AMY RATHBUN ET AL. v. HEALTH NET OF THE NORTHEAST, INC.
(SC 18928)
Supreme Court of Connecticut
Argued September 25, 2014—officially released March 10, 2015
Palmer, Zarella, McDonald, Espinosa and Vertefeuille, Js.
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Eric P.
Linda L. Morkan, with whom, on the brief, was Theodore J. Tucci, for the appellee (defendant).
Opinion
PALMER, J. The issue that we must resolve in this certified appeal is whether
The opinion of the Appellate Court sets forth the following procedural history and facts, which were stipulated to by the parties and accepted by the trial court. ‘‘Under the Medicaid Act (Medicaid);
‘‘The department contracted with [Health Net] directly and through its predecessors from 1995 through 2008 regarding the administration of the Medicaid managed care program. The contract provided that ‘[t]he [d]epartment hereby assigns to [Health Net] all rights to third party recoveries from Medicare, health insurance, casualty insurance, workers’ compensation, tortfeasors, or any other third parties who may be responsible for payment of medical costs for [Health Net’s] members.’ The contract limited [Health Net’s] right to recovery to the amount that [it] paid toward the cost of its member’s care. The contract required [Health Net] to make efforts to determine the legal liability of third parties for health care services provided to Medicaid enrollees, and to ‘pursue, collect, and retain any [money] from [third-party] payers for services to [Health Net’s] members under this contract . . . .’ The contract further provided that [Health Net] could assign ‘the right of recovery to [its] subcontractors and/or network providers.’
‘‘[Health Net] contracted with [Rawlings] . . . to pursue recoveries for medical treatment provided to [Health Net’s] members in instances [in which] there was potential for [third-party] liability. When Rawlings became aware that a member was injured by a third party, it typically notified the injured member and the third party that [Health Net] had a right to recover medical expenses paid on the member’s behalf.
‘‘Rathbun was a member of [Health Net’s] Medicaid managed care plan. [Health Net] paid $2982.93 for medical treatment [rendered in connection with] Rathbun’s injuries stemming from a motor vehicle accident that occurred on July 24, 2006. Rathbun retained legal counsel to pursue potential tort claims against the driver of the other vehicle involved in the accident. Rawlings notified Rathbun’s counsel, as well as the [driver’s] insurer, that [Health Net] had a claim for repayment of the medical benefits it [had] paid on Rathbun’s behalf for injuries sustained in the motor vehicle accident. Rathbun’s counsel sent a check in the amount of $2982.93 to [Health Net] in satisfaction of [Health Net’s] claim.
‘‘Kay’ Anah Brayboy, the daughter of Tanequa Brayboy, was a member of [Health Net’s] Medicaid managed care plan. On July 4, 2007, Kay’ Anah [Brayboy] was struck by a motor vehicle and subsequently died as a result of her injuries. [Health Net] paid $13,541.45 for medical treatment [rendered in connection with] Kay’ Anah Brayboy’s injuries from the accident. Tanequa Brayboy retained legal counsel to pursue possible tort claims against the driver of the motor vehicle that struck her daughter. Rawlings notified Tanequa Brayboy’s counsel that [Health Net] had a claim for repayment for medical benefits paid on behalf of Kay’ Anah Brayboy in connection with the motor vehicle accident. [Tanequa] Brayboy subsequently retained new counsel, and Rawlings reissued its notice of claim letter to the attention of [Tanequa] Brayboy’s new counsel. To date, [Health Net] has not been reimbursed for the cost of medical care provided to Kay’ Anah Brayboy.
‘‘In its memorandum of decision, the [trial] court concluded that the department had assigned its statutory recovery right to [Health Net]. The court noted that under . . .
The plaintiffs then appealed to the Appellate Court, claiming that Health Net was prohibited by
On appeal to this court, the plaintiffs renew their claim that the right of subrogation created by
Our review of the trial court’s decision to grant Health Net’s motion for summary judgment is plenary. See, e.g., Plato Associates, LLC v. Environmental Compliance Services, Inc., 298 Conn. 852, 862, 9 A.3d 698 (2010). Similarly, whether
‘‘The state . . . has elected to participate in the [M]edicaid program, and, therefore, is obligated to comply with federal requirements. See
‘‘The federal statutes illustrate that Congress has mandated that [M]edicaid be a payer of last resort . . . and that the state is required to seek reimbursement of [M]edicaid funds. The language of the relevant federal [M]edicaid statutes, however, does not dictate the method that states must employ to effectuate that goal.’’ (Citation omitted; emphasis in original; footnotes omitted; internal quotation marks omitted.) State v. Peters, 287 Conn. 82, 89–93, 946 A.2d 1231 (2008).
With this background in mind, we turn to the text of
The plaintiffs contend that the language of
We first consider common-law principles governing the doctrine of subrogation. ‘‘In its simplest form, subrogation allows a party who has paid a debt to step into the shoes of another (usually the debtee) to assume his or her legal rights against a third party to prevent that party’s unjust enrichment. . . . The common-law doctrine of legal or equitable subrogation therefore enables an insurance company that has made a payment to its insured to substitute itself for the insured and to proceed against the responsible third party.’’ (Citation omitted; internal quotation marks omitted.) Fireman’s Fund Ins. Co. v. TD Banknorth Ins. Agency, Inc., 309 Conn. 449, 455, 72 A.3d 36 (2013).
‘‘The object of [legal or equitable] subrogation is the prevention of injustice. It is designed to promote and to accomplish justice, and is the mode [that] equity adopts to compel the ultimate payment of a debt by one who, in justice, equity, and good conscience, should pay it. . . . Subrogation further promotes equity by preventing an insured from receiving more than full indemnification as a result of recovering from both the wrongdoer and the insurer for the same loss, which would unjustly enrich the insured.’’ (Citation omitted; internal quotation marks omitted.) Id., 456.
Moreover, ‘‘[it] is well established that an insurer’s [common-law] right to subrogation . . . includes a claim against any judgment secured by the insured against the party at fault for the amount paid by the insurer in satisfaction of the insured’s damage claim under the policy.’’ Automobile Ins. Co. v. Conlon, 153 Conn. 415, 419, 216 A.2d 828 (1966); accord Sargeant v. International Union of Operating Engineers, Local Union 478 Health Benefits & Ins. Fund, 746 F. Supp. 241, 245–56 (D. Conn. 1990); see also Continental Ins. Co. v. Connecticut Natural Gas Corp., 5 Conn. App. 53, 59, 497 A.2d 54 (1985) (‘‘[t]he principle that an insurer [that] has paid a claim for property destroyed through the fault of a third person may, in certain circumstances, be reimbursed out of the funds received by the insured in satisfaction of his claim against the third person, is generally recognized’’); Amica Mutual Ins. Co. v. Barton, 1 Conn. App. 569, 574, 474 A.2d 104 (1984) (‘‘The subrogation right [conferred by
This conclusion also is supported by the legislative policy underlying
We recognize that Ahlborn and Peters involved state statutes that, unlike
We acknowledge that this interpretation of
In support of their position, the plaintiffs cite a number of cases that hold that
The plaintiffs also claim that cases standing for the proposition that an insurer may seek reimbursement from its insured for money that the insured has recovered from the wrongdoer are inapposite because they involve equitable subrogation and this case involves the statutory right of subrogation created by
The plaintiffs further contend that it is inappropriate to rely on the equitable principles that underlie the doctrine of subrogation to determine the scope of
The factual issue of whether these specific plaintiffs, or other similarly situated plaintiffs, will or will not receive a double recovery if Health Net is barred from seeking reimbursement from them has no bearing on the proper interpretation of
Having concluded that the Appellate Court correctly determined that
The judgment of the Appellate Court is affirmed.
In this opinion the other justices concurred.
Notes
‘‘(b) An applicant or recipient or legally liable relative, by the act of the applicant’s or recipient’s receiving medical assistance, shall be deemed to have made a subrogation assignment and an assignment of claim for benefits to the department. The department shall inform an applicant of such assignments at the time of application. Any entitlements from a contractual agreement with an applicant or recipient, legally liable relative or a state or federal program for such medical services, not to exceed the amount expended by the department, shall be so assigned. Such entitlements shall be directly reimbursable to the department by third party payors. The Department of Social Services may assign its right to subrogation or its entitlement to benefits to a designee . . . . This subsection shall not be construed to affect the right of an applicant or recipient to maintain an independent cause of action against such third party tortfeasor. . . .’’
Section
‘‘So there’s no evidence here that these settlements incorporated medical expenses at all. I just don’t want that to be assumed somehow that they collected medical expenses. There’s no evidence to that effect, and I would argue [that] there would [be] absolutely no legal entitlement for any of these plaintiffs to have claimed medical expenses that were paid by Health Net.’’
Thereafter, the trial court ordered the parties to submit briefs on the following question: ‘‘How, if at all, does the [United States] Supreme [Court’s decision] in [Arkansas Dept. of Health & Human Services v. Ahlborn, supra, 547 U.S. 268] relate to the facts presented here insofar as the portion of any settlements that represent Medicaid expenses are not separately set forth in such settlements?’’ In Ahlborn, the United States Supreme Court held that the claim of a state agency administering a Medicaid program to the proceeds of a Medicaid recipient’s settlement with a liable third party is limited to the amount that the recipient recovered for the costs of medical care. See Arkansas Dept. of Health & Human Services v. Ahlborn, supra, 284. In response to the trial court’s order, Health Net submitted a brief in which it contended that the plaintiffs had alleged no facts that would support the finding of an Ahlborn violation. The plaintiffs submitted a brief in which they contended that Ahlborn ‘‘should not impact the particular issues raised in the plaintiffs’ complaint. In particular, the plaintiffs . . . are limiting their challenge to the right of private parties to assert the state’s § 17b-94 statutory lien rights.’’ The plaintiffs further contended that ‘‘[t]he holding in Ahlborn may represent another rationale as to why [Health Net] should not recover its ‘lien,’ but this [issue] is not currently before the court.’’ The plaintiffs did not ask the trial court to address the Ahlborn issue if it concluded that Health Net was entitled to seek reimbursement from them, they did not include any facts relating to this issue in the joint statement of stipulated facts, they did not submit any affidavits or other documents with their brief indicating that they had not recovered medical costs from the respective liable third parties, and they made no such claim in their complaint. The trial court ultimately determined, as a matter of law, that, under Ahlborn, Health Net’s right to reimbursement from the plaintiffs was ‘‘limited to the amount of Medicaid funds paid and identified as part of any settlement.’’ The court made no factual findings, however, as to whether the amounts that Health Net had recovered from Rathbun and sought to recover from Tanequa Brayboy exceeded the amounts that the plaintiffs had recovered for medical costs. The plaintiffs made no claim in their appeal to the Appellate Court that the trial court improperly failed to make factual findings on this issue or that the case should be remanded to the trial court for resolution of the issue. We therefore reject the plaintiffs’ claim that we may and should address this fact bound issue in the present appeal.
We also reject the plaintiffs’ argument that, as a matter of law, they could not have recovered medical costs from the liable third parties because they had assigned their rights to such recovery to Health Net. The plaintiffs have cited no authority for the proposition that an insured is categorically prohibited from recovering amounts paid by the insurer from the liable third party. Indeed, the very statute at issue in the present case expressly provides that it ‘‘shall not be construed to affect the right of an applicant or recipient to maintain an independent cause of action against [a] third party tortfeasor.’’
Finally, we emphasize that Health Net has not appealed from the trial court’s ruling that it is entitled to reimbursement only for the amounts that the plaintiffs recovered from the liable third parties for medical costs, and nothing in this opinion prevents the plaintiffs or other similarly situated persons from claiming in future proceedings concerning Health Net’s reimbursement claims that the amounts sought exceed the amounts that were recovered from the liable third parties for medical costs. Indeed, it is reasonable to conclude that the plaintiffs’ attorney was merely attempting to preserve the right to raise this issue in future proceedings when he argued to the trial court that there was no evidence that the plaintiffs had recovered such costs.
There are certain exceptions to the general rule that are not relevant for purposes of this appeal. See
