2005 Vermont Code - § 1910. — Liability of third parties; liens

§ 1910. Liability of third parties; liens

(a) The agency shall have a lien against a third party, to the extent of the amount paid by the agency, on any recovery for that claim, whether by judgment, compromise or settlement, whenever:

(1) the agency pays medical expenses for or on behalf of a recipient who has been injured or has suffered an illness or disease as a result of negligence; and

(2) the person asserts a claim against a third party for damages resulting from the injury, illness or disease.

(b) The agency shall have a lien against the insurer, to the extent of the amount paid by the agency, on any recovery from the insurer, whenever:

(1) the agency pays medical expenses or renders medical services on behalf of a person who has been injured or has suffered an injury, illness or disease; and

(2) the person asserts a claim against an insurer as a result of the injury, illness or disease.

(c) An attorney representing a person who, as a result of injuries, illness or disease suffered as the result of the negligence or wrong of another has received, is receiving or has applied for medical assistance under this subchapter or for residential care provided by the agency at a hospital for the mentally ill or habilitative care center for the developmentally disabled shall, provided the attorney has notice of the receipt or application, notify the agency prior to distribution of the settlement or judgment.

(d) A lien created under this section shall not be effective unless:

(1) notice of the lien is filed in the office of the clerk of the town in which the agency is located and contains the name and address of the recipient, acknowledgment of the recipient's application for or receipt of medical assistance, and the name of the person alleged to be liable; and

(2) the agency mails a notice of the lien with a statement of the date it was filed to the person alleged to be liable.

(e) The agency shall send a copy of the notice of the lien required by subsection (d) of this section to the following persons, if the appropriate names and addresses can be determined:

(1) The injured, ill or diseased person for whom the department has paid medical expenses.

(2) Any insurance carrier that may be ultimately liable.

(3) Any attorney for the injured, ill or diseased person.

(f) Within 45 days after the filing of the notice of the lien, the agency shall send an itemized statement of the medical expenses paid by the agency for which the agency seeks to perfect a lien to the persons listed in subsection (e) of this section. The notice provisions contained in this subsection may be waived by agreement of the parties.

(g) The agency may, on behalf of a recipient, perfect a lien by filing an action against a third party. The agency may initiate this action only if:

(1) the recipient has not initiated legal proceedings against the third party; and

(2) the time remaining under the statute of limitations for the action is six months or less.

(h) The attorney general shall be responsible for initiating actions on behalf of the agency.

(i) Whenever the agency recovers under the lien and that recovery is the result of an action initiated by a recipient, the attorney for the recipient may withhold the agency's pro rata share of reasonably necessary costs and expenses incurred in asserting the claim. If the agency waives its right to a lien, it is not liable for a pro rata share of costs under this subsection.

(j) The attorney for the recipient may negotiate an attorney fee with the agency.

(k) In cases in which the agency's lien equals or exceeds the amount of judgment or settlement, the agency shall reduce its claim by recognizing reasonable attorney fees and other reasonable costs of procurement of settlement. Additionally, the agency shall compromise its claim taking into consideration the nonmedical claims of the recipient.

(l) In cases in which the court has determined the amount of recovery allocated for past medical expenses, the agency's lien shall be limited to that amount. (Added 1995, No. 152 (Adj. Sess.), § 4.)