31 Del. C. § 522

(a) Subrogation is defined as the doctrine of law which enables insurers to recover payments from any third party who is responsible for an injury. In any claim for benefits by a recipient who receives medical care under this title, where the recipient has a cause of action against any other person, the Department of Health and Social Services shall be subrogated against (substituted for) the recipient to the extent of any payment made by the Department of Health and Social Services on behalf of the recipient receiving medical care, resulting from the occurrence which constituted the basis for the action against the other person.

(b) After the deduction of applicable attorney fees and litigation costs, any funds received by an individual who has received medical care under this title, the individual’s attorney or the individual’s guardian or personal representative, by means of judgment, award or settlement of the cause of action, shall be held for the benefit of the Department of Health and Social Services to the extent indicated in subsection (a) of this section.

(c) If, after being notified in writing of a subrogation claim and possible liability under this section, a recipient receiving medical care under this title, recipient’s attorney or recipient’s guardian or personal representative disposes of funds that are required to be held for the benefit of the Department under this section without the written approval of the Department, that recipient shall be liable to the Department for any amount that, as a result of the disposition of the funds, is not recoverable by the Department.

(d) The Department may compromise, settle and release a subrogated claim if the Department determines that collection would result in substantial hardship on the recipient receiving medical care or, in a wrongful death action, on the surviving dependents of the deceased.