§ 140.004.Contractual Subrogation Rights Authorized

The authorising provision, and the closing words are the whole of the bargain.

An issuer of a plan that may be obligated to make payments or provide medical or surgical benefits to or on behalf of a covered individual as a result of a personal injury caused by the tortious conduct of a third party may contract to be subrogated to and have a right of reimbursement for payments made or costs of benefits provided from the individual’s recovery for that injury — subject to this chapter.

Two distinct rights are named, and they are not the same thing. Subrogation puts the payor in the injured person’s shoes to pursue the tortfeasor. Reimbursement is a claim against the recovery once obtained. Plans typically contract for both.

"May contract" makes the right consensual. Texas gives a health plan no automatic subrogation right, so what the plan can recover depends on what its contract says — and a plan that omitted the clause recovers nothing.

"Subject to this chapter" is where the section gives with one hand and limits with the other. The contract creates the right; the chapter caps it, apportions fees out of it, and forbids pursuing certain funds.

So the parties cannot contract around the cap. A plan document purporting to take the entire recovery is authorised by this section only to the extent the recovery provision allows.

The section also confirms what the right attaches to: the individual’s recovery for that injury, not their assets generally.