Kansas and Arizona both presently prohibit health insurance companies from seeking subrogation recoveries within their states. Interestingly, both states introduced legislation to allow their state funds or programs to seek recovery of their payments through subrogation and/or reimbursement.
Kansas seeks to allow its state employee fund to pursue subrogation rights and reimbursement from its employees. The Kansas bill would provide the underlying plaintiff attorney a fee of either 33-1/3 or 40% from any recovery by the state health plan. It also establishes coordination of benefits as a matter of law.
Arizona Senate Bill 1043 was enacted on May 6, 2010. The bill creates for the State of Arizona the “Children’s Health Insurance Program” (CHIP). The law grants the State subrogation rights “against any other person or firm to enforce the assignment of medical benefits.” Section 36-2986, subsection A, paragraph 8. With the new CHIP program the legislature has created subrogation rights for the State of Arizona to ensure they remain the payor of last resort. This law is an example of a state using subrogation to further advance public policy and provide benefits to the citizens of its state as well as assistance in controlling costs.
As reported by the Amicus Committee for the National Association of Subrogation Professionals, Weltman, Weinberg and Reis, Co., LPA member.