A. Each individual or group contract or certificate that is delivered, issued for delivery or renewed in this state shall include provisions that require any indemnity benefits payable by a health maintenance organization on behalf of an enrollee under the contract or certificate to be paid to the human services department [health care authority department] when:

(1)     the human services department [health care authority department] has paid or is paying benefits on behalf of the enrollee under the state’s medicaid program pursuant to Title XIX of the federal Social Security Act, 42 U.S.C. § 1396, et seq.;

(2)     payment for the services in question has been made by the human services department [health care authority department] to the medicaid provider; and

(3)     the health maintenance organization is notified that the enrollee receives benefits under the medicaid program and that any indemnity benefits payable by the health maintenance organization must be paid directly to the human services department [health care authority department].

B. The notice required under Paragraph (3) of Subsection A of this section may be accomplished through an attachment to the claim by the human services department [health care authority department] for any indemnity benefits payable by the health maintenance organization when the claim is first submitted by the human services department [health care authority department] to the health maintenance organization.

C. Notwithstanding any other provisions of law, checks in payment for claims for any indemnity benefits payable by a health maintenance organization pursuant to any individual or group contract or certificate for health care services provided to persons who are also eligible for benefits under the medicaid program and provided by medical providers not contracting with the health maintenance organization shall be made payable to the provider. The health maintenance organization may be notified that the enrollee is eligible for medicaid benefits through an attachment to the claim by the provider for health maintenance organization benefits when the claim is first submitted by the provider to the health maintenance organization.

D. No health maintenance organization group or individual contract or certificate delivered, issued for delivery or renewed in this state on or after the effective date of this section shall contain any provision denying or limiting health maintenance organization benefits because services are rendered to an enrollee who is eligible for or who has received medical assistance under the medicaid program of this state.

E. To the extent that payment for covered expenses has been made pursuant to the state medicaid program for health care items or services furnished to an individual, in any case where a health maintenance organization has a legal liability to make payments, the state is considered to have acquired the rights of the individual to payment by the health maintenance organization for those health care items or

services.