HB 1869 by Rep. Four Price (R-Amarillo) passed to engrossment on Saturday. Rep. Price offered a floor substitute to the bill that modifies the committee version in several ways. The floor substitute:
- clarifies that the bill does not apply to self-funded plans that are subject to the Employee Retirement Income Security Act of 1974 (ERISA);
- provides that if the insured is not represented by an attorney, the payors’ (health insurers’) recovery in the subrogation action is limited to the lesser of 50% of the insured’s gross recovery or the total cost of benefits paid by insurers as a direct result of the tortious conduct of the third party (committee version limited the recovery to 33%);
- provides that if the insured is represented by an attorney, the payors’ recovery is limited to the lesser of 50% of the insured’s gross recovery less attorney’s fees and procurement costs or the total cost of benefits paid;
- clarifies that the common law “made whole” doctrine does not apply to the recovery of a payor under the new law;
- establishes a process for the award of attorney’s fees in cases in which the payor is and is not actively represented by an attorney; and
- prohibits a payor of benefits from pursuing a recovery against the insured’s first-party recovery (except against uninsured/underinsured motorist coverage or medical payments coverage if the insured or the insured’s immediate family did not pay the premiums for the coverage.
The Senate companion, SB 1339 by Senator Duncan has been heard in Senate State Affairs and is pending.
