Compromise or waiver -- Recipient's right to action protected. (1) (a) Except as provided in Subsection (1)(c), if the department provides or becomes obligated to provide medical assistance to a recipient that a third-party is obligated to pay for, the department may recover the medical assistance directly from the third-party. (b) (i) A claim under Subsection (1)(a) or Section 26B-3-1003 to recover medical assistance provided to a recipient is a lien against any proceeds payable to or on behalf of the recipient by the third-party. (ii) The lien described in Subsection (1)(b)(i) has priority over all other claims to the proceeds, except claims for attorney fees and costs authorized under Subsection 26B-3-1011(2)(c)(ii). (c) (i) The department may not recover medical assistance under Subsection (1)(a) if: (A) the third-party is obligated to pay the recipient for an injury to the recipient's child that occurred while the child was in the physical custody of the child's foster parent; (B) the child's injury is a physical or mental impairment that requires ongoing medical attention, or limits activities of daily living, for at least one year; (C) the third-party's payment to the recipient is placed in a trust, annuity, financial account, or other financial instrument for the benefit of the child; and (D) the recipient makes reasonable efforts to mitigate any other medical assistance costs for the recipient to the state. (ii) The department is responsible for any repayment to the federal government related to the medical assistance the department is prohibited from recovering under Subsection (1)(c)(i). (2) (a) The department shall mail or deliver written notice of the department's claim or lien to the third-party at the third-party's principal place of business or last-known address. (b) The notice shall include: (i) the recipient's name; (ii) the approximate date of illness or injury; (iii) a general description of the type of illness or injury; and (iv) if applicable, the general location where the injury is alleged to have occurred. (3) The department may commence an action on the department's claim or lien in the department's name, but the claim or lien is not enforceable as to a third-party unless: (a) the third-party receives written notice of the department's claim or lien before the third-party settles with the recipient; or (b) the department has evidence that the third party had knowledge that the department provided or was obligated to provide medical assistance. (4) The department may: (a) waive a claim or lien against a third party in whole or in part; or (b) compromise, settle, or release a claim or lien. (5) An action commenced under this section does not bar an action by a recipient or a dependent of a recipient for loss or damage not included in the department's action. (6) Except as provided in Subsection (1)(c), the department's claim or lien on proceeds under this section is not affected by the transfer of the proceeds to a trust, annuity, financial account, or other financial instrument. Renumbered and Amended by Chapter 306, 2023 General Session
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