Governor vetoes bills including one limiting settlement funds

March 29--CHARLESTON -- Gov. Jim Justice vetoed a bill that would limit the Attorney General's use of settlement funds, saying the bill would "significantly delay any implementation of correcting the problem or redress of the damages awarded."

House Bill 4009 would have required the award or recovery of funds or assets as a result of a lawsuit or settlement to be deposited in the General Revenue Fund. Funds collected then would be dispersed only through a legislative appropriation.

"Although this bill was intended to disallow unfettered use of an officeholder's discretionary settlement funds, its application to the Executive Branch is ill-conceived and does not take into consideration the practical effect on an agency when actual monetary damages are incurred because of a breach of contract," Justice's veto message continued.

Justice used an example of a state agency bringing action against a contractor for damages if a roof being repaired was damaged in the process. In that instance, the agency would hire another contractor to repair the damages and complete the work, causing the agency to incur additional damages.

"The agency would be required to recover by court action, then the damages received for the roof are then deposited to the General Fund," Justice said in the veto message. "Under this bill, only in the event if the Legislature chose to re-appropriate, would the agency recover for its loss."

The governor said the bill did not allow for the return of any administrative costs on behalf of the state agency in a damage award to the state agency involved in the litigation or prosecution of the case. He said the lack of administrative costs contemplated in the bill could discourage state agencies from bringing lawsuits or assisting in the prosecution of cases in the future.

Justice also vetoed Senate Bill 442, which would have established universal forms and deadlines when submitting prior authorization electronically.

Under the bill, the Public Employees Insurance Agency, managed care organizations, and private commercial insurers are required to develop prior authorization forms, which would be prepared by Oct. 1, 2018. They then would accept electronic prior authorization requests and respond to the request electronically by July 1, 2019.

If the health care practitioner submitted the request for prior authorization electronically, the insurer or plan would respond to that request within 48 hours for urgent care services, or seven days for any prior approval request not for urgent care services. If the information is incomplete, the health care practitioner would have to provide additional information requested within 72 hours from the time the request is received by the practitioner or prior authorization is deemed denied and a new request must be submitted.

The West Virginia State Medical Association issued a statement in response to the governor's veto, saying the medical community was "deeply disturbed by this action."

"The West Virginia State Medical Association worked diligently to ensure that this bill would pass," Dr. Brad Henry, president of the West Virginia State Medical Association, said in the news release. "There were no indications based on votes in both chambers that there were any problems with the bill.

"Out patients and our practices cannot tolerate the prior authorization regulations as they stand. We worked for improvements, we obtained them, and then all our hard work was discarded."

Email: alannom@register-herald.com; follow on Twitter @AndreaLannom

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