United States District Court, E.D. Arkansas, Jonesboro Division
LACEY ROBINETT, Individually and on behalf of all others similarly situated PLAINTIFF
SHELBY COUNTY HEALTHCARE CORPORATION, d/b/a Regional One Health and d/b/a Regional Medical Center; and AVECTUS HEALTHCARE SOLUTIONS LLC DEFENDANTS
Marshall Jr. United States District Judge
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.
ago, The Med agreed to participate in Arkansas's version
of Medicaid. No H-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[.]"
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." Nsll-1, The parties seem to
agree, though, that Robinett assented to the admission
agreement. No 11 at ¶ 12; No 17 at¶ 12; No 18 at
¶ 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." No 11-1.
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. §
29-22-101 (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 Avectus, a
medical bill collector.
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.
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.
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 federal 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. 42
U.S.C. § 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).
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
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.l; 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.
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 Tuohey
v. 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. §
parties agree that Robinett's various non-Medicaid claims
- statutory, common law, and restitutionary-travel with the
Medicaid issues. Therefore, they fail too.
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 Term.
Code Ann. § 29-22-102.
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 ...