Section 8-27-903 - Subrogation - Reimbursement(a) A plan shall not recover a medical payment paid to, or on behalf of, a plan participant under a plan unless:(1) The medical payment has been incorrectly paid; or(2) The plan participant recovers, or is entitled to recover, from a third-party tortfeasor or third-party insurer reimbursement for all or part of the costs of care or treatment for the injury or illness for which the medical payment is paid.(b) The plan is subrogated to all rights of recovery against any person or entity for the cost of care or treatment for any injury or illness caused by a third-party tortfeasor for which medical payment is provided, contractual or otherwise, by the plan for the benefit of, or on behalf of, a plan participant. The subrogation right attaches automatically as a lien against any proceeds received by the plan participant from a third-party tortfeasor for the cost of care or treatment for any injury or illness caused by the third-party tortfeasor for which medical payment is provided.(c) The plan has a right of reimbursement from any plan participant for the cost of care or treatment for any injury or illness caused by a third-party tortfeasor for which medical payment is provided, contractual or otherwise, by the plan for the benefit of, or on behalf of, a plan participant. The reimbursement right attaches automatically as a lien against any proceeds received by the plan participant from a third-party tortfeasor for the cost of care or treatment for any injury or illness caused by the third-party tortfeasor for which medical payment is provided. The right of reimbursement is contingent upon: (1) The plan stipulating that the reimbursement proceeds be held for the exclusive purpose of providing benefits to plan participants and their beneficiaries; and(2) The plan stipulating that the plan waives its right of reimbursement when the plan participant is adjudged permanently disabled and thereby receives corresponding benefits from the social security administration or suffers a catastrophic loss, including, but not limited to, death; long-term or permanent disability; loss of a limb, extremity, or eye; permanent loss of fifty percent (50%) or more of sight or hearing; a prolonged vegetative state; permanent mental impairment; protracted and complex recovery requiring multiple or successive surgeries; or any other similar, life-altering loss.(d) A plan is not required to choose between the plan's right of subrogation or right of reimbursement. However, once the plan has received the total amount of medical payments made on behalf of a plan participant, whether under a right of subrogation or a right of reimbursement, the plan's subrogation and reimbursement interests are extinguished.(e) The plan may elect, on a case by case basis, whether to waive its subrogation or reimbursement interests. If the plan elects to waive one (1) interest, the waiver does not extinguish the other. If the plan elects to waive either its subrogation or reimbursement interests, the plan shall promptly notify the insured or the insured's attorney, in writing sent by certified mail with either return signature or electronic receipt.(f) The plan shall not withdraw or reduce payments to a provider of medical services in order to recover funds obtained by a plan participant from a third-party tortfeasor or third-party insurer for medical services rendered by the medical-services provider if the plan has reason to know that the funds were obtained without the knowledge or direct assistance of the provider.(g) If the plan asserts its right to subrogation or reimbursement, the plan shall clearly state the assertion in plain language in the SPD, informing the primary insured of the plan's rights of recovery against third parties and plan participants, and that the primary insured should seek the advice of an attorney regarding those rights of recovery to which the plan may be entitled.(h) If a plan has a third-party administrator, recovery for any benefits incorrectly paid must be exclusively from such third-party administrator.Added by 2021 Tenn. Acts, ch. 360, s 3, eff. 7/1/2021.