House Bill NO. 1195

By Senator(s) Committee

SECTION 1. The following shall be codified as Section 25-15-107, Mississippi Code of 1972:

25-15-107. With regard to any self-insured and pooled risks health insurance plans authorized under Section 25-15-101:

(a) If medical assistance is provided to an employee or dependent under this article for injuries, disease or sickness caused under circumstances creating a cause of action in favor of the employee or eligible dependent against any person, firm or corporation, then the political subdivision or its designees shall be entitled to recover all proceeds that may result from the exercise of any rights of recovery which the employee or dependent may have against any such person, firm or corporation to the extent of the actual amount of the medical payments made by the plan on behalf of the employee or dependent. However, any benefits received by the employee or the dependent from uninsured motorist insurance coverage are exempted from the subrogation rights of the political subdivision provided herein. The employee or dependent shall execute and deliver instruments and papers to do whatever is necessary to secure such rights and shall do nothing after the medical assistance is provided to prejudice the subrogation rights of the political subdivision. The political subdivision or its designee may compromise or settle any such claim and execute a release of any claim it has by virtue of this section.

(b) The acceptance of medical assistance under this article or making of a claim thereunder shall not affect the right of the employee, dependent or his legal representative to recover the medical assistance payments made by the plan as an element of special or general damages in any action at law or as part of any settlement in favor of the employee or eligible dependent against any person, firm or corporation. However, if an action at law is pursued, a copy of the pleadings shall be mailed certified to the political subdivision or its designee at the time of the institution of suit, and proof of such notice shall be filed of record in such action. The political subdivision, at any time before the trial on the facts, may join in such action or may intervene therein. Any amount recovered by an employee, dependent or legal representative through settlement or an action at law shall be applied in the following order:

(i) The reasonable cost of the collection incurred by the plan or its designee, including attorney's fees.

(ii) The remainder of the recovery shall be divided equally between the employee, dependent or legal representative and the plan, subject to recovery of the maximum expenditure by the plan.

(c) No compromise of any claim by the employee, dependent or his legal representative shall be binding upon or affect the rights of the political subdivision against the third party unless the political subdivision or its designee has entered into the compromise. Any compromise effected by the employee, dependent or legal representative with the third party in the absence of advance notification to and approval by the political subdivision or its designee shall constitute conclusive evidence of the liability of the third party, and the political subdivision or its designee in litigating its claim against the third party shall be required only to prove the amount and correctness of its claim relating to such injury, disease or sickness. It is further provided that should the employee, dependent or his legal representative fail to notify the political subdivision or its designee of the institution of legal proceedings against a third party for which the political subdivision has a cause of action, the facts relating to negligence and the liability of the third party, if judgment is rendered for the employee or dependent, shall constitute conclusive evidence of liability in a subsequent action maintained by the political subdivision or its designee and only the amount and correctness of the political subdivision's claim relating to the injuries, disease or sickness shall be tried before the court. The political subdivision shall be authorized in bringing such action against the third party and his insurer jointly or against the insurer alone.

(d) The third party or insurer of the third party may inquire directly with the political subdivision, or its designee, on the status or existence of any relevant subrogation lien.

(e) Nothing herein shall be construed to diminish or otherwise restrict the subrogation right of the political subdivision against a third party for medical assistance paid by the plan on behalf of the employee or dependent as a result of injuries, disease or sickness caused under circumstances creating a cause of action in favor of the employee or dependent against such a third party.

SECTION 2. This act shall take effect and be in force retroactively from and after March 18, 1999.

AN ACT TO CREATE A NEW CODE SECTION TO BE CODIFIED AS SECTION 25-15-107, MISSISSIPPI CODE OF 1972, TO PROVIDE SUBROGATION RIGHTS UNDER SELF-INSURED AND POOLED RISKS HEALTH INSURANCE PLANS FOR POLITICAL SUBDIVISIONS OF THE STATE; TO EXEMPT THE BENEFITS OF ANY UNINSURED MOTORIST INSURANCE COVERAGE FROM THE SUBROGATION RIGHTS PROVIDED IN THIS ACT; AND FOR RELATED PURPOSES.