This article has been published in “The Advocate”, a monthly publication of the Arizona Association for Justice/Arizona Trial Lawyers Association, March-April 2015 issue, @2015 by Steven J. Bruzonsky, Esq.
Hospital AHCCCS and Medicare Advantage Balance Billing
Hospital AHCCCS Balance Billing Class Action Litigation Status Update:
On November 7, 2014, Judge Gama issued a final Judgment in Winters v. Banner Health Network, CV 2012-007665, concerning the “Open-Lien Plaintiffs” (the class of plaintiffs with outstanding A.R.S. §33-931 hospital balance billing liens which had not been settled and for which a Lien Release had not been filed).
Judge Gama ruled as follows: (1) A.R.S. §36-2903.01(G)(4), which purports to allow a “hospital to collect any unpaid portion of its bill from other third-party payers or in situations covered by title 33, chapter 7, article 3,” is preempted by 42 U.S.C. § 1396a(a)(25)(C) and/or 42 C.F.R. §447.15; that the practice of the hospitals asserting liens pursuant to A.R.S. § 33-931, or any other state statute, after having received anypayment from AHCCCS for the patient’s care, is unlawful, and that such liens are void and unenforceable; and (2) That the hospitals are permanently enjoined from filing or asserting such liens after having received any payment from AHCCCS for the patient’s care; that the hospitals are ordered to release and discharge all Open Liens on which the hospital has had contact with a patient, attorney or insurance carrier adjuster within ten calendar days of this Judgment; and that the hospitals are ordered to release and discharge all Open Liens within five calendar days of this Judgment after oral or written request; However, Judge Gama stated that the Court is not making a determination at this time whether the hospitals are required to bill AHCCCS where a patient is eligible or enrolled in the AHCCCS program.
On November 26, 2014, the defense filed a motion for a new trial under Rule 59(a)(8) claiming that the Court’s Judgment on the preemption claim and on Plaintiffs’ application for attorneys’ fees are “contrary to law”. The Court’s ruling on this motion is pending.
On December 23, 2014, Division One, Arizona Court of Appeals, published its decision in Abbott v. Banner Health Network. This is the Rule 54(b) appeal in Winters v. Banner Health Network, CV 2012-007665 of Judge Gama’s Minute Entry, dated September 27, 2012, which held that the “Closed-Lien Plaintiffs (the fifteen plaintiffs who had settled their hospital AHCCCS balance billing liens with the hospitals filing Lien Releases) had entered into an “accord and satisfaction”, that the settlements were final and binding, and that these claims were dismissed. Division One reversed and remanded, holding that federal law preempted state law, which purports to allow balance billing, and that "[s]ince the liens themselves are void under federal law, the accord and satisfaction agreements are also unenforceable."
AHCCCS Providers Must Bill AHCCCS:
On October 31, 2013, the Division One, Arizona Court of Appeals, issued a Memorandum Decision (unpublished, not to be cited as authority per Rule 11, Rules of the Arizona Supreme Court) in Puch v Key Health Medical Solutions, 1 CA-CV 12-0578.Division One held that an AHCCCS provider must bill AHCCCS for care of an AHCCCS patient. The Court emphasized that Arizona Administrative Code (AAC) R9-22-702 provides that an AHCCCS provider may not "charge, collect or attempt to collect" against anyone who is or claims to be AHCCCS eligible - except that the patient may be charged the copayment is there is one; and that Section 15 of the Provider Participation Agreement (PPA) states the same.