Opinion
No. UWY X01 CV08 5012640S
August 21, 2009
MEMORANDUM OF DECISION RE CROSS MOTIONS FOR SUMMARY JUDGMENT, #108 — PLAINTIFFS' MOTION: #111-DEFENDANT'S MOTION
I BACKSTORY
This is a putative class action alleging that the defendant, Health Net of the Northeast, Inc. ("Health Net"), violated Connecticut law by seeking recovery of medical benefit payments stemming from personal injuries sustained by its medicaid managed care enrollees who sued third-party tortfeasors for damages, including the cost of their medical care.
According to the defendant, Health Net of the Northeast, Inc. does not issue health plans or administer health plans in Connecticut. The defendant asserts that Health Net of Connecticut, Inc., a subsidiary of Health Net of the Northeast, Inc., is the entity that provided the plaintiffs with their benefits as per the terms of their respective health plans. In the joint stipulation of facts, the parties stipulated that Health Net of the Northeast, Inc., directly and through its predecessors, were parties to a contract regarding the administration of the Medicaid managed care program ("MMC contract").
As set forth below in the parties' joint statement of facts, the defendant, directly and through its predecessors, is a health care insurer. Pursuant to a contract with the state of Connecticut, the defendant operated a Health Maintenance Organization ("HMO") for the benefit of certain medicaid recipients, including the plaintiffs. When these plaintiffs suffered injury as a result of negligence of third parties, the defendant paid for the medical care required. Then, when recoveries were made by the plaintiffs against the responsible third parties, the defendant sought reimbursement for all related medical care it had provided. The plaintiffs dispute any reimbursement claim asserted by the defendant.
The plaintiffs filed a four-count amended complaint (operative complaint) on March 9, 2009. Count one does not have a caption, count two sounds in breach of duty of good faith and fair dealing, count three sounds in conversion, and count four is captioned declaratory judgment.
The plaintiffs, inter alia, seek a declaration of their rights and obligations with regard to reimbursing the defendant for medical expenses that the defendant paid.
II JOURNEY OF THE PLEADINGS
On June 15, 2009, the defendant and the plaintiffs filed separate motions for summary judgment accompanied by memoranda in support. The plaintiffs moved for summary judgment on their declaratory judgment count on the ground that "there is no statutory authority for the defendant to claim reimbursement against these settlements for monies paid out by it for the plaintiff[s'] healthcare." It is the plaintiffs' position that General Statutes § 52-225c, the anti-subrogation law, should be enforced to prohibit healthcare insurers from seeking such reimbursement. The defendant moved for summary judgment on the declaratory judgment count on the ground that "Connecticut law provides the Department of Social Services ("DSS") with an assignable right to seek recovery of medical benefits paid on behalf of medicaid managed care enrollees." Also on June 15, 2009, the defendant and plaintiffs filed a joint statement of stipulated facts. The plaintiffs filed an objection to the defendant's motion for summary judgment on June 18, 2009, and the defendant filed an objection to the plaintiffs' motion for summary judgment on July 1, 2009. Oral argument took place on July 13, 2009, and the parties, in response to an inquiry from the court, submitted supplementary briefs after oral argument.
III PARTIES' JOINT STATEMENT OF STIPULATED FACTS A The Medicaid Managed Care Program 1 Federal Statutory Framework
a. The medicaid act creates a cooperative federal-state program to provide federal financial assistance to states that choose to reimburse the costs of medical care for the economically disadvantaged. 42 U.S.C. § 1396 et seq.
b. Each state that receives federal medicaid funds must designate a single state agency to administer or supervise its state medicaid plan. 42 U.S.C. § 1396a(a)(5); 42 C.F.R. § 431.10.
c. The medicaid Act allows states to engage contractors, including managed care organizations, to provide or arrange for services under a state medicaid plan. 42 U.S.C. § 1396u-2. This system is referred to as "Medicaid Managed Care."
2 Connecticut Statutory Framework
d. The state of Connecticut is authorized to participate in the medicaid program under General Statutes §§ 4-8, 17b-2 and 17b-28.
e. The department of social services ("DSS") is the single state agency responsible for the administration of medicaid in the state of Connecticut. General Statutes §§ 17b-2(8) and 17b-26.
f. To further the goals of expanding medical coverage and access to care, making state healthcare spending more efficient and reducing uncompensated care, the Connecticut legislature authorized DSS to award "contracts for medicaid managed care health plans." General Statutes § 17b-28b.
g. From 1995 to 2008, DSS and Health Net, directly and through its predecessors, were parties to a contract regarding the administration of the medicaid managed care program (the "MMC contract"). The contract forms contained provisions relating to third-party coverage.
3 Recovery in the Medicaid Managed Care Context
h. A state electing to participate in the medicaid program must meet seventy-three requirements relating to the operation of its proposed medical assistance program. 42 U.S.C. § 1396a(a)(1) to (73). 42 U.S.C. § 1396a(25) provides in relevant part "(A) that the State or local agency administering such plan will take all reasonable measures to ascertain the legal liability of third parties . . . that are . . . legally responsible for payment of a claim . . . for care and services available under the plan . . ."(B) that in any case where such a legal liability is found to exist after medical assistance has been made available on behalf of the individual and where the amount of reimbursement the State can reasonably expect to recover exceeds the costs of such recovery, the State or local agency will seek reimbursement for such assistance to the extent of such legal liability . . .
* * *
"(H) that to the extent that payment has been made under the State plan for medical assistance in any case where a third party has a legal liability to make payment for such assistance, the State has in effect laws under which, to the extent that payment has been made under the State plan for medical assistance for health care items or services furnished to an individual, the State is considered to have acquired the rights of such individual to payment by any other party for such health care items or services."
i. General Statutes § 17b-265(a) addresses DSS's authority to seek recovery with respect to medicaid managed care enrollees.
4 Relevant Terms of MMC Contract between DSS and Health Net
j. The third-party coverage provision of the MMC contract stated that "[t]he Department hereby assigns to [Health Net] all rights to third party recoveries from Medicare, health insurance, casualty insurance, workers' compensation, tortfeasors, or any other third parties who may be responsible for payment of medical costs for [Health Net's medicaid] members." (MMC Contract § 3.41(a).)
k. The MMC contract set forth recordkeeping obligations, information sharing provisions, and limited Health Net's right to recovery to the amount that Health Net paid toward the cost of the member's care. (MMC contract § 3.41(a)(6), (b) and (c).)
1. The MMC contract required Health Net to make every reasonable effort to determine the legal liability of third parties for health care services provided to medicaid enrollees and to "pursue, collect, and retain any monies from third party payers for services to [Health Net's] members under this contract . . ." (MMC contract § 3.41.)
m. The MMC contract provided that Health Net "may assign the right of recovery to [its] subcontractors and/or network providers." (MMC contract § 3.41(a)(2).)
5
CT Page 14147
Health Net Subcontracted with Rawlings
n. At all times relevant to this lawsuit, Health Net contracted with The Rawlings Company, LLC ("Rawlings") for Rawlings to undertake responsibility to pursue recoveries for the cost of medical treatment provided to Health Net members under its medicaid plan in instances where there was potential third-party liability to pay such costs.o. Rawlings generally initiated recovery efforts when Rawlings learned that a Health Net member was injured by a third party. Rawlings typically would notify the member (or, if represented, the member's counsel) that Health Net had a right to recovery of medical expenses paid on the member's behalf. Rawlings typically would notify the third party as well.
p. Rawlings was responsible for negotiating the amount of recovery to be paid out of the member's settlement or award to satisfy Health Net's lien. The result of the negotiation process could vary from full recovery of the lien amount, to partial recovery, or no recovery at all.
B Health Net and the Plaintiffs
q. At all times relevant to this lawsuit, the plaintiffs, Amy Rathbun and Tanequa Brayboy were members of Health Net's "Healthy Options" Medicaid managed care plan.
1 Amy Rathbun
r. In 2006, Rathbun was a member of and eligible to receive healthcare benefits through the Healthy Options plan.
s. On July 24, 2006, Rathbun was involved in a motor vehicle accident that caused her to suffer personal injuries requiring medical treatment.
t. From July 24, 2006 through April 12, 2007, Rathbun received hospital and medical treatments for her injuries related to the motor vehicle accident.
u. In connection with such treatments, Health Net paid a total of $2,982.93 for the cost of Rathbun's medical care.
v. Rathbun retained legal counsel to pursue potential tort claims against the driver of the other car involved in the motor vehicle accident.
w. By letter dated February 28, 2007, Rawlings notified Rathbun's counsel that Health Net had a claim for repayment of medical benefits paid on behalf of Rathbun in connection with the motor vehicle accident.
x. In the February 28, 2007 letter, Rawlings further notified Rathbun's counsel that no settlement or compromise of any claim by Rathbun against the tortfeasor should occur without prior notice to and agreement by Rawlings regarding the satisfaction of Health Net's lien amount.
y. By letter dated April 9, 2008, USAA Casualty Insurance Company (USAA), the insurer for the tortfeasor involved in the motor vehicle accident with Rathbun, requested that Rawlings provide documentation to support Health Net's legal right to recovery of benefits paid under the Healthy Options medicaid managed care plan.
z. By letter dated April 18, 2008, Rawlings responded to USAA's request. In this letter, Rawlings stated that the Healthy Options plan "is a Medicaid plan administered, on behalf of the state of Connecticut, by [Health Net]."
aa. By letter dated June 4, 2008, Rawlings wrote to Rathbun's personal injury counsel regarding the basis for Health Net's claim.
bb. Rathbun's counsel sent a check for the total sum of $2,982.93 in satisfaction of the lien for payments made under the Healthy Options plan for Rathbun's medical treatment.
2 Tanequa Brayboy
cc. In 2007, Kay' Anah Brayboy (Kay' Anah), Brayboy's minor child, was a member of and eligible to receive healthcare benefits through the Healthy Options plan.
dd. On July 4, 2007, Kay' Anah was struck by a motor vehicle.
ee. Kay' Anah suffered serious injuries, for which she received hospital and medical treatment. Kay' Anah subsequently died as a result of her injuries.
ff. Health Net paid a total of $13,541.45 for the cost of Kay' Anah's medical care relating to the accident.
gg. Brayboy retained legal counsel to pursue potential tort claims against the driver of the vehicle that struck Kay' Anah.
hh. By letter dated November 20, 2007, Rawlings notified counsel for Brayboy that Health Net had a claim for repayment of medical benefits paid on behalf of Kay' Anah in connection with this incident.
ii. On or about March 7, 2008, Rawlings was notified that Brayboy had retained new counsel in the personal injury action.
jj. Rawlings subsequently reissued its notice of lien/claim letter and directed it to the attention of Brayboy's new counsel.
kk. Brayboy's counsel subsequently asked Rawlings for information as to the structure and design of the Healthy Options medicaid managed care plan.
ll. By letter dated April 8, 2008, Rawlings responded to counsel's inquiry. Rawlings informed him that the Healthy Options plan was a medicaid managed care plan offered through the state of Connecticut, which plan was administered by Health Net.
mm. By letter dated April 14, 2008, Brayboy's counsel took the position on behalf of his client that he would not engage in communication with Rawlings regarding Health Net's medical lien claim absent some proof of statutory authority under Connecticut law to assert such lien and evidence of a contractual assignment from the state of Connecticut to Health Net.
nn. By letter dated April 18, 2008, in-house counsel at Rawlings wrote to Brayboy's counsel to provide statutory authority supporting the right to assert a lien for medical payments made under the medicaid program.
oo. To date, the lien asserted for the cost of medical benefits provided to Brayboy has not been paid.
IV DISCUSSION A
CT Page 14150
SUMMARY JUDGMENT STANDARD AND STATUTORY INTERPRETATION
"Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party . . . The party moving for summary judgment has the burden of showing the absence of any genuine issue of material fact and that the party is, therefore, entitled to judgment as a matter of law . . ." (Internal quotation marks omitted.) Aspetuck Valley Country Club v. Weston, 292 Conn. 817, 822 (2009)."The process of statutory interpretation involves the determination of the meaning of the statutory language as applied to the facts of the case, including the question of whether the language does so apply . . .
"When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature . . . In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does so apply . . ." (Citation omitted; internal quotation marks omitted.) Alvord Investment, LLC v. Zoning Board of Appeals, 282 Conn. 393, 401-02, 920 A.2d 1000 (2007).
"[The] interpretation of federal and state statutes is guided by the plain meaning rule. See, e.g., Cambodian Buddhist Society of Connecticut, Inc. v. Planning Zoning Commission, 285 Conn. 381, 400-01, 941 A.2d 868 (2008) (`With respect to the construction and application of federal statutes, principles of comity and consistency require us to follow the plain meaning rule for the interpretation of federal statutes because that is the rule of construction utilized by the United States Court of Appeals for the Second Circuit . . . If the meaning of the text is not plain, however, we must look to the statute as a whole and construct an interpretation that comports with its primary purpose and does not lead to anomalous or unreasonable results.' . . .); Alvord Investment, LLC v. Zoning Board of Appeals, supra, 282 Conn. 402 (`In seeking to determine that meaning, General Statutes § 1-2z directs us first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extra-textual evidence of the meaning of the statute shall not be considered.' . . ." State v. Peters, 287 Conn. 82, 88, CT Page 14151 946 A.2d 1231 (2008).
B MEDICAID
"The [medicaid] program, which was established in 1965 as Title XIX of the Social Security Act and is codified at 42 U.S.C. § 1396 et seq. (medicaid act), is a joint federal-state venture providing financial assistance to persons whose income and resources are inadequate to meet the costs of [medical care] . . . The federal government shares the costs of medicaid with those states that elect to participate in the program, and, in return, the states are required to comply with requirements imposed by the medicaid act and by the secretary of the Department of Health and Human Services [secretary]. Specifically, participating states are required to "develop a plan, approved by the secretary of health and human services, containing reasonable standards . . . for determining eligibility for and the extent of medical assistance" to be provided . . . [S]ee . . . 42 U.S.C. § 1396a(a)(17)." Skindzier v. Commissioner of Social Services, 258 Conn. 642, 648, 784 A.2d 323 (2001). See also 42 U.S.C. § 1396 et seq.; 42 C.F.R. § 430.00; Arkansas Dept. of Health Human Services v. Ahlborn, 547 U.S. 268, 275-76, 126 S.Ct. 1752, 164 L.Ed.2d 459 (2006).
Under the program, the federal government pays between 50 percent and 83 percent of the cost of patient care incurred by a state, as determined by a formula keyed to each state's per capita income. See 42 U.S.C. § 1396d(b). All fifty states participate in the medicaid program. Arkansas Dept. of Health Human Services v. Ahlborn, supra, 547 U.S. 275.
Congress has charged the secretary with administering the federal medicaid program, including reviewing and approving state plans and operations, and has vested the secretary with "extremely broad regulatory authority" to implement the requirements of the medicaid act. Wisconsin Dept. of Health Family Services v. Blumer, 534 U.S. 473, 496 n. 13, 122 S.Ct. 962, 151 L.Ed.2d 935 (2002). The secretary exercises his authority though the Centers for Medicare and Medicaid Services (formerly the Health Care Financing Administration). See 66 Fed. Reg. 35, 437 (2001).
At times, an individual's need for medicaid arises from circumstances that render third parties liable for the costs of the beneficiary's medical care. Potentially responsible third parties include tortfeasors, insurance companies, employee health benefit plans, and noncustodial parents. See 42 C.F.R. §§ 433.136 and 433.138. In order to preserve medicaid's role as the payer of last resort and to maximize the amount of assistance available for all qualifying individuals, the medicaid statute requires participating states to "take all reasonable measures to ascertain the legal liability of third parties . . . to pay for care and services" provided by medicaid. 42 U.S.C. § 1396a(a)(25)(A). Each state's plan also must specify how it will pursue third-party liability claims. 42 U.S.C. § 1396a(a)(25)(A)(ii). That plan must include provisions for the collection of "sufficient information" to enable the state to pursue third-party claims any time a beneficiary's eligibility for medical assistance is established or redetermined. 42 U.S.C. § 1396a(a)(25)(A)(i).
In addition, the state must enact "laws under which . . . the state is considered to have acquired the rights of such individual to payment by any other party for such health care items or services." 42 U.S.C. § 1396a(a)(25)(H). Each state's medicaid plan also must require, as "a condition of eligibility," that recipients "assign the state any rights to payment for medical care from any third party." 42 U.S.C. § 1396k(a)(1)(A). See also 42 U.S.C. § 1396a(a)(45); General Statutes § 17b-265(a). The state likewise must require medicaid beneficiaries "to cooperate with the State in identifying, and providing information to assist the State in pursuing, any third party who may be liable to pay for care and services available under the plan, unless such individual has good cause for refusing to cooperate . . ." 42 U.S.C. § 1396k(a)(1)(C). See also C.F.R. § 433.145(a)(3). As an "[essential]" part of such cooperation; 42 C.F.R. § 433.147(a)(b); the state can require beneficiaries to "[p]ay to the agency any support or medical care funds received that are covered by the assignment of rights." 42 C.F.R. § 433.147(b)(4).
Once potential third-party liability for medical care and services is identified, the state must "seek reimbursement for [its] assistance to the extent of such legal liability." 42 U.S.C. § 1396a(a)(25)(B). With respect to any money collected by the state following an assignment, the medicaid statute accords priority to the state's claim for reimbursement by directing the state to "[retain]" "[s]uch part of any amount collected . . . as is necessary to reimburse it for medical assistance payments made." 42 U.S.C. 1396k(b). See also 42 C.F.R. § 433.154. The state, in turn, must reimburse the federal government for its share of the payments. 42 U.S.C. 1396k(b). See also 42 C.F.R. § 433.154. Only then will "the remainder of such amount collected" be paid to the beneficiary. 42 C.F.R. § 433.154. The secretary has promulgated regulations that implement medicaid's third-party liability provisions. See 42 C.F.R. § 433.135 et seq.
The medicaid statute separately provides that "[n]o lien may be imposed against the property of any individual prior to his death on account of medical assistance paid or to be paid on his behalf under the State plan." 42 U.S.C. 1396p(a)(1). An exception is made for liens imposed "pursuant to the judgment of a court on account of benefits incorrectly paid on behalf of such individual." 42 U.S.C. 1396p(a)(1)(A).
"The state of Connecticut has elected to participate in the medicaid program, and, therefore, is obligated to comply with federal requirements. See General Statutes §§ 17b-2(8) and 17b-260; see also Arkansas Dept. of Health Human Services v. Ahlborn, [ supra, 547 U.S. 275-78]; Schweiker v. Gray Panthers, 453 U.S. 34, 37, 101 S.Ct. 2633, 69 L.Ed.2d 460 (1981)." State v. Peters, supra 287 Conn. 91-92.
C ISSUES PRESENTED
1. Whether the medicaid third-party liability statute, which provides DSS with a statutory recovery right, also allows DSS to assign that statutory right to Health Net.
2. Whether Health Net is required to bring its own action against a third-party tortfeasor to seek recovery of medical costs incurred on behalf of the enrollee.
3. Whether and to what extent Health Net has a right to seek recovery from the proceeds of personal injury settlements or awards obtained by medicaid managed care enrollees for the medical costs incurred on behalf of the enrollee.
1. Assignment
General Statutes § 17b-265(a) provides in relevant part that DSS "shall be subrogated to any right of recovery or indemnification which an applicant or recipient of medical assistance or any legally liable relative has against a private insurer or other third party . . ." General Statutes § 17b-265(a) specifically addresses recovery rights in the context of Medicaid managed care plans and provides in relevant part: "In the case of such a recipient who is an enrollee in a managed care organization under a Medicaid managed care contract with the state or a legally liable relative of such enrollee, the department shall be subrogated to any right of recovery or indemnification which the enrollee or legally liable relative has against such a private insurer or other third party for the medical costs incurred by the managed care organization on behalf of an enrollee."
Further, General Statutes § 17b-265(b) provides in relevant part: "The Department of Social Services may assign its right to subrogation or entitlement to benefits to a designee or a health care provider participating in the Medicaid program and providing services to an applicant or recipient, in order to assist the provider in obtaining payment for such services."
In Peters, the defendants argued that federal law required the state to directly pursue third parties for reimbursement of medicaid funds paid. State v. Peters, supra, 287 Conn. 86-87. The Supreme Court in State v. Peters, supra, 287 Conn. 92-97 stated: "[To comply with federal law], the [Connecticut] legislature has adopted a statutory scheme that provides three ways for the state to seek reimbursement of medicaid funds paid to recipients, namely, by an assignment of rights, a right of subrogation and a lien. General Statutes (Sup. 2008) § 17b-265 requires that medicaid recipients in Connecticut, as a condition of eligibility, assign to the state the right to reimbursement from third parties for medical expenses. Under § 17b-265, the department of social services is subrogated to any right of recovery that a recipient has against a third party for reimbursement. Sections 17b-93 and 17b-94 provide that the state may assert a lien to effectuate the state's reimbursement of medicaid funds. Thus, to obtain reimbursement when a third party is liable for a recipient's medical expenses that the state has paid, the state may pursue those claims against the third party directly pursuant to the assignment and subrogation scheme or, alternatively, indirectly by placing a lien on personal injury judgments or settlements obtained by a medicaid recipient from a liable third party. Cf. Calvanese v. Calvanese, 93 N.Y.2d 111, 117, 710 N.E.2d 1079, 688 N.Y.S.2d 479 (1999) (describing New York's similar statutory scheme), overruled on other grounds by Arkansas Dept. of Health Human Services v. Ahlhorn, supra, [ 547 U.S. 268], as stated in In re Zyprexa Products Liability Litigation, 451 F.Sup.2d 458 (E.D.N.Y. 2006).
"The federal statutes illustrate that Congress has mandated that medicaid be a `payer of last resort' . . . Arkansas Dept. of Health Human Services v. Ahlborn, supra, 547 U.S. 291; and that the state is required to seek reimbursement of medicaid funds. The language of the relevant federal Medicaid statutes, however, does not dictate the method that states must employ to effectuate that goal . . .
"Significantly, Congress envistoned that third parties would be legally liable for a recipient's injuries and clearly intended that states should obtain reimbursement in that case. The Senate Report that accompanied the Social Security Amendments of 1967 stated that when `people need medical care because of an accident or illness for which someone else has fiscal liability; for example, a . . . party who is determined by a court to have legal liability,' § 1396a(a)(25)(A) through (C), was intended `to make certain that the [s]tate and the [f]ederal [g]ovemments will receive proper reimbursement for medical assistance paid to an eligible person when such third-party liability exists . . .' S. Rep. No. 744, 90th Cong., 1st Sess. 165 (1967), reprinted in 1967 U.S.C.C.A.N. 2834, 3022. Our review of the legislative history for the relevant Medicaid statutes reveals only one oblique reference to what method states should use in pursuing reimbursement when a third party is found to be liable for a recipient's medical expenses. In the same Senate Report, the Finance Committee stated that `if medical assistance is granted and legal liability of a third party is established later, the [s]tate or local agency must seek reimbursement from such party.' . . . S. Rep. No. 744, 90th Cong., 1st Sess., 165 (1967), reprinted in 1967 U.S.C.C.A.N. 2834, 3022 . . . This language clearly permits states to pursue reimbursement directly from a third party, but it does not logically follow, from its silence, that it precludes states from seeking reimbursement by other methods . . . Instead, we read this language to require that the state must obtain reimbursement from a liable third party, regardless of method, and must do so directly from a third party unless a beneficiary already has collected from that party because the state must collect reimbursement in some manner. We do not attribute more significance to this language than it warrants, particularly because there is no support in the statutes' text for limiting the state's reimbursement only to recovery from third parties directly. Moreover . . . there [is] no other reference to the method by which states should seek such reimbursement in any of the legislative history . . .
"We conclude, therefore, that the state has met its federal obligation to seek reimbursement of medicaid funds when third parties are found to be liable for a recipient's medical expenses by providing for assignment and subrogation rights; see General Statutes § 17b-265; and by allowing the state to assert a lien against funds recovered by medicaid recipients from third parties. General Statutes §§ 17b-93 and 17b-94. We therefore reject the defendants' claim that the federal medicaid statutes require states to pursue third parties directly for reimbursement . . ." (Emphasis in original.)
Connecticut law provides DSS with a statutory right to recover medical expenses paid on behalf of any medicaid enrollee. See State v. Peters, supra, 287 Conn. 92-93, 100 (holding that, taken together, §§ 17b-93, CT Page 14156 17b-94, and 17b-265 of the General Statutes satisfy the medicaid recovery requirements imposed on states by the federal government). The plain language of § 17b-265(b) allows DSS to assign that statutory recovery right to a designee. See Battersby v. Battersby, 218 Conn. 467, 470, 590 A.2d 427 (1991) (holding that "[w]hen language used in a statute is clear and unambiguous, its meaning is not subject to modification or construction").
As per § 17-265(b), DSS properly assigned its statutory reimbursement right to Health Net through the MMC Contract. As stated in the parties' joint stipulation of facts, p. 3, the MMC contract states that "[t]he Department hereby assigns to [Health Net] all rights to third party recoveries from Medicare, health insurance, casualty insurance, workers' compensation, tortfeasors, or any other third parties who may be responsible for payment of medical costs for [Health Net's Medicaid] members."
There is no genuine issue of material fact on this issue. DSS, in compliance with statute, assigned Health Net its statutory right to pursue recovery of medical expenses paid on behalf of Medicaid managed care enrollees.
2. Separate Action by the State
As discussed above, the court in State v. Peters, supra, 287 Conn. 96-97, concluded "[t]hat the state has met its federal obligation to seek reimbursement of medicaid funds when third parties are found to be liable for a recipient's medical expenses by providing for assignment and subrogation rights; see General Statutes § 17b-265; and by allowing the state to assert a lien against funds recovered by medicaid recipients from third parties. See General Statutes §§ 17b-93 and 17b-94. We therefore reject the defendants' claim that the federal medicaid statutes require states to pursue third parties directly for reimbursement . . ."[T]he federal statutes that govern the medicaid program do not require the state to pursue third party tortfeasors directly for the reimbursement of medicaid funds . . . We therefore conclude that Connecticut's reimbursement provisions, namely, §§ 17b-93, 17b-94 and 17b-265, satisfy the medicaid reimbursement requirements imposed by federal law." Id., 100.
There is no genuine issue of material fact on this question. DSS is not required to bring a direct action against third-party tortfeasors to recover medical expenses it expended on behalf of an enrollee. Therefore, Health Net, as the assignee of DSS, is not required to bring a separate action against a third-party tortfeasor to seek recovery of medical costs incurred on behalf of the enrollee.
3. Recovery by Health Net
In Arkansas Dept. of Health Human Services v. Ahlborn, supra, 547 U.S. 268, the United States Supreme Court examined an Arkansas law that provided that if a Medicaid recipient in Arkansas received a tort settlement after Medicaid paid for medical expenses on the recipient's behalf, then Arkansas law automatically imposed a lien on the settlement in a sum equal to the costs of Medicaid. Id., 272. When Medicaid's costs exceeded the portion of the settlement allocated to medical expenses, Arkansas law provided that the state's lien should be satisfied by payment from the settlement proceeds not allocated to medical expenses. Id., 272. This law also appeared to apply to recoveries that were the result of jury verdicts. Id., 278-79. The state of Arkansas claimed an entitlement to recover all the costs it paid on behalf of a Medicaid recipient, not just the portion of the settlement or judgment representing medical expense payments. Id., 278.
The Supreme Court held that the Arkansas law that allowed the state of Arkansas to recover more than the portion of the settlement or the judgment that represented medical expenses conflicted with the anti-lien provision of the federal medicaid laws. Id., 280, 284-85.
Other courts, including the Idaho Supreme Court, have had the opportunity to examine their own medicaid reimbursement statutes in light of Ahlborn. In Hudelson v. State of Idaho Dept. of Health Welfare, 196 P.3d 905, 911 (Idaho 2008), the Idaho Supreme Court examined its statute pertaining to reimbursing medicaid in the event a recipient was awarded an unallocated judgment or settlement in light of Ahlborn, and stated that Ahlborn did not overrule the relevant statute, I.C. § 56-209b(6) stating "[t]he language of Idaho's statute differs from the Arkansas statute that the United States Supreme Court held violative of the federal anti-lien provision . . . The language of Idaho's statute reads: `If a settlement . . . is received by the recipient without delineating what portion of the settlement . . . is in payment of medical expenses, it will be presumed that the settlement or judgment applies first to the medical expenses incurred by the recipient . . .' I.C. § 56-209b(6) . . . The statute does not require an automatic assignment of the settlement to the state, regardless of how much of the settlement represents medical expenses. Instead, the statute provides a framework for a court to determine what portion of an unallocated settlement represents medical expenses.
"I.C. § 56-209b(6) creates a procedure for determining a settlement allocation by imposing a presumption that an unallocated settlement will be allocated first to past medical expenses. Ahlborn does not prohibit states from implementing procedures on how to allocate unallocated settlements. In fact, Ahlborn specifically references the possibility that states may have rules and procedures in place that address how to allocate tort settlements in the absence of a stipulation. 547 U.S. at 287 n. 17 (stating `some States have adopted special rules and procedures for allocating tort settlements . . . Although we express no view on the matter, we leave open the possibility that such rules and procedures might be employed to meet concerns about settlement manipulation.'). Therefore, Ahlborn does not overrule I.C. § 56-209b(6)." (Citation omitted; emphasis in original.)
While the Connecticut General Statutes do not address how to calculate the amount that is to be reimbursed to DSS or health insurers who administer the medicaid managed care program, such as Health Net, from the proceeds of a settlement or judgment awarded to a medicaid recipient, Ahlborn makes clear that federal medicaid law does not require reimbursement from any settlement or judgment in an amount exceeding the medicaid funds paid and identified as part of any settlement or judgment.
V CONCLUSION A. In summary, the court concludes that:
1. DSS does have a right to assign its statutory recovery right to Health Net.
2. Health Net is not required to bring its own action against a third-party tortfeasor to seek recovery of medicaid costs incurred on behalf of an enrollee.
3. Reimbursement is limited to the amount of medicaid funds paid and identified as part of any settlement.
The defendant's motion for summary judgment as to count four of the operative complaint is granted. The plaintiffs' motion for summary judgment as to count four of the operative complaint is denied.