This article has been published in “The Advocate”, a monthly publication of the Arizona Association for Justice/Arizona Trial Lawyers Association, July-August 2016 issue, @2016 by Steven J. Bruzonsky, Esq.
July/August 2016 Lien Updates
Abbott v. Banner Health Network– The Arizona Supreme Court Issues Its Decision in This AHCCCS Hospital Balance Billing Controversy:
Division One, Arizona Court of Appeals, has issued its opinion, Kobold v Aetna, No. 1 CA-CV 12-0315 (3-31-2016), reconsidering whether or not FEHBA liens are legally enforceable in Arizona (as required by the U.S. Supreme Court), and has decided that Arizona anti-subrogation caselaw is preempted by federal law and the FEHBA, and thus FEHBA liens are legally enforceable in Arizona. Division One states therein: “In Kobold v. Aetna Life Ins. Co., 233 Ariz. 100 (App. 2013) ("Kobold I"), we held that 5 U.S.C. § 8902(m)(1) of the Federal Employee Health Benefits Act ("FEHBA") did not preempt Arizona law forbidding subrogation in personal injury cases. After the Arizona Supreme Court denied review, the Office of Personnel Management ("OPM") promulgated new regulations, set forth in 5 C.F.R. § 890.106, that construe § 8902(m)(1) to include subrogation and reimbursement terms in FEHBA contracts. In light of the new regulations, the United States Supreme Court vacated our opinion and remanded the case for reconsideration of the preemptive effect of the FEHBA. Aetna Life Ins. Co. v. Kobold, 135 S. Ct. 2886 (2015).1 We hold that the statutory interpretation embodied in the new federal regulations is entitled to deference in accordance with Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), and, accordingly, we are bound to interpret the FEHBA as preempting Arizona anti-subrogation law. We therefore reverse the superior court's entry of summary judgment for Kobold, and remand with instructions to grant Aetna's cross-motion for summary judgment.” Kobold’s attorneys advise that they are appealing this first to the Arizona Supreme Court, and then to the U.S. Supreme Court if necessary.