Tag Archive for: Liens

Hospital Lien Collection Practices Case in Colorado (Medicare and Medicaid Beneficiaries Beware!)

Hospital Lien Collection Practices Case in Colorado (Medicare and Medicaid Beneficiaries Beware!)

Click here for a downloadable copy of this blog

A state appellate court in Colorado just held that hospitals in Colorado may forego billing Medicare or Medicaid even when an injured party is a Medicare or Medicaid beneficiary, and may proceed against the injured party as long as the hospital follows certain procedures. See Harvey v. Centura Health Corporation and Catholic Health Initiatives, — P.3d —- (2020) Court of Appeals No. 19CA0091 January 30, 2020*.

Those procedures are that the hospital must first submit charges to the “property and casualty insurer and primary medical payer of benefits available” to the injured person when that person is injured as a result of negligence or wrongful acts of another person, before filing a lien. The state appellate court clarified that neither Medicare nor Medicare are primary payers of medical benefits and because of this, held that Hospitals in Colorado do not need to bill Medicare and/or Medicaid before filing a lien.

Therefore, Colorado hospitals interested in collecting larger amounts of money than Medicare and/or Medicaid will pay will likely forego billing Medicare and/or Medicaid, and will put the at fault party on notice of its charges, will bill the liability carrier for the at fault party, and then proceed to file a lien against the injured party likely to receive a third party liability settlement.

Of course the charges must be related to the underlying third party liability injury and must be reasonable and necessary. So even if a Colorado hospital lien is perfected, the injured party has a right to dispute whether the charges are injury-related and to contest the reasonableness or necessity of the charges.

Call Medivest when your injured client is facing a hospital lien to allow our specialists to first determine if all of the requested charges are related to the underlying injury, and to negotiate with the lien holder or its recovery agent regarding the amount of reasonable and necessary charges. Don’t let your client pay unreasonable or unnecessary hospital bills even when a lien is filed!

*While this case has not been released for publication in permanent law reports and could be subject to a petition for rehearing in the Court of Appeals or for Certiori in the Supreme Court of Colorado, it is important to be aware of hospital practices in this regard.

Florida Medicaid (AHCA) Liens Do Not Reach Post Settlement Medicals

Florida Medicaid (AHCA) Liens Do Not Reach Post Settlement Medicals

Unlike the Medicare Secondary Payer Act[1] that grants lien rights to the U.S. government to be reimbursed for past as well as future injury-related Medicare allowable medical items, services and expenses (Medicals), on July 5, 2018 the Florida Supreme Court (Court) ruled that Florida Medicaid liens extend only to past payments for Medicals and not to future payments for same. This decision resolved a conflict between two Florida District Courts of Appeal. In 2016, Florida’s First District Court of Appeal (1st DCA) affirmed an Administrative Law Judge’s (ALJ) ruling that the state’s Medicaid Agency, the Agency for Health Care Administration (AHCA), was allowed to lien both past and future medical portions of a Florida Medicaid recipient’s tort recovery.[2] However, in 2017, the 2nd DCA ruled in Willoughby v. Agency for Health Care Administration, 212 So. 3d 516 (Fla. 2d DCA 2017), that the AHCA was not allowed to lien future medical portions of a Florida Medicaid recipient’s tort recovery.

While Giraldo v. Agency for Health Care Administration, 2018 WL 3301563 (Fla. July 5, 2018) is technically not final because the time for the filing a motion for rehearing has not passed, it seems likely the decision will not change. Four judges concurred with the Opinion by Judge Lawson and one concurred in part on the substantive decision and dissented “in part” only regarding the weight of evidence used in calculating the past Medicals. Even if the court had remanded the case for additional factfinding regarding the value of past Medicals, the holding that a Florida Medicaid lien is limited to past Medicals should stand.

The Court held that the federal Medicaid Act’s “ceiling” provision[3] was clear in prohibiting a state Medicaid agency such as Florida’s AHCA, from placing a lien on the future medical expenses portion of a Medicaid recipient’s tort recovery.  The Court mentioned its decision seemed to also be compelled by the U.S. Supreme Court decisions in Alhborn and Wos, but because the language of the federal Medicaid Act was clear, there was no need to perform a separate analysis of the Ahlborn and Wos decisions.  The Court then remanded the case with instructions to the 1st DCA to direct the ALJ to reduce AHCA’s lien amount to $13,881.79 from $321,720.16. At the administrative hearing level, the estate of the deceased injured party presented uncontradicted evidence establishing $13,881.79 as the settlement portion allocated to the past medical expenses. Because the Court determined that there was no reasonable basis in the underlying record to reject the amount allocated for the past medicals, it held no further factfinding was required.

Quashing the decision of the 1st DCA and approving the Willoughby decision of the 2nd DCA, the Court held that the federal Medicaid law restricted Florida’s AHCA to lien only the past medical expenses portion of a Medicaid beneficiary’s third-party tort recovery to satisfy its Medicaid lien.

Take Away

Florida attorneys that have injured clients that are enrolled in Medicaid should be on high alert regarding reimbursement demands from AHCA. Attorneys with clients on Medicaid or possibly dual enrolled in both Medicare and Medicaid should investigate the existence of any liens and demand to be treated fairly by the respective government agency when negotiating conditional payment reimbursement/lien resolution.

[1] 42 U.S.C. §1395y(b) et seq.

[2] Giraldo v. Agency for Health Care Administration, 208 So. 3d 244(Fla. 1st DCA 2016).

[3] 42 U.S.C. § 1396a(a)(25)(H) “. . . [T]o the extent that payment has been made under the State plan for medical assistance for health care items or services furnished to an individual, the State is considered to have acquired the rights of such individual to payment by any other party for such health care items or services.”

Medicare Conditional Payment Recovery Report FY 2017 by CMS for MSP CRC Contract

Medicare Conditional Payment Recovery Report FY 2017 by CMS for MSP CRC Contract

In its recent annual report to Congress, the Centers for Medicare & Medicaid Services (CMS) stated that during fiscal year (FY) 2017 ending September 30, 2017, its Medicare Secondary Payer Commercial Repayment Center contractor (CRC), obtained $131.78 million in net recoveries for conditional and mistaken payments made by Medicare that should have been paid by primary payers such as Group Health Plans (GHPs), or liability insurers (including self-insureds), no-fault insurers or workers’ compensation entities/plans (the latter group collectively called Non-Group Health Plans or NGHPs, and all recoveries described above will be referred to as Medicare conditional payment recoveries).

Like last year, the NGHP – Medicare conditional payment recoveries represented a larger percentage of the CRC’s overall conditional payment recoveries, and the report indicated that continued reduction of GHP recoveries was again due to the “maturity of the mandatory reporting instituted under Section 111 [of the Medicare Secondary Payer statute’s[1]] Medicare, Medicaid, and SCHIP Extension Act of 2007″ [2] (Section 111 Reporting), as well as the CRC’s “resolution of pending available recoveries.”

The $131.78 million net was larger than both FY 2016’s net of $88.35 million and FY 2015’s net of $125.05 million.  Because the newest CRC contractor, Performant Recovery, Inc. (Performant), just took over the CRC recovery contract on February 12, 2018, these reported recoveries reflect efforts of the former CRC contractor.  Performant has promised more efficiency in its collection process and better coordination with the Benefits Coordination & Recovery Contractor (BCRC), the entity that receives both notifications of NGHP settlements, judgments, awards or other payments (settlements) from beneficiaries and their representatives, as well as Section 111 Mandatory Insurance Reporting information about injuries, settlements and responsibility for payments from Responsible Reporting Entity (RRE) insurance carriers.  One indication that CMS and/or Performant may be keeping a closer eye on conditional payment recoveries and working more efficiently is that the FY2017 payment recovery report was available on the CMS website in the first quarter this year as opposed to the third quarter a year ago.

CMS’s continued expansion of Medicare conditional payment recoveries into NGHP categories with Performant in the CRC driver’s seat should mean even higher Medicare conditional payment recoveries moving forward.

[1] 42 U.S.C. §1395y(b).

[2] 42 U.S.C. §1395y(b)(8) et seq. (P.L. 110-173).


Montana Senators Request a Waiver of Medicare Liens for Libby Montana Asbestos Victims

On October 2, 2012, Montana Senators Max Baucus and Jon Tester sent a letter to Marilyn Tavenner, acting administrator for the Centers for Medicare and Medicaid Services (CMS), requesting a complete waiver of the Medicare liens in the infamous Libby, Montana asbestos settlement case.

The Libby Story

Libby Montana, population 3,000, is a picturesque mining town 40 miles south of the Canadian border.  Vermiculite ore has been mined there since 1919 and since 1963, a W. R. Grace and Company plant mined and stockpiled vermiculite on site before shipping it by across the U.S. to make attic insulation.  Grace distributed its excess vermiculite in Libby for use in playgrounds, baseball fields, backyards, gardens and roads.  The Grace plant closed in 1990 for economic reasons.

In 1999, a series of articles were published in a Seattle newspaper entitled, “Uncivil Action: A Town Left to Die”, noting the high rates of asbestos related diseases and deaths in Libby.   In response, that same year, the U.S. Environmental Protection Agency (EPA) investigated and found toxic forms of asbestos at the former Grace mine site.  In 2000, the EPA started a massive cleanup effort in and around Libby.  In 2005, the U.S. government brought criminal conspiracy charges against W.R. Grace and several former employees, claiming that they knew of the risks involved but hid it from employees and the town of Libby.  The company and the former employees were later acquitted of all charges.  In 2008, Grace agreed to pay $250 million to reimburse the federal government for the cost of the cleanup.   Also in 2008, Grace paid a $60 million settlement to numerous homeowners and businesses.  In 2009, the EPA declared the Libby asbestos contamination as its first public health emergency.

Senator Baucus, chairman of the Senate Finance Committee, inserted a clause in the Affordable Care Act, which was passed by Congress in 2010, that gave Medicare coverage to residents of Libby who are diagnosed with an asbestos related disease.

Recent news reports state that approximately 400 deaths have occurred, and about 1,700 residents have been sickened by asbestos exposure.   Reports have referred to he Libby site as the deadliest superfund site in U.S. history.   It has been estimated that about $400 million has been spent so far on the cleanup efforts.

Two documentary films; “Libby, Montana” and  Dust to Dust” have been produced and four books have been written on the Libby asbestos issue.

$43 Million settlement with the state of Montana held up due to Medicare liens

In September of 2011, a Montana district court approved a $43 million settlement with the State of Montana and former miners and their families who accused the State of Montana of failing to properly oversee the mine and failing to warn the miners of the dangers.  These plaintiffs originally sued W.R. Grace, but after the company filed for bankruptcy in 2001, they filed suit against the state of Montana.  About 1,400 people are expected to receive payments from this settlement.

However, final payments from this settlement have been held up for over a year, while the parties wait for Medicare to determine how much they are owed.  Under the Medicare Secondary Payer (MSP) statutes, Medicare has the right to recover, from the settlement, the medical payments it made (“conditional payments” as they are properly called) to treat the asbestos victims.

On October 4th, 2012, both Senators from Montana, Senator Baucus and Senator Testor sent a letter to CMS requesting a complete waiver of all Medicare liens from this settlement.  In a press release dated the same day, Tester said, “Folks in Libby had their good health taken away from them through no fault of their own, and the courts agreed that they deserve to be compensated”.   Baucus similarly stated, “The people of Libby have already been hurt by greed and we can’t allow them to be hurt even further by red tape”.


It will be interesting to see what happens with this request for waiver of Medicare liens by two U.S. Senators.  The MSP issues in this case are complex and are similar to those of recent court decisions (see previous Medivest Blog posts on Hadden v. U.S., Bradley v. Sebelius, and U.S. v. Stricker) around the country, and of legislative bills currently in Congress.”  Medicare’s policy regarding compromising conditional payment situations is perplexing and frustrating to the settlement community.  In most cases, Medicare insists on collecting 100% of its conditional payments stating that a compromise is in conflict with the MSP provisions.  Nonetheless, CMS compromises about two thirds of the cases where the conditional payment collection would consume the entire settlement.  However, this option is only available upon request and CMS does not advertise its availability.

Regarding the delay, on one hand, it is unconscionable that these 1,400 people, after waiting over a decade, finally get a settlement and now have to wait over a year to receive their settlement payment while Medicare can determine how much the Medicare payment will be.  On the other hand, can you imagine digging through Medicare lien information for this many individuals?   H.R. 1063, the Strengthening Medicare and Repaying Taxpayers Act of 2011 (SMART ACT), is working its way through Congress right now.  One of the SMART bill’s main components is a provision to expedite Medicare’s determination of conditional payments, which would prevent situations like this from occurring again.