Rathbun v. Health Net of the Northeast, Inc.
An insurer who possesses a subrogation right has the right to seek reimbursement from the insured if the insured has effected a settlement or judgment with a responsible third party. Connecticut's Department of Social Services contracted with Health Net of the Northeast, Inc., regarding the administration of the state's Medicaid managed care program. Health Net contracted with The Rawlings Company, LLC to pursue recoveries for medical treatment provided to its members where there was a potential for third party liability. Amy Rathbun, a Medicaid managed care plan member, was paid $2982.93 for medical treatment affiliated with her injuries stemming from a motor vehicle accident. Rawlings notified Rathbun's counsel pursuing tort claims against the other driver in the accident and the third party's insurer, of Health Net's claim for repayment of the medical benefits paid on Rathbun's behalf. Tanequa Brayboy's daughter was also a care plan member when she was struck by a motor vehicle and died. Health Net paid $13,541.45 for medical treatment affiliated with the injuries. Rawlings issued its notice of claim letter to Brayboy's counsel pursuing tort claims in connection with the accident. The plaintiffs, Rathbun and Brayboy, brought this putative class action against Health Net. The trial court granted summary judgment to the defendant. The plaintiffs appealed contending that the court erred in determining that the defendant could assert a claim against the plaintiffs to recover the costs of medical care owed to the plaintiffs by responsible third parties. The plaintiffs argued that C.G.S. §17b-265(a) provides the department with the right to seek reimbursement through subrogation directly from a third party only and not from the Medicaid recipient. The Appellate Court disagreed and affirmed the judgment. The defendant had a statutory right to subrogation, which the plaintiffs affected when they settled or secured judgment with the responsible third parties. Simply because the statute did not reference a direct right to be reimbursed from funds collected by the insured did not mean that such right does not exist. The statute specifically provides that the Medicaid enrollee must make a subrogation assignment to the department or its designee. It would be inequitable to allow the insured to bypass the dictates of the statute simply by securing a settlement or judgment and ultimately recovering a double payment.