Robinett v. Shelby County Healthcare Corporation et al
ORDER: The settlement proceeds are the fund for paying The Med's bill. The amount due is a matter of Tennessee law, including the lien statute, not the amount The Med would have to accept if Arkansas's Medicaid program were paying for Robi nett's care. Motions 23 and 24 granted. Robinett's complaint will be dismissed with prejudice, with one carve out. The dismissal is without prejudice to later adjudication, if need be, of all lien particulars under Tenn. Code Ann.§ 29-22-102. Signed by Judge D. P. Marshall Jr. on 1/31/2017. (jak)
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
LACEY ROBINETT, Individually and
on behalf of all others similarly situated
SHELBY COUNTY HEALTHCARE
CORPORATION, dfb/a Regional One
Health and dfb/a Regional Medical Center;
and A VECTUS HEAL TH CARE
1. Who pays? And how much? These are the deep questions raised by
The Med' s emergency care of Lacey Robinett after a car wreck; her eventual
settlement with the other driver's insurance company; and The Med' s effort
to collect the rack rate for its services from that settlement, rather than seeking
or accepting payment from Medicaid at that program's reduced rate. Robinett
is an Arkansas Medicaid participant. She was involved in a car wreck in
Lawrence County, Arkansas, then airlifted to The Med in Memphis, the
trauma center for the region.
Decades ago, The Med agreed to participate in Arkansas's version of
Medicaid. NQ 11-3. Among other things, The Med agreed "to accept payment
from Medicaid as payment in full for a covered service, and to make no
additional charges to the patient or accept any additional payment from the
patient for that service which is covered under the Medicaid Program, [and]
to take assignment and file claim with third party sources (Medical, liability
insurance, etc.), and if third party payment is made to the Provider, reimburse
Medicaid up to the amount Medicaid paid for the services[.]" Ibid.
Neither Robinett nor a family member signed The Med' s admission
agreement. Someone, presumably The Med employee who handled the
paperwork, wrote in "Pt unable to sign Due to Medical Condition." Ng 11-1.
The parties seem to agree, though, that Robinett assented to the admission
agreement. NQ 11 at if 12; Ng 17 at if 12; NQ 18 at if 12. It contains waterfront
assignments-of health insurance benefits, other insurance benefits, and
claims for payment that I am entitled to or are otherwise due or payable to
me or my estate from any additional source for hospitalization and/ or other
clinical expenses." Ng 11-1.
The agreement mentions a resulting lien. But apart from any contract
between Robinett and The Med, when the hospital provided these medical
services, a lien arose under Tennessee law. "Every [entity] ... operating and
maintaining a hospital in this state, shall have a lien for all reasonable and
necessary charges for hospital care, treatment and maintenance of ill or
injured persons upon any and all causes of action, suits, claims, counterclaims
or demands accruing to the person to whom such care ... was furnished, ...
on account of illness or injuries giving rise to such causes of action or claims
and which necessitated such hospital care, treatment and maintenance."
TENN. CODE ANN.§ 29-22-lOl(a). The Med, the parties seem to agree, gave
notice of its lien with a public filing. The lien asserted was for $23,750.54-the
amount The Med would have charged a patient who was paying out of
pocket for the care provided to Robinett. The Med didn't seek payment from
Medicaid. It stood on its lien and assigned its rights to A vectus, a medical bill
Robinett eventually settled with the other driver's insurance company
for $100,000. Avectus demanded the $23,750.54. As best the Court can tell,
the settlement proceeds remain in limbo. Robinett filed this case, asserting
many claims, on behalf of herself and others similarly situated. She says the
hospital's maneuver violated Federal and Arkansas Medicaid law, offended
several Arkansas statutes, broke contracts touching the disputes, amounted
to unjust enrichment and conversion, and was a conspiracy with Avectus.
The core of Robinett's argument is that, because she's Medicaid eligible and
The Med is a participating provider, she owes from the settlement, at most,
the amount Medicaid would have paid the hospital. The Med and Avectus
respond that they did nothing wrong: Instead of taking a certain but reduced
payment from Medicaid, they say they gambled on Robinett's potential
recovery from a third party, and won.
2. The Med and Avectus are entitled to judgment on the pleadings.
FED. R. CIV. P. 12(c); Poehl v. Countrywide Home Loans, Inc., 528 F.3d 1093, 1096
(8th Cir. 2008). Nothing in federal or Arkansas law prohibited The Med's
maneuver in the circumstances presented.
Federal law prevents providers from pursuing Medicaid beneficiaries
except in limited circumstances. 42 U.S.C. § 1396a(a)(25)(C); Wesley Health
Care Center, Inc. v. DeBuono, 244 F.3d 280, 281-83 (2d Cir. 2001). The whole
point of the statutory scheme is that The Med must, instead, accept what
Arkansas (subsidized by federal dollars) is willing to pay. 42 C.F.R. § 447.15.
But when third parties are potentially responsible, two tangles (one federal
and one state) of statutory provisions and regulations come into play. The
parties have described and ably argued from all these. But The Med and
Avectus offer the better reading of the applicable fed eral provisions: The
premise of an obligation to accept the Medicaid-set amount for care is the
submission to, and payment by, Medicaid of the bill.
§ 1396a(a)(25)(B) & (H) & (I)(ii). That's the operative action under the statute.
The state agency must pursue reimbursement from a potentially liable third
party after payment has been made under the state plan. Ibid; see also 42 C.F.R.
§ 433.139(d)(2). Before that, the billing decision is in the provider's hands.
The statute's implementing regulations contemplate that a provider might
pursue a third party, and that a state plan could require a provider to do so,
42 C.F.R. § 433.139(b)-(d).
And some state plans do. E.g., LA. REV. STAT.
ANN.§ 46:437.12(A)(6); N.Y. COMP. CODES R. & REGS. tit. 18 § 540.6(e)(2).
Arkansas law doesn't bar The Med' s maneuver either. It bars substitute
billing (billing the patient after the provider has agreed to accept payment
from Medicaid) and double billing (billing Medicaid and the patient). ARK.
CODE ANN.§ 20-77-104 & § 20-77-105. Robinett argues that if the law allows
The Med and Avectus to assert a lien for more than the Medicaid rate on
settlement proceeds from a third party, then-in truth-they're directly
billing her, and she will pay more than Medicaid's reimbursement rate. And
she points out that the state statute prohibits payment by a Medicaid
participant of an amount higher than the provider agreed to accept from
Medicaid. The Med and Avectus respond that Arkansas law prohibits a
provider from billing a Medicaid patient only if the provider has already
billed Medicaid. They say a provider-even though it's agreed to participate
in Arkansas Medicaid-hasn't "agreed to accept" payment from Medicaid
unless and until it has billed Medicaid. ARK. CODE ANN.§ 20-77-104(c). The
provider doesn't agree to accept the reduced amount from all the world, they
continue, merely by participating in the state program.
The closest precedent, though it's not binding, is Miller v. Gorski
Wladyslaw Estate, 547 F.3d 273 (5th Cir. 2008). The Fifth Circuit analyzed the
federal law carefully and rejected a nearly identical challenge to Baton Rouge
General Hospital's pursuit of payment through lien instead of seeking or
receiving payment by Medicaid. The Second, Sixth, and Seventh Circuits had
each suggested in dicta, in similar disputes, that a health care provider could
go this route-so long as it hadn't sought or accepted the Medicaid payment
for a particular patient's care. Spectrum Health Continuing Care Group v. Anna
Marie Bowling Irrevocable Trust Dated June 27, 2002, 410 F.3d 304, 315 (6th Cir.
2005); Wesley, 244 F.3d at 283 n.1; Evanston Hospital v. Hauck, 1 F.3d 540,
542-43 (7th Cir. 1993). The Court has looked for, but not found, any case,
federal or state, that has adopted Robinett's reading of the federal law on
point or a state Medicaid statute similar to Arkansas's. None of the parties
has pointed the Court to such a case.
Whether The Med' s provider agreement with Arkansas Social Services
(which administered Arkansas Medicaid at the time of the agreement) is a
contract or not isn't dispositive. Compare Spectrum, 410 F.3d at 315, with
Tuoheyv. Chenal Healthcare, LLC, 173 F. Supp. 3d 804, 811-12 (E.D. Ark. 2016),
and Southeast Arkansas Hospice, Inc. v. Sebelius, 1 F. Supp. 3d 915, 925-26 (E.D.
Ark. 2014). The provider agreement is silent about The Med's choice to forego
a certain but reduced Medicaid payment in hopes of getting more by lien
from Robinett and the other driver. So, too, the admission agreement.
Whether or not Robinett and The Med made that contract, Tennessee law
gave the hospital a lien when the care was given. TENN. CODE ANN.§ 29-22101(a).
claims-statutory, common law, and restitutionary-travel with the Medicaid
issues. Therefore, they fail too.
3. Robinett's complaint will be dismissed with prejudice, with one carve
out. She has not pleaded or argued the various issues that may exist under
the Tennessee statute about the lien-the niceties of filing, priority, and
amount. None of the related facts have been disputed or decided. The
dismissal is therefore without prejudice to later adjudication, if need be, of all
lien particulars under Tenn. Code Ann.§ 29-22-102.
The settlement proceeds are the fund for paying The Med' s bill. The
amount due is a matter of Tennessee law, including the lien statute, not the
amount The Med would have to accept if Arkansas's Medicaid program were
paying for Robinett's care. Motions, NQ 23 & 24-2, granted.
D.P. Marshall Jr.
United States District Judge
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