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(1) If the Department has not assigned a lien to a prepaid managed care health services organization (organization) or if the organization failed to perfect its assigned lien, the Department may release or compromise its lien — for the amount of the settlement, compromise, or judgment that is subject to the lien — and distribute collections under its lien as follows:
(a) To the Department, an amount equal to the State share of Department's assistance expenditures for the amount of the settlement, compromise, or judgment that is subject to the lien.
(b) To the federal government, the federal share of the Department's assistance expenditures for the amount of the settlement, compromise, or judgment that is subject to the lien, pursuant to applicable law.
(c) To the recipient, any remaining amount after distributions provided for in subsections (a) and (b) of this section. The amount distributed to the recipient must be treated as income or resources consistent with applicable law.
(2) If the Department has assigned a lien to a prepaid managed care health services organization (organization) and the organization properly perfected its lien, the Department and the organization may release or compromise and distribute collections under the liens for the amount of the settlement, compromise, or judgment that is subject to the lien, consistent with OAR 461-195-0305(5), as follows:
(a) To the Department, an amount equal to the State share of assistance and the federal share of medical assistance expenditures for the amount of the settlement, compromise, or judgment that is subject to the lien.
(b) The Department will reimburse to the federal government, the federal share of the State assistance expenditures for the amount of the settlement, compromise, or judgment that is subject to the lien for which federal match was claimed by the Department.
(c) To the organization, the assistance expenditures subject to the lien by the organization except as otherwise provided in subsections (a) and (b) of this section.