This article has been published in “The Advocate”, a monthly publication of the Arizona Association for Justice/Arizona Trial Lawyers Association, May – June 2014 issue, @2014 by Steven J. Bruzonsky, Esq.
May/June 2014 Lien Updates
Hospital AHCCCS Balance Billing Litigation Status:
The Honorable J. Richard Gama, Maricopa County Superior Court, issued an Under Advisement Ruling on January 17, 2014, in Winters v. Banner Health Network, CV 2012-007665, granting Plaintiff’s Motion for Summary Judgment and denying Defendants’ Cross-Motion for Summary Judgment, holding that federal Medicaid law prohibits AHCCCS balance billing by the hospitals, and that Arizona law which permits such balance billing and liens is preempted by federal Medicaid law. Hospitals file liens with the County Recorder under A.R.S. §33-931 et seq and claim a lien against the injured patient’s personal injury or medical malpractice claim for the amount of the total medical bill less the amount paid by AHCCCS. A.R.S. §36-2903.01(G)(4) provides that a hospital may collect full payment from Medicaid and thereafter collect any unpaid portion of its bill from other third-party payors or in situations covered by A.R.S. §33-931 et seq. 45 C.F.R. §447.15 (formerly 45 C.F.R. §249.31) has long provided that “A State plan must provide that the Medicaid agency must limit participation in the Medicaid program to providers who accept, as payment in full, the amounts paid by the agency plus any deductible, coinsurance or copayment required by the plan to be paid by the individual.” Also, 42 U.S.C. §1396a(a)(25)(C) provides that the healthcare provider in third party cases may not seek to collect from the patient (or financially responsible relatives, etc) “payment of an amount for that service (i) if the total of the amount of the liability of third parties for that service is at least equal to the amount payable for that service under the plan . . .” The Court rejected the hospitals’ contention that the enforcement of a health care provider lien is not balance billing because it is a collection from the third party tortfeasor, not from the Medicaid patient, citing Lizer v. Eagle Air Med Corp., 308 F. Supp. 2d 1006 (D. Ariz. 2004) (federal Medicaid law prohibits and preempts A.R.S. §33-931 et seq healthcare provider liens and balance billing for an air ambulance provider), and citing consistent decisions in other jurisdictions. A proposed Judgment has been filed. Obviously this decision will be appealed.
AHCCCS Liens: The effective date of the Bipartisan Budget Act of 2013 amendments intended to negate the U.S. Supreme Court mandate in Ahlborn andWos are delayed by two years and will not take effect until October 2016.
As discussed last issue, the Bipartisan Budget Act of 2013 amendments pertinent to Medicaid liens essentially gut the U.S. Supreme Court holdings in Ahlborn and Wos so that AHCCCS & Medicaid will be entitled to full lien reimbursement regardless that the injury or medical malpractice claim settled for less or even far less than its “full value”. Originally, this change to the law is implemented and effective October 1, 2014. However, Congress has passed a bill known as the “doc fix” or SGR (Sustainable Growth Ratewhich extends the pay rate for physicians who treat Medicare patients, and Section 211 of this bill stikes the date of “October 1, 2014” and inserts “October 1, 2016” as the date that that the above Bipartisan Budget Act of 2013 Medicaid amendment is implemented.