Estate of Donald v. Kalispell Regional Medical Center
258 P.3d 395
Mont.2011Background
- Donovan Donald suffered a traumatic brain injury; guardian Kathryn Donald is appointed for his estate.
- KRMC billed for the full hospital amount despite Medicaid eligibility; Medicaid later paid a portion and liens were filed.
- Estate sued KRMC and MASH on multiple theories including breach of contract and fiduciary duties; KRMC and MASH moved for summary judgment.
- District Court granted summary judgment to KRMC and MASH, and awarded KRMC prejudgment interest, attorney fees, and costs.
- KRMC sought to recover its lien plus prejudgment interest; the Estate appeals the decisions on liability, interest, and fees.
- This Court affirms the summary judgments, remands for recalculation of prejudgment interest and fees on appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether summary judgment for KRMC and MASH was proper | Donald; KRMC breached implied covenants and Medicaid terms | KRMC/MASH had legal right to pursue third-party payment and no material fact disputed | Yes; summary judgment affirmed for KRMC and MASH |
| Interpretation of Montana Medicaid Act | Medicaid should be payer of last resort; KRMC should accept Medicaid payment | Statutes require billing third-party insurers first; Medicaid pays remaining | Montana Medicaid Act correctly interpreted; KRMC could bill third-party insurance and seek liens |
| Prejudgment interest awarded to KRMC | Interest should be limited to principal; no windfall from the interest-bearing account | Statutory interest should compensate for loss of use of funds | Remand to determine net prejudgment interest; subtract interest earned from the escrow account from the 10% accrual |
| Attorney fees and costs under PSA | Estate contends PSA not invoked for fees; no award | Fees awarded as closely tied to collection under PSA; time spent on defense inseparable | No abuse of discretion; fees/ costs affirmed and to be paid by Estate |
Key Cases Cited
- Blanton v. Dep't of Pub. HHS, 2011 MT 110 (Mont. 2011) (Medicaid payer of last resort; when third-party resources exist, Medicaid not primary)
- Ark. HHS v. Ahlborn, 547 U.S. 268 (U.S. 2006) (Medicaid be the payer of last resort; third-party resources affect reimbursement)
- State v. Valley Hosp. Ass'n, Inc., 116 P.3d 580 (Alaska 2005) (Medicaid payments authorized when no liable third party; payer of last resort)