State ex rel. Office of Recovery Services v. McCoy
In State ex rel. Office of Recovery Services v. McCoy, 2000 UT 39, 999 P.2d 572, the Court was asked to consider whether the defendant, an attorney hired by a Medicaid recipient to recover damages for an injury he sustained in a slip and fall, was entitled to attorney fees from the State under section 26-19-7(4).
Before initiating any claim or suit against the liable third party, McCoy requested consent from the State to bring a claim on its behalf. Id
The State refused. Id. Thereafter, McCoy filed a claim against the liable third party, expressly excluding the State's claim for the medical assistance it had provided. Id.
The liable third party agreed to settle the claim and paid the Medicaid recipient. Id.
The State then filed suit against McCoy to recover its lien from the settlement proceeds held in trust by McCoy. Id.
McCoy resisted, arguing that because he had excluded the State's claim, the State was not entitled to any proceeds that he obtained. Id.
This court rejected McCoy's argument, holding that the Utah Medical Benefits Recovery Act, Utah Code Ann. 26-19-1 to -19 (1998) (amended 2004), entitled the State to the proceeds and superseded any efforts by McCoy to insulate his client's recovery from the State's reach.
Thus, to the extent McCoy attempted to utilize his exclusion of the State's claim as a tactic to avoid satisfying the State's lien, this court rejected that tactic. the Court did, however, allow McCoy to recover a proportionate share of his attorney fees from the State, reasoning that McCoy had "followed the requirements of the Act" by asking for the State's consent. Id.