 1995 a. 407; 1997 a. 3; 1999 a. 9; 2007 a. 20 ss. 1750 to 1753, 9121 (6) (a); 2007 a. 96; 2009 a. 15.

Counties were entitled to be reimbursed for medical assistance from insurance settlements obtained by accident victims despite the fact that neither victim had been fully compensated. Waukesha County v. Johnson, 107 Wis. 2d 155, 320 N.W.2d 1 (Ct. App. 1982).

A county could recoup medical assistance payments from a recipient who was minor. Perkins v. Utnehmer, 122 Wis. 2d 497, 361 N.W.2d 739 (Ct. App. 1984).

This section, not s. 49.45 (19) (a) 2., specifically addresses the assignment of actions and subrogation of rights by a public assistance recipient who is injured and has a tort claim against a 3rd party. Ellsworth v. Schelbrock, 2000 WI 63, 235 Wis. 2d 678, 611 N.W.2d 764, 98-0294.

Attorney's fees are not chargeable against public assistance recovered in an action under this section. 70 Atty. Gen. 61.

An Arkansas law that automatically imposed a lien on tort settlements in an amount equal to the state's Medicaid's costs incurred on behalf of the settlement recipient, including settlement proceeds meant to compensate the recipient for damages distinct from medical costs like pain and suffering, lost wages, and loss of future earnings contravened federal law and was therefore unenforceable. A state cannot lay claim to more than the portion of the settlement that represents medical expenses. Arkansas Dept. of Health and Human Services v. Ahlborn, 547 U.S. 268, 164 L. Ed. 2d 459, 126 S. Ct. 1752 (2006).