441—75.4 (249A) Medical assistance lien.
	 75.4(1) When payment is made by the department for medical care or expenses through the medical assistance program on behalf of a member, the department shall have a lien, to the extent of those payments, to all monetary claims which the member may have against third parties.
	  a.   	 A lien is not effective unless the department files a notice of lien with the clerk of the district court in the county where the member resides and with the member’s attorney when the member’s eligibility for medical assistance is established. The notice of lien shall be filed before the third party has concluded a final settlement with the member, the member’s attorney, or other representative.
	  b.   	 The third party shall obtain a written determination from the department concerning the amount of the lien before a settlement is deemed final.
	 (1) 	 A compromise, including, but not limited to, notification, settlement, waiver or release of a claim, does not defeat the department’s lien except pursuant to the written agreement of the director or the director’s designee under which the department would receive less than full reimbursement of the amounts it expended.
	 (2) 	 A settlement, award, or judgment structured in any manner not to include medical expenses or an action brought by a member or on behalf of a member which fails to state a claim for recovery of medical expenses does not defeat the department’s lien if there is any recovery on the member’s claim.
	  c.   	 All notifications to the department required by law shall be directed to the Iowa Medicaid Enterprise, Revenue Collection Unit, P.O. Box 36475, Des Moines, Iowa 50315. Notification shall be considered made as of the time the notification is deposited so addressed, postage prepaid, in the United States Postal Service system.
	 75.4(2) The department may pursue its rights to recover either directly from any third party or from any recovery obtained by or on behalf of any member. If a member incurs the obligation to pay attorney fees and court costs for the purpose of enforcing a monetary claim to which the department has a lien under this section, upon the receipt of the judgment or settlement of the total claim, of which the lien for medical assistance payments is a part, the court costs and reasonable attorney fees shall first be deducted from this total judgment or settlement. One-third of the remaining balance shall then be deducted and paid to the member. From the remaining balance, the lien of the department shall be paid. Any amount remaining shall be paid to the member. An attorney acting on behalf of a member for the purpose of enforcing a claim to which the department has a lien shall not collect from the member any amount as attorney fees which is in excess of the amount which the attorney customarily would collect on claims not subject to this rule. The department will provide computer-generated documents or claim forms describing the services for which it has paid upon request of any affected member or the member’s attorney. The documents may also be provided to a third party where necessary to establish the extent of the department’s claim.
	 75.4(3) In those cases where appropriate notification is not given to the department or where the department’s recovery rights are otherwise adversely affected by an action of the member or one acting on the member’s behalf, medical assistance benefits shall be terminated. The medical assistance benefits of a minor child or a legally incompetent adult member shall not be terminated. Subsequent eligibility for medical assistance benefits shall be denied until an amount equal to the unrecovered claim has been reimbursed to the department or the individual produces documentation of incurred medical expense equal to the amount of the unrecovered claim. The incurred medical expense shall not be paid by the medical assistance program.
	  a.   	 The client, or one acting on the client’s behalf, shall provide information and verification as required to establish the availability of medical or third-party resources.
	  b.   	 Rescinded IAB 9/4/91, effective 11/1/91.
	  c.   	 The client or person acting on the client’s behalf shall complete Form 470-2826, Supplemental Insurance Questionnaire, in a timely manner at the time of application, when any change in medical resources occurs during the application period, and when any changes in medical resources occur after the application is approved.
A report shall be considered timely when made within ten days from:
	 (1) 	 The date that health insurance begins, changes, or ends.
	 (2) 	 The date that eligibility begins for care through the Department of Veterans Affairs, specialized child health services, Title XVIII of the Social Security Act (Medicare) and other resources.
	 (3) 	 The date the client, or one acting on the client’s behalf, files an insurance claim against an insured third party, for the payment of medical expenses that otherwise would be paid by Medicaid.
	 (4) 	 The date the member, or one acting on the member’s behalf, retains an attorney with the expectation of seeking restitution for injuries from a possibly liable third party, and the medical expenses resulting from those injuries would otherwise be paid by Medicaid.
	 (5) 	 The date that the member, or one acting on the member’s behalf, receives a partial or total settlement for the payment of medical expenses that would otherwise be paid by Medicaid.
The member may report the change in person, by telephone, by mail or by using the Ten-Day Report of Change, Form 470-0499 or 470-0499(S), which is mailed with the Family Investment Program warrants and is issued to the client when Medicaid applications are approved, when annual reviews are completed, when a completed Ten-Day Report of Change is submitted, and when the client requests a form.
	  d.   	 The member, or one acting on the member’s behalf, shall complete the Priority Leads Letter, Form 470-0398, when the department has reason to believe that the member has sustained an accident-related injury. Failure to cooperate in completing and returning this form, or in giving complete and accurate information, shall result in the termination of Medicaid benefits.
	  e.   	 When the recovery rights of the department are adversely affected by the actions of a parent or payee acting on behalf of a minor or legally incompetent adult member, the Medicaid benefits of the parent or payee shall be terminated. When a parent or payee fails to cooperate in completing or returning the Priority Leads Letter, Form 470-0398, or the Supplemental Insurance Questionnaire, Form 470-2826, or fails to give complete and accurate information concerning the accident-related injuries of a minor or legally incompetent adult member, the department shall terminate the Medicaid benefits of the parent or payee.
	  f.   	 The member, or one acting on the member’s behalf, shall refund to the department from any settlement or payment received the amount of any medical expenses paid by Medicaid. Failure of the member to do so shall result in the termination of Medicaid benefits. In those instances where a parent or payee, acting on behalf of a minor or legally incompetent adult member, fails to refund a settlement overpayment to the department, the Medicaid benefits of the parent or payee shall be terminated.
	 75.4(4) Third party and provider responsibilities.
	  a.   	 The health care services provider shall inform the department by appropriate notation on the Health Insurance Claim, Form CMS-1500, that other coverage exists but did not cover the service being billed or that payment was denied.
	  b.   	 The health care services provider shall notify the department in writing by mailing copies of any billing information sent to a member, an attorney, an insurer or other third party after a claim has been submitted to or paid by the department.
	  c.   	 An attorney representing an applicant for medical assistance or a past or present Medicaid member on a claim to which the department has filed a lien under this rule shall notify the department of the claim of which the attorney has actual knowledge, before filing a claim, commencing an action or negotiating a settlement offer. Actual knowledge shall include the notice to the attorney pursuant to subrule 75.4(1). The mailing and deposit in a United States post office or public mailing box of the notice, addressed to the department at its state or local office location, is adequate legal notice of the claim.
	 75.4(5) Department’s lien.
	  a.   	 The department’s liens are valid and binding on an attorney, insurer or other third party only upon notice by the department or unless the attorney, insurer or other third party has actual notice that the member is receiving medical assistance from the department and only to the extent that the attorney, insurer or third party has not made payment to the member or an assignee of the member prior to the notice.
Any information released to an attorney, insurer or other third party, by the health care services provider, that indicates that reimbursement from the state was contemplated or received, shall be construed as giving the attorney, insurer or other third party actual knowledge of the department’s involvement. For example, information supplied by a health care services provider which indicates medical assistance involvement shall be construed as showing involvement by the department under Iowa Code section 249A.6. Payment of benefits by an insurer or third party pursuant to the rights of the lienholder in this rule discharges the attorney, insurer or other third party from liability to the member or the member’s assignee to the extent of the payment to the department.
	  b.   	 When the department has reason to believe that an attorney is representing a member on a claim to which the department filed a lien under this rule, the department shall issue notice to that attorney of the department’s lien rights by mailing the Notice of Medical Assistance Lien, Form 470-3030, to the attorney.
	  c.   	 When the department has reason to believe that an insurer is liable for the costs of a member’s medical expenses, the department shall issue notice to the insurer of the department’s lien rights by mailing the Notice of Medical Assistance Lien, Form 470-3030, to the insurer.
	  d.   	 The mailing and deposit in a United States post office or public mailing box of the notice, addressed to the attorney or insurer, is adequate legal notice of the department’s subrogation rights.
	 75.4(6) For purposes of this rule, the term “third party” includes an attorney, individual, institution, corporation, or public or private agency which is or may be liable to pay part or all of the medical costs incurred as a result of injury, disease or disability by or on behalf of an applicant for medical assistance or a past or present Medicaid member.
	 75.4(7) The department may enforce its lien by a civil action against any liable third party.
This rule is intended to implement Iowa Code sections 249A.4, 249A.5, and 249A.6.