Health Reform WK-EDGE Provider may directly bill Medicaid beneficiary who has non-Medicaid payment source
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Tuesday, July 24, 2018

Provider may directly bill Medicaid beneficiary who has non-Medicaid payment source

By David Yucht, J.D.

The Eighth Circuit Court of Appeals ruled that a trauma center that cared for a Medicaid beneficiary following an automobile accident was entitled to bill the beneficiary directly for her care and attempt to collect its bill from the proceeds of a personal injury settlement the beneficiary obtained as a result of the relevant accident. Health care providers may opt to attempt collection directly from a Medicaid-eligible patient who has a non-Medicaid source of payment instead of seeking a certain but reduced payment from Medicaid. Consequently, the appellate court upheld the district court ruling dismissing the Medicaid beneficiary’s law suit against the trauma center (Robinett v. Shelby County Healthcare Corporation, July 13, 2018, Smith, L.).

Health care provider pursued lien against law suit. A Medicaid beneficiary was injured in an automobile accident in Arkansas. Another vehicle’s driver was at fault. She was transported to an out of state trauma center for treatment. As a general condition of admission, the trauma center required her to assign all of her insurance benefits. The trauma center had an agreement with Arkansas Medicaid to provide services to Medicaid beneficiaries from Arkansas. However, subsequent to treating this beneficiary, the trauma center chose not to bill Arkansas Medicaid. Instead, it pursued a lien against the beneficiary’s third-party claim against the at-fault driver’s insurance company. The beneficiary settled her damages claim for $100,000.

Medicaid beneficiary sues. The trauma center billed the beneficiary directly and contracted with a collection agent to recover the charges. In response to the collection effort, the beneficiary filed a class action suit against the trauma center and collection agency, alleging that both federal and Arkansas Medicaid laws prohibited the trauma center from directly billing Medicaid beneficiaries. The district court granted the trauma center’s motion for judgment on the pleadings. The beneficiary filed an appeal.

Direct patient billing. The Eighth Circuit upheld the lower court’s ruling throwing out the beneficiary’s case. The appellate court noted that Medicaid is a payer of last resort meaning that all other available resources must be used before Medicaid pays for a beneficiary’s medical care. The Medicaid statute requires that each state administering agency take measures to discover when third parties such as private insurers are legally obligated to pay for covered services. Federal law does not require that a services provider bill Medicaid every time it treats a Medicaid beneficiary. Additionally, the Eighth Circuit noted that federal law precludes direct patient billing in only two specific instances; substitute billing and balance billing. Neither of which applied here. Based on both federal and Arkansas state law, the appellate court had no problem with a situation, such as the one presented here, where a health care provider opted to attempt collection directly from a Medicaid-eligible patient who had a non-Medicaid source of payment or a liable third party instead of seeking a certain but likely reduced payment from Medicaid.

The case is No. 17-1336.

Attorneys: James P. Kemp (Kemp & Kemp) for Lacey Robinett. Don L. Hearn, Jr. (Glankler Brown, PLLC) and John Irving Houseal, III (Easley & Houseal PLLC) for Shelby County Healthcare Corp. d/b/a Regional One Health d/b/a Regional Medical Center. Mark Mayfield (Womack Phelps Puryear Mayfield & McNeil, P.A.) for Avectus Healthcare Solutions LLC.

Companies: Shelby County Healthcare Corp. d/b/a Regional One Health d/b/a Regional Medical Center; Avectus Healthcare Solutions LLC

Cases: CaseDecisions NewsFeed AgencyNews InsurerNews MedicaidNews ProviderPaymentNews ArkansasNews IowaNews MinnesotaNews MissouriNews NebraskaNews NorthDakotaNews SouthDakotaNews

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