This article has been published in “The Advocate”, a monthly publication of the Arizona Association for Justice/Arizona Trial Lawyers Association, March – April 2014 issue, @2014 by Steven J. Bruzonsky, Esq.
Updates On Various Types of Lien Issues
AHCCCS Liens: Do contracted AHCCCS healthcare providers have to bill AHCCCS, or may they elect instead to assert a lien whether by filing an A.R.S. §33-931 lien or by having patient sign a consensual written lien) against the personal injury settlement?
In Puch v. Key Health, 1 CA-CV 12-0578 (Arizona Court of Appeals, Division 1, Oct. 31, 2013) (an unpublished Memorandum Decision, see Arizona Supreme Court Rule 111(c) for limitation on citing as precedent): Puch was injured in an auto accident. Puch was extended AHCCCS coverage while in the hospital, which referred Puch to Insight-Biltmore Advanced Imaging Center (“Insight”) for radiology studies, and Puch’s AHCCCS billing information was provided to Insight. Insight also had Puch sign a written consensual lien in favor of Key Health, as assignee of Insight. As Key Health had purchased the account from Insight. Puch brought an interpleader in Maricopa County Superior Court, with Key Health counterclaiming for breach of contract.
On cross motions for summary judgment (MSJ), the trial court granted Puch’s motion finding that Key Health, as assignee, stepped into the shoes of Insight and was expressly prohibited by contract and regulation from attempting to bill, charge or collect from Puch. The Arizona Court of Appeals affirmed the trial court’s summary judgment in favor of Puch and awarding attorney’s fees and costs to Puch.
Arizona Administrative Code (A.A.C.) R9-22-702 provides that “(r)egistered providers must accept payment from the Administration or a contractor as payment in full”; that a “registered provider shall not request or collect payment from, refer to a collection agency, or report to a credit reporting agency an eligible person or a person claiming to be an eligible person” except “(t)o collect the copayment described in R9-22-711” or “to recover from a member that portion of a payment made by a third party to the member for an AHCCCS covered service if the member has not transferred the payment to the Administration or the contractor as required by statutory assignment of rights to AHCCCS”; and that “registered providers shall not bill a member when the provider could have received reimbursement from the Administration or a contractor but for the provider’s failure to file a claim in accordance with the requirements of AHCCCS statutes, rules, the provider agreement, or contract”.
AHCCCS Liens: Do the Bipartisan Budget Act of 2013 amendments pertinent to Medicaid liens effectively reverse the U.S. Supreme Court mandate in Ahlborn and Wos that Medicaid liens must be compromised pro rata based on amount collected vs. “full value”?
The Bipartisan Budget Act of 2013 amendments pertinent to Medicaid liens are as follows: §202(b)(1)(B) amends 42 U.S.C. §1396a(a)(25)(H) to permit recovery not just for health care items or services, but for “any payments by such third party.” §202(b)(2) amends 42 U.S.C. §1396k(a)(1)(A) and replaces the provision for reimbursement "for medical care from any third party" with a provision for reimbursement of "any payment from a third party that has a legal liability to pay for care and services available under the plan." §202(b)(3) amends 42 U.S.C. §1396p(a)(1)(A) to permit Medicaid programs to place a lien against "rights acquired by or assigned to the State in accordance with section [1396a(a)(25)(H)] or section [1396k(a)(1)(A)]. §202(c) provides that these amendments take effect October 1, 2014.
The report describing the provisions of the Budget Act states that "Section 202 would affirm Medicaid's position as the payer of last resort by strengthening third-party liability to improve states' and providers' abilities to receive payments for beneficiary services, as appropriate." The report does not state that it reverses Ahlborn and Wos and does not mention the federal Medicaid anti-lien provision, 42 U.S.C. §§1396a(a)(18) and 1396p(a)(1), which prohibits States from imposing liens “against the property of any individual prior to his death on account of medical assistance paid . . . on his behalf under the State plan”. This federal Medicaid anti-lien provision was the statutory basis for Ahlborn and Wos.
Are Ahlborn and Wos still good law as of October 1, 2014? I anticipate that Medicaid and AHCCCS will not only take the position that Ahlborn and Wos and the federal Medicaid anti-lien provision are no longer legally effective as of October 1, 2014; but also that they will attempt to retroactively apply this to accidents/incidents which have occurred prior to October 1, 2014 as well. I anticipate that there will be litigation in the coming years over this issue.