The Supreme Court of Arizona Holds That Hospitals May Not Use Liens Against Third-Party Tortfeasors to Balance Bill Medicaid Patients

On March 9, 2020, the Supreme Court of Arizona issued its ruling in Ansley, et al. v. Banner Health Network, et al., 2020 WL 1126300 (2020), finding that hospitals may not utilize Arizona Revised Statutes § § 33-931(A) and 36-2903.01(G)(4) to secure liens against third-party tortfeasors in order to balance bill patients for medical bills beyond the negotiated reimbursements provided by Medicaid. The Plaintiffs consisted of patients covered by the Arizona Health Care Cost Containment System (“AHCCCS”), Arizona’s Medicaid agency, who were treated at the defendant hospitals. After AHCCCS negotiated payments to the hospitals on behalf of the patients, the hospitals placed a lien on the third-party tortfeasors who caused the patients’ injuries in order to “recover the remainder of their customary fees” beyond AHCCCS’ reimbursement. Plaintiffs filed the class action lawsuit against the hospitals alleging that 42 U.S.C. § 1396a(a)(25)(C) and 42 C.F.R. § 447.15 (federal Medicaid law and regulations), prohibited hospitals from balance billing patients, or in other words, collecting payments beyond reimbursement from AHCCCS. Hospitals previously operated in accordance with A.R.S. § 33-931(A), which provides that medical providers are “entitled to a lien for the care and … Continue reading

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