Section 259.4. Settlements without litigation—statement of policy

(a) With respect to claims asserted by the MA Program against moneys owed by third parties as a result of tort claims asserted by a beneficiary of MA benefits, the Department will only recover from that portion of a tort settlement which represents payment for medical care by the third party. The beneficiary has the burden of informing the Department that its claim must be limited under this subsection and showing not all medical expenses paid by MA were recovered. For purposes of this section, the term ‘‘beneficiary’’ includes both present and former adult and minor recipients of MA benefits, and includes individuals receiving benefits through an MA managed care organization.

(b) If a beneficiary settles a tort claim without litigation, the settlement includes medical expenses paid by MA unless one of the following applies:

(1) The case involves a minor or incapacitated individual and a court enters an order expressly adjudicating the Department’s claim after the Department has been given notice and an opportunity to be heard.

(2) The beneficiary is legally incapable of recovering the medical expenses paid by MA.

(3) The beneficiary notifies both the Department and the third party or insurer that the beneficiary’s claim does not include medical expenses paid by MA prior to settling the claim.

(c) A beneficiary may not settle or release the Department’s claims against third parties or insurers without the Department’s written consent.

(d) The failure to provide reasonable notice to the Department that a claim does not include recovery of medical expenses paid by MA constitutes a violation of section 1408(a)(1) of the Public Welfare Code (62 P. S. § 1408(a)(1)). Notice is not reasonable if it is given less than 30 days prior to the date a settlement agreement is fully executed.

(e) The Bureau of Hearings and Appeals has jurisdiction to hear and determine an appeal by a beneficiary contesting the amount of the Department’s claim against a settlement.

The provisions of this § 259.4 adopted October 31, 2008, effective November 1, 2008, 38 Pa. Code 5970.