895 F.3d 582
8th Cir.2018Background
- Lacey Robinett, injured in an Arkansas car accident, was airlifted to Shelby County Healthcare (the Med) in Tennessee for emergency treatment; she was Medicaid-eligible under Arkansas law.
- The Med requires patients to assign insurance benefits but did not bill Arkansas Medicaid for Robinett’s care; instead it asserted a state-law lien against her third-party tort recovery and billed her directly for $23,750.54.
- The Med contracted Avectus to collect the charge after Robinett obtained a $100,000 settlement from the at-fault driver’s insurer.
- Robinett filed a putative class action alleging federal and Arkansas Medicaid laws prohibit direct billing of Medicaid beneficiaries prior to billing Medicaid; the Med moved for judgment on the pleadings.
- The district court granted judgment for the Med and Avectus; the Eighth Circuit affirmed, holding federal and Arkansas law do not bar a provider from choosing to forgo billing Medicaid and instead seeking payment from the patient or liable third parties.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal Medicaid law (42 U.S.C. § 1396a(a)(25)(C)) bars direct billing of Medicaid beneficiaries before the provider bills Medicaid | Robinett: § 1396a(a)(25)(C) prohibits any direct patient billing by providers of Medicaid services | Med/Avectus: § 1396a(a)(25)(C) forbids substitute/balance billing only after a provider bills and accepts Medicaid payment; providers may opt not to bill Medicaid | Held: Federal law does not bar direct billing prior to the provider billing and accepting Medicaid payment; § 1396a(a)(25)(C) targets substitute/balance billing after Medicaid payment |
| Whether federal regulations or Medicaid structure require providers to bill Medicaid first | Robinett: regulatory scheme and payer-of-last-resort principle prohibit bypassing Medicaid | Med/Avectus: Regulations allow cost-avoidance and permit providers to pursue third parties or patients when they do not bill Medicaid | Held: Regulations and statutory structure permit providers to choose to pursue patient/third-party recovery absent prior billing and acceptance of Medicaid payment |
| Whether Arkansas law (Ark. Code Ann. § 20-77-104) bans direct patient billing even when provider has not billed Medicaid | Robinett: "payable in full" covers services rendered but not yet billed, so Arkansas forbids direct billing of Medicaid-eligible persons | Med/Avectus: Statute addresses double billing (substitute/balance billing) after Medicaid payment; it does not prohibit foregoing Medicaid and pursuing patient/third-party recovery | Held: Arkansas statute mirrors federal prohibitions on substitute/balance billing and does not bar a provider from foregoing Medicaid and billing the patient or third parties |
| Whether agency interpretation supports plaintiff's view | Robinett: Arkansas DHS should interpret statute to protect beneficiaries from direct billing | Med/Avectus: Arkansas DHS materials state providers do not have to bill Medicaid even if they participate in program | Held: Agency materials support defendants; Arkansas DHS does not interpret law to prohibit choosing not to bill Medicaid |
Key Cases Cited
- Mader v. United States, 654 F.3d 794 (8th Cir. 2011) (framework for de novo statutory interpretation)
- Ahlborn, 547 U.S. 268 (2006) (Medicaid is payer of last resort; legislative intent to seek reimbursement from third parties)
- Miller v. Wladyslaw Estate, 547 F.3d 273 (5th Cir. 2008) (holding provider may pursue patient/third-party recovery if it elects not to bill Medicaid)
- Wesley Health Care Ctr., Inc. v. DeBuono, 244 F.3d 280 (2d Cir. 2001) (discussing cost-avoidance and pay-and-chase methods)
- Spectrum Health Continuing Care Grp. v. Anna Marie Bowling Irrevocable Trust, 410 F.3d 304 (6th Cir. 2005) (discussing balance-billing limits under Medicaid)
- Caremark, Inc. v. Goetz, 480 F.3d 779 (6th Cir. 2007) (explaining Medicaid as payer of last resort and third-party liability programs)