Bill Text: TX HB1869 | 2013-2014 | 83rd Legislature | Enrolled
Bill Title: Relating to contractual subrogation and other recovery rights of certain insurers and benefit plan issuers.
Spectrum: Moderate Partisan Bill (Republican 7-1)
Status: (Passed) 2013-05-25 - Effective on 1/1/14 [HB1869 Detail]
Download: Texas-2013-HB1869-Enrolled.html
H.B. No. 1869 |
|
||
relating to contractual subrogation and other recovery rights of | ||
certain insurers and benefit plan issuers. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Title 6, Civil Practice and Remedies Code, is | ||
amended by adding Chapter 140 to read as follows: | ||
CHAPTER 140. CONTRACTUAL SUBROGATION RIGHTS OF PAYORS OF CERTAIN | ||
BENEFITS | ||
Sec. 140.001. DEFINITIONS. In this chapter: | ||
(1) "Covered individual" means an individual entitled | ||
to benefits described by Section 140.002. | ||
(2) "Payor of benefits" or "payor" means an issuer of a | ||
plan providing benefits described by Section 140.002 that: | ||
(A) pays benefits to or on behalf of a covered | ||
individual as a result of personal injuries to the covered | ||
individual caused by the tortious conduct of a third party; and | ||
(B) has a contractual right of subrogation | ||
described by Section 140.004. | ||
Sec. 140.002. APPLICABILITY OF CHAPTER. (a) This chapter | ||
applies to an issuer of a health benefit plan that provides benefits | ||
for medical or surgical expenses incurred as a result of a health | ||
condition, accident, or sickness, a disability benefit plan, or an | ||
employee welfare benefit plan, including an individual, group, | ||
blanket, or franchise insurance policy or insurance agreement, a | ||
group hospital service contract, or an individual or group evidence | ||
of coverage or similar coverage document, including: | ||
(1) an insurance company; | ||
(2) a group hospital service corporation operating | ||
under Chapter 842, Insurance Code; | ||
(3) a fraternal benefit society operating under | ||
Chapter 885, Insurance Code; | ||
(4) a stipulated premium insurance company operating | ||
under Chapter 884, Insurance Code; | ||
(5) a reciprocal exchange operating under Chapter 942, | ||
Insurance Code; | ||
(6) a health maintenance organization operating under | ||
Chapter 843, Insurance Code; | ||
(7) a multiple employer welfare arrangement that holds | ||
a certificate of authority under Chapter 846, Insurance Code; or | ||
(8) an approved nonprofit health corporation that | ||
holds a certificate of authority under Chapter 844, Insurance Code. | ||
(b) Notwithstanding Section 172.014, Local Government Code, | ||
or any other law, this chapter applies to a risk pool providing | ||
health and accident coverage under Chapter 172, Local Government | ||
Code. | ||
(c) Notwithstanding any other law, this chapter applies to | ||
an issuer of a plan or coverage under Chapter 1551, 1575, 1579, or | ||
1601, Insurance Code. | ||
(d) Notwithstanding any other law, this chapter applies to | ||
any self-funded issuer of a plan that provides a benefit described | ||
by Subsection (a). | ||
(e) This chapter applies to any policy, evidence of | ||
coverage, or contract under which a benefit described by Subsection | ||
(a) is provided and: | ||
(1) that is delivered, issued for delivery, or entered | ||
into in this state; or | ||
(2) under which an individual or group in this state is | ||
entitled to benefits. | ||
(f) This chapter does not apply to: | ||
(1) a workers' compensation insurance policy or any | ||
other source of medical benefits under Title 5, Labor Code; | ||
(2) Medicare; | ||
(3) the Medicaid program under Chapter 32, Human | ||
Resources Code; | ||
(4) a Medicaid managed care program operated under | ||
Chapter 533, Government Code; | ||
(5) the state child health plan or any other program | ||
operated under Chapter 62 or 63, Health and Safety Code; or | ||
(6) a self-funded plan that is subject to the Employee | ||
Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et | ||
seq.). | ||
Sec. 140.003. CONFLICTS WITH OTHER LAW. In the event of a | ||
conflict between this chapter and another law, including a rule of | ||
procedure or evidence, this chapter controls to the extent of the | ||
conflict. | ||
Sec. 140.004. CONTRACTUAL SUBROGATION RIGHTS AUTHORIZED. | ||
An issuer of a plan that provides benefits described by Section | ||
140.002 under which the policy or plan issuer may be obligated to | ||
make payments or provide medical or surgical benefits to or on | ||
behalf of a covered individual as a result of a personal injury to | ||
the individual caused by the tortious conduct of a third party may | ||
contract to be subrogated to and have a right of reimbursement for | ||
payments made or costs of benefits provided from the individual's | ||
recovery for that injury, subject to this chapter. | ||
Sec. 140.005. PAYORS' RECOVERY LIMITED. (a) If an injured | ||
covered individual is entitled by law to seek a recovery from the | ||
third-party tortfeasor for benefits paid or provided by a subrogee | ||
as described by Section 140.004, then all payors are entitled to | ||
recover as provided by Subsection (b) or (c). | ||
(b) This subsection applies when a covered individual is not | ||
represented by an attorney in obtaining a recovery. All payors' | ||
share under Subsection (a) of a covered individual's recovery is an | ||
amount that is equal to the lesser of: | ||
(1) one-half of the covered individual's gross | ||
recovery; or | ||
(2) the total cost of benefits paid, provided, or | ||
assumed by the payor as a direct result of the tortious conduct of | ||
the third party. | ||
(c) This subsection applies when a covered individual is | ||
represented by an attorney in obtaining a recovery. All payors' | ||
share under Subsection (a) of a covered individual's recovery is an | ||
amount that is equal to the lesser of: | ||
(1) one-half of the covered individual's gross | ||
recovery less attorney's fees and procurement costs as provided by | ||
Section 140.007; or | ||
(2) the total cost of benefits paid, provided, or | ||
assumed by the payor as a direct result of the tortious conduct of | ||
the third party less attorney's fees and procurement costs as | ||
provided by Section 140.007. | ||
(d) A common law doctrine that requires an injured party to | ||
be made whole before a subrogee makes a recovery does not apply to | ||
the recovery of a payor under this section. | ||
Sec. 140.006. ATTORNEY'S FEES IN DECLARATORY JUDGMENT | ||
ACTION. Notwithstanding Section 37.009 or any other law, if a | ||
declaratory judgment action is brought under this chapter, the | ||
court may not award costs or attorney's fees to any party in the | ||
action. | ||
Sec. 140.007. ATTORNEY'S FEES IN RECOVERY ACTION. (a) | ||
Except as provided by Subsection (c), a payor of benefits whose | ||
interest is not actively represented by an attorney in an action to | ||
recover for a personal injury to a covered individual shall pay to | ||
an attorney representing the covered individual a fee in an amount | ||
determined under an agreement entered into between the attorney and | ||
the payor plus a pro rata share of expenses incurred in connection | ||
with the recovery. | ||
(b) Except as provided by Subsection (c), in the absence of | ||
an agreement described by Subsection (a), the court shall award to | ||
the attorney, payable out of the payor's share of the total gross | ||
recovery, a reasonable fee for recovery of the payor's share, not to | ||
exceed one-third of the payor's recovery. | ||
(c) If an attorney representing the payor's interest | ||
actively participates in obtaining a recovery, the court shall | ||
award and apportion between the covered individual's and the | ||
payor's attorneys a fee payable out of the payor's subrogation | ||
recovery. In apportioning the award, the court shall consider the | ||
benefit accruing to the payor as a result of each attorney's | ||
service. The total attorney's fees may not exceed one-third of the | ||
payor's recovery. | ||
Sec. 140.008. FIRST-PARTY RECOVERY. (a) Except as provided | ||
by Subsection (b), a payor of benefits may not pursue a recovery | ||
against a covered individual's first-party recovery. | ||
(b) A payor of benefits may pursue recovery against | ||
uninsured/underinsured motorist coverage or medical payments | ||
coverage only if the covered individual or the covered individual's | ||
immediate family did not pay the premiums for the coverage. | ||
Sec. 140.009. CONSTRUCTION OF CHAPTER. This chapter does | ||
not create a cause of action. Nothing in this chapter shall be | ||
construed to prevent a payor of benefits from waiving, negotiating, | ||
or not pursuing any claim or recovery described by Section 140.004 | ||
or 140.005. | ||
SECTION 2. Section 172.015, Local Government Code, is | ||
repealed. | ||
SECTION 3. It is the intent of the legislature that if any | ||
provision, section, subsection, sentence, clause, phrase, or word | ||
of this Act or the application thereof to any person or circumstance | ||
is found to be unconstitutional, the provision, section, | ||
subsection, sentence, clause, phrase, or word is hereby declared to | ||
be severable and the balance of this Act remains effective | ||
notwithstanding such unconstitutionality. Moreover, the | ||
legislature declares that it would have passed this Act, and each | ||
provision, section, subsection, sentence, clause, phrase, or word | ||
thereof, irrespective of the fact that any provision, section, | ||
subsection, sentence, clause, phrase, or word, or any of their | ||
applications, were to be declared unconstitutional. | ||
SECTION 4. The change in law made by this Act applies only | ||
to a contractual right of subrogation in a cause of action that | ||
accrues on or after the effective date of this Act to assert a | ||
contractual right of subrogation or recovery described by Section | ||
140.004, Civil Practice and Remedies Code, as added by this Act. | ||
SECTION 5. This Act takes effect January 1, 2014. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I certify that H.B. No. 1869 was passed by the House on May 6, | ||
2013, by the following vote: Yeas 144, Nays 0, 1 present, not | ||
voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
I certify that H.B. No. 1869 was passed by the Senate on | ||
May | ||
14, 2013, by the following vote: Yeas 31, Nays 0. | ||
______________________________ | ||
Secretary of the Senate | ||
APPROVED: _____________________ | ||
Date | ||
_____________________ | ||
Governor |