Geoff Trachtenberg Levenbaum Trachtenberg, PLC

Walking Dead
Balance
Liens: Billing
Geoff Trachtenberg
Levenbaum Trachtenberg, PLC
Tuesday, January 27, 15
Balance Billing
What is Balance Billing?
“‘[B]alance billing’ occurs when a
provider . . . charges or collects . . . an
amount in excess of the amount that is
reimbursable under the applicable
health insurance plan.” David J.
Marchitelli, Annotation, Propriety and
Use of Balance Billing in Health Care
Context, 69 A.L.R. 6th 317 n.1 (2011).
The bill was paid.
Balance bills rise from the dead.
It’s Zombie Billing.
Tuesday, January 27, 15
Balance Billing
Most Common Form:
The Healthcare
Provider Lien Statute
A.R.S. § 33-931, et seq.
But Do Not Call These
“Balance Billing Liens.”
Healthcare Provider Liens are not
necessarily “balance billing” liens.
And, as we will see, they should
never be “balance billing” liens.
Tuesday, January 27, 15
Zombie Billing
I. “Private Health Insurance”
II. “Government Health Insurance”
⌖ Medicare
⌖ Original Medicare (Part A and B)
⌖ Medicare Advantage (Part C)
⌖ Medicaid / AHCCCS
⌖ TriCare / ChampVA
⌖ FEHBA
Tuesday, January 27, 15
Balance Billing
Blankenbaker v. Jonovich,
205 Ariz. 383, ¶13 (2003).
“[T]he underlying purpose of the health care
provider lien statutes . . . [is] to ‘lessen the burden
on hospitals and other medical providers
imposed by non-paying accident cases.’”
The Healthcare Provider Lien
Statutes, A.R.S. § 33-931, et seq.,
were never intended to support
“balance billing” zombie liens.
They were intended for “non-paying” accident cases.
So how did we get here?
Tuesday, January 27, 15
Balance Billing
“A substantial portion of our practice assists our clients in
obtaining payment[s] . . . [via healthcare provider liens]
from . . . liable third parties subject to Arizona’s
healthcare provider lien statute.”
Tuesday, January 27, 15
Balance Billing
“A substantial portion of our practice assists our clients in
obtaining payment[s] . . . [via healthcare provider liens]
from . . . liable third parties subject to Arizona’s
healthcare provider lien statute.”
Tuesday, January 27, 15
Balance Billing
“A substantial portion of our practice assists our clients in
obtaining payment[s] . . . [via healthcare provider liens]
from . . . liable third parties subject to Arizona’s
healthcare provider lien statute.”
Third parties are never
liable to private healthcare
providers for patient care
or hospitalization.
The debt owed by a
patient to a hospital is
the foundation of the
hospital's lien right.
No debt? No lien.
A private healthcare provider has no independent
cause of action against a third-party tortfeasor.
This contention is hokum.
Tuesday, January 27, 15
Balance Billing
Oral Argument: Abbott v. Banner Health Network,
Case No. 1 CA-CV 13-0259 (April 10, 2014)
Hon. Patricia K. Norris
Cameron C. Artigue, Esq.
“‘[O]nce the settlement has been approved,
the settlement proceeds are no longer the
property of the tortfeasor… Instead, the
entirety of the settlement, regardless of how it
is allocated, belongs to [the injured person];
[the health care provider’s] lien is merely an
encumbrance upon that [person’s] property.’”
Spectrum Health v. Anne Marie Bowling,
410 F.3d 304 (6th Cir. 2005)
Healthcare Provider Lien collections are
clearly collections from the patient.
Tuesday, January 27, 15
Zombie Billing
I. “Private Health Insurance”
Tick. Tock.
II. “Government Health Insurance”
⌖ Medicare
⌖ Original Medicare (Part A and B)
Aycock
⌖ Medicaid / AHCCCS Winters / Abbott
⌖ Medicare Advantage (Part C)
⌖ TriCare / ChampVA
⌖ FEHBA
Tuesday, January 27, 15
Aycock v. Scottsdale Healthcare, Corp.
Class action lawsuit against Arizona hospitals
for balance billing Medicare Advantage patients.
Consent Judgments against:
The Consent Judgments and
Consent Agreements all preclude
the hospitals from using
healthcare provider liens against
MA patients to balance bill.
But on one of them, G&B
couldn’t help themselves ...
Scottsdale Healthcare Hospitals
John C. Lincoln Health Network
Dignity Health
Consent Agreements with:
Banner Health Network
Tucson Medical Center
Website: YouOnlyBillOnce.Com
Tuesday, January 27, 15
Aycock v. Scottsdale Healthcare, Corp.
Class action lawsuit against Arizona hospitals
for balance billing Medicare Advantage patients.
Consent Judgments against:
The Consent Judgments and
Consent Agreements all preclude
the hospitals from using
healthcare provider liens against
MA patients to balance bill.
But on one of them, G&B
couldn’t help themselves ...
Scottsdale Healthcare Hospitals
John C. Lincoln Health Network
Dignity Health
Consent Agreements with:
Banner Health Network
Tucson Medical Center
Website: YouOnlyBillOnce.Com
Tuesday, January 27, 15
Abbott v. Banner Health Network,
__ P.3d __, 2014 WL 7331031 (App. 12/23/2014)
Class action lawsuit against Arizona hospitals
for balance billing Medicaid / AHCCCS patients.
I. Holdings
a) Held: Federal law, prohibiting balance billing AHCCCS
patients, preempted a state statute that purported to allow
hospitals to balance bill using healthcare provider liens.
b) Held: PPAs signed by the hospitals to participate in the
AHCCCS program, which reference AHCCCS regulations that
prohibit “charging or collecting from patients,” precluded the
hospitals from using the healthcare provider lien statute to
balance bill AHCCCS patients.
Tuesday, January 27, 15
Abbott v. Banner Health Network,
__ P.3d __, 2014 WL 7331031 (App. 12/23/2014)
Class action lawsuit against Arizona hospitals
for balance billing Medicaid / AHCCCS patients.
I. Holdings (continued)
c) Held: Enforcing a healthcare provider lien against a patient’s
injury recovery is “charging or collecting from the patient.”
d) Held: In light of both federal law and the PPAs, there was
“no good faith dispute” about the validity of the hospitals’ liens,
so that payments made to the hospitals to obtain lien releases
did not qualify as an “accord and satisfaction.”
Tuesday, January 27, 15
Abbott v. Banner Health Network,
__ P.3d __, 2014 WL 7331031 (App. 12/23/2014)
II. What happened to Winters?
a) “Open Lien Plaintiffs” (we call this “Winters”)
b) “Closed Lien Plaintiffs” (we call this “Abbott”)
c) It’s all the same case.
III. What’s happening in the case now?
a) “Open Lien Plaintiffs” - Judgment / Injunction / Appeal?
b) “Closed Lien Plaintiffs” - Remand / Petition for Review
Website: LienFall.Com
Tuesday, January 27, 15
Lets talk about Tax.
What happened to Section 501(r)?
That was the ACA provision that was supposed to
protect vulnerable uninsured patients from charitable
hospitals’ “extraordinary collection actions.”
Based on now-final Regulations, it turns out that,
while asserting liens against a patient’s property is
an “extraordinary collection action,” asserting a lien
against that patient’s settlement recovery is not.
79 FR 789854 (12/31/14) - Section 1.501(r)-6(b)(3)
Tuesday, January 27, 15
Lets talk about Tax.
What happened to Section 501(r)?
That was the ACA provision that was supposed to
protect vulnerable uninsured patients from charitable
hospitals’ “extraordinary collection actions.”
Based on now-final Regulations, it turns out that,
while asserting liens against a patient’s property is
an “extraordinary collection action,” asserting a lien
against that patient’s settlement recovery is not.
79 FR 789854 (12/31/14) - Section 1.501(r)-6(b)(3)
Tuesday, January 27, 15
Lets talk about Tax.
What happened to Section 501(r)?
That was the ACA provision that was supposed to
protect vulnerable uninsured patients from charitable
hospitals’ “extraordinary collection actions.”
Based on now-final Regulations, it turns out that,
while asserting liens against a patient’s property is
an “extraordinary collection action,” asserting a lien
against that patient’s settlement recovery is not.
79 FR 789854 (12/31/14) - Section 1.501(r)-6(b)(3)
Tuesday, January 27, 15
Andrews v. Samaritan Health Sys., 36 P.3d 57
(App. 2001) disapproved of in Blankenbaker v.
Jonovich, 71 P.3d 910, 914 (2003)
Overruled by
Abbott v. Banner Health Network,
__ P.3d __, 2014 WL 7331031 (App. 12/23/2014)
¶23 “[E]nforcing liens for further payments
from third-party recoveries obtained by . . .
patients [is not] distinguishable from enforcing
the liens against the patients themselves.”
As Judge Norris explains . . . .
“‘[O]nce the settlement has been approved,
the settlement proceeds are no longer the
property of the tortfeasor… Instead, the
entirety of the settlement, regardless of how it
is allocated, belongs to [the injured person];
[the health care provider’s] lien is merely an
encumbrance upon that [person’s] property.’”
UnfrozenCavemanLawyers.com
Tuesday, January 27, 15
Lopez v. Morley, 817 N.E.2d 592, 599 (Ill.App. 2004)
Palumbo v. Myers, 149 Cal.App.3d 1020 (Cal.App. 1983)
Public Health Trust v. Dade Cty. Sch., 693 So.2d 562 (Fla.App. 1996)
Maxwell v. South Miami Hosp. Foundation, Inc., 385 So.2d 127 (Fla.App. 1980)
Dorr v. Sacred Heart Hosp., 597 N.W.2d 462 (Wis.App. 1999)
Morgan v. St. Luke’s Hosp. of Kansas City., 403 S.W.3d 115 (Mo.App. 2013)
Lizer v. Eagle Air Med. Corp., 308 F.Supp.2d 1006 (D.Ariz. 2004)
Taylor v. Louisiana DHH, 7 F.Supp.3d 641 (M.D. La. 2013)
Wright v. Smith, 641 F.Supp.2d 536 (W.D.Va. 2009)
Satsky v. U.S., 641 F.Supp. 1027 1028-29 (S.D. Tx. 1998)
Mallo v. Public Health Trust of Dade Cty., 88 F.Supp.2d 1376 (S.D. Fl. 2000)
Miller v. Gorski Wladyslaw Estate, 547 F.3d 273 (5th Cir. 2008)
Spectrum Health v. Anne Marie Bowling, 410 F.3d 304 (6th Cir. 2005)
Evanston Hosp. v. Hauck, 1 F.3d 540 (7th Cir. 1993)
Parnell v. Adventist Health Sys./West, 109 P.3d 69, 71-75 (Cal. 2005)
Olszewski v. Scripps Health, 69 P.3d 927 (Cal. 2003)
Smallwood v. Central Pen. Gen., 151 P.3d 319 (Alaska 2006)
Midwest Neurosurgery, P.C. v. State Farm Ins. Cos., 686 N.W.2d 572 (Neb. 2004)
Bynum v. Magno, 101 P.3d 1149 (Hi. 2004)
Gister v. American Family Mut. Ins. Co., 818 N.W.2d 880 (Wis. 2012)
Via Christi Reg. Med. Center, Inc. v. Reed, 2013 WL 6714017 (Kan. 2013)
MCG Health, Inc. v. Owners Ins. Co., 707 S.E.2d 349 (Ga. 2011)
Wright v. First Nat. Bank in Albuquerque, 941 P.2d 498, 500-01 (N.M.1997)
West v. Shelby Cnty. Healthcare Corp., No. W2012-00044-COA-R3-CV,
2013 WL 500777 *23 (Tenn. App. Feb. 11, 2013), aff ’d in part, rev’d in
part on other grounds, 2014 WL 7242746 (Tenn.).