This article has been published in “The Advocate”, a monthly publication of the Arizona Association for Justice/Arizona Trial Lawyers Association, July – August 2014 issue, @2014 by Steven J. Bruzonsky, Esq.
July/August 2014 Lien Updates
Hospital AHCCCS Balance Billing Class Action Litigation Status Update:
Thanks to AzTLA members Geoff Trachtenberg and D. Lance Entrekin for this update on theWinters v. Banner Health Network, CV 2012-007665, hospital AHCCCS balance billing litigation in Maricopa County Superior Court.
On January 17, 2014, Judge Gama issued an Under Advisement Ruling 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.
On May 16, 2014, Judge Gama ruled as follows:
(1) Although the hospitals had agreed in writing not to "charge, collect, or attempt to collect" from AHCCCS patients and to comply with ACC R9-22-702, they were not in breach of contract because "at the time of contracting, A.R.S. §36-2903.01(G)(4), which allows hospitals to balance bill AHCCCS patients, was valid and enforceable" and that "A.R.S. §36-2903.01(G)(4) has not always been preempted, regardless of how clearly the Court's ruling was prophesied."
(2) Plaintiffs are to file a new judgment that precludes that hospitals from balance billing where they have received "any payment from AHCCCS" (as opposed to simply where the patient is AHCCCS eligible, see ACC R9-22-702) and ordered the hospitals to release "all known" liens against AHCCCS patients (where the hospitals has received any payment from AHCCCS) within 10 calendar days -or- within 5 calendar days "after an oral or written request."
(3) the hospitals asked that the judgment specifically state that the hospitals could "keep settling" these unlawful liens even after judgment is entered saying that the practice is unlawful. Judge Gama said “no” to this, since their appropriate remedy is to file for a stay, which in this case requires a $25 million bond under ARCP 7(a)(2), which they've not done as of yet.
Plaintiffs have submitted to Judge Gama a final Judgment that would enjoin the hospitals from filing liens against AHCCCS patients where the hospitals received "any payment" from AHCCCS and ordering the hospitals to release any such liens, once they are made aware of them, within 5 calendar days of a request.
How should you handle hospital AHCCCS balance billing liens for now? First, hospitals must release the liens only after Judge Gama enters a final Judgment requiring this. However, if the hospitals post the bond and obtain a stay of this upcoming injunction, then the hospitals may continue their practice to “keep settling” these balance billing liens pending their most certain appeal of this decision.