Case Title: Gister v. Am. Family Mut. Ins. Co.

Citation: 2012 WI 86

Docket Number: 2009AP002795

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2012-07-11T00:00:00Z

Document:
2012 WI 86 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2009AP2795 
COMPLETE TITLE: 
 
Jaymie A. Gister, Ethan A. Gister, a minor by 
his Guardian ad Litem, David E. Sunby, and Jared 
L. Ellis, a minor by his Guardian ad Litem, 
David E. Sunby, 
          Plaintiffs-Appellants, 
     v. 
American Family Mutual Insurance Company, 
          Defendant, 
Saint Joseph's Hospital of Marshfield, Inc., 
          Defendant-Respondent-Petitioner. 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at: 330 Wis. 2d 834, 794 N.W.2d 927 
(Ct. App. 2010 – Unpublished) 
 
 
OPINION FILED: 
July 11, 2012   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
October 7, 2011 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Dane 
 
JUDGE: 
Patrick J. Fiedler 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
BRADLEY, J., dissents (Opinion filed). 
ABRAHAMSON, C.J., and CROOKS, J., join dissent.   
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the defendant-respondent-petitioner there were briefs 
by Timothy W. Feeley, Sara J. MacCarthy and Hall, Render, 
Killian, Heath & Lyman, P.C., Milwaukee, and oral argument by 
Timothy W. Feeley. 
For the plaintiff-appellant there was a brief by David E. 
Sunby, Rhonda L. Lanford and Habush Habush & Rottier S.C., 
Wausau, and oral argument by Rhonda L. Lanford. 
An amicus curiae brief was filed by Matthew A. Biegert and 
Doar, Drill & Skow, S.C., New Richmond, for the Wisconsin 
Association 
for 
Justice.
 
 
2012 WI 86
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2009AP2795 
 
(L.C. No. 
2009CV1608) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Jaymie A. Gister, Ethan A. Gister, a minor by 
his Guardian ad Litem, David E. Sunby, and 
Jared L. Ellis, a minor by his Guardian ad 
Litem, David E. Sunby, 
 
          Plaintiffs-Appellants, 
 
     v. 
 
American Family Mutual Insurance Company, 
 
          Defendant, 
 
Saint Joseph's Hospital of Marshfield, Inc., 
 
          Defendant-Respondent-Petitioner. 
 
 
 
FILED 
 
JUL 11, 2012 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed.   
 
¶1 
MICHAEL J. GABLEMAN, J.   We review an unpublished, 
per curiam decision of the court of appeals,1 reversing a 
declaratory judgment of the Dane County Circuit Court, Patrick 
J. Fiedler, Judge.   
                                                 
1 Gister v. Am. Family Mut. Ins. Co., No. 2009AP2795, 
unpublished slip op. (Wis. Ct. App. Nov. 11, 2010). 
No. 
2009AP2795   
 
2 
 
¶2 
We are asked to decide whether a charitable hospital 
may pursue payment for medical care provided to a Medicaid-
eligible patient by filing a lien against a settlement between 
the patient and an insurance company covering the liability of a 
tortfeasor responsible for the patient's injuries.  To answer 
the question, we must harmonize the complex state and federal 
legal framework surrounding Medicaid with Wisconsin Statutes 
section 779.80 ("hospital lien statute").  We conclude that the 
soundest harmonization of the two permits the liens at issue 
here, and we therefore reverse the court of appeals. 
I. 
BACKGROUND 
¶3 
The relevant facts are undisputed.  Jeffrey Mohr 
negligently ran a stop sign and crashed into a car containing 
Jaymie Gister and her sons Ethan Gister and Jared Ellis 
("Gisters").  Another son of Jaymie Gister, Skylar Gister,2 was 
also injured in the accident, as were several unrelated 
individuals, none of whose claims relate to this case.  The 
vehicle Mohr was driving belonged to Jonathan and Mabel Harms, 
who had it insured with American Family Mutual Insurance Company 
("American Family").  The American Family policy provided 
coverage of up to $250,000 for each injured individual, with a 
total cap of $500,000 for each accident.  The Gisters suffered 
injuries of varying severity, and all four were treated at St. 
                                                 
2 We do not include Skylar Gister——who received medical care 
from St. Joseph's valued at $355,770.36——in the "Gisters" 
referred to herein because the challenged liens which form the 
basis of this action did not name him. 
No. 
2009AP2795   
 
3 
 
Joseph's Hospital ("St. Joseph's").  As later calculated by St. 
Joseph's,3 the Gisters received medical care valued in the 
aggregate of $182,799.61, broken down as follows: Ethan Gister 
$9,612.66, Jared Ellis $17,552.56, Jaymie Gister $155,634.39.     
¶4 
The Gisters were all eligible for Medicaid at the time 
of the accident, and St. Joseph's billed Medicaid for the cost 
of Skylar Gister's medical care.4  It did not bill Medicaid, 
however, for the other three Gisters, instead filing three liens 
("St. Joseph's liens") pursuant to the hospital lien statute5 
                                                 
3 The Gisters do not contest the charges as unreasonable. 
4 The Gisters repeatedly emphasized in their briefs and at 
oral argument the fact that St. Joseph's submitted a bill to 
Medicaid for Skylar Gister's medical expenses, unlike the other 
Gisters.  St Joseph's decision in that regard was not attacked 
at the circuit court, nor was it challenged at the court of 
appeals.  We therefore decline to address the issue.  See In re 
Commitment of Mark, 2006 WI 78, ¶34 n.13, 292 Wis. 2d 1, 718 
N.W.2d 90 (reiterating that this court ordinarily refuses to 
consider issues not raised below).   
5 The hospital lien statute reads, in pertinent part: 
(1) 
Every 
corporation, 
association 
or 
other 
organization 
operating 
as 
a 
charitable 
institution and maintaining a hospital in this 
state shall have a lien for services rendered, by 
way of treatment, care or maintenance, to any 
person who has sustained personal injuries as a 
result of the negligence, wrongful act or any 
tort of any other person. 
(2) 
Such lien shall attach to any and all rights of 
action, suits, claims, demands and upon any 
judgment, award or determination and upon the 
proceeds of any settlement which such injured 
person, 
or 
legal 
representative 
might 
have 
against any such other person for damages on 
account of such injuries, for the amount of the 
No. 
2009AP2795   
 
4 
 
against the proceeds of any future settlement reached between 
each of the Gisters and American Family in the amount of the 
calculated medical charges. 
II. 
PROCEDURAL HISTORY 
¶5 
After St. Joseph's liens were filed, both parties 
submitted motions for declaratory judgment in circuit court, St. 
Joseph's seeking an order declaring the liens valid, and the 
Gisters seeking one declaring them unenforceable.  The circuit 
court concluded that the liens were valid and enforceable, and 
therefore granted St. Joseph's motion and denied the Gisters'.  
In an oral opinion, the circuit court reasoned that St. Joseph's 
was authorized by Wisconsin Administrative Code section DHS 
                                                                                                                                                             
reasonable 
and 
necessary 
charges 
of 
such 
hospital. 
Wisconsin Statutes section 779.80 (2005-06).  The 
first two liens (naming Ethan Gister and Jared Ellis) 
were filed in November 2006.  The final lien (naming 
Jaymie Gister) was filed in January 2007.  We cite to 
the statutes and regulations in effect when the first 
two liens were filed.  No relevant language in any of 
the statutes or regulations changed during the months 
that elapsed between the filing of the first two liens 
and the filing of the third and final one.  All 
subsequent references to the Wisconsin Statutes are to 
the 2005-06 version unless otherwise indicated.   
No. 
2009AP2795   
 
5 
 
106.03(8)6 to either file the liens or bill Medicaid.  The court 
rejected the Gisters' argument that Wis. Stat. § 49.49(3m)(a) 
(prohibiting hospitals from "knowingly impos[ing] direct charges 
upon a [patient] in lieu of obtaining payment" from Medicaid) 
barred the liens, holding that St. Joseph's liens did not 
constitute "direct charges" upon the Gisters.  The circuit court 
likewise rejected the Gisters' contention that St. Joseph's 
liens were invalid under Dorr v. Sacred Heart Hosp., 228 
Wis. 2d 425, 597 N.W.2d 462 (Ct. App. 1999), distinguishing that 
decision because Dorr involved patients protected by contractual 
and statutory immunity as a result of their Health Maintenance 
Organization ("HMO").  The Gisters appealed.   
¶6 
In an unpublished, per curiam opinion, the court of 
appeals reversed and remanded.  Gister v. Am. Family Mut. Ins. 
Co., No. 2009AP2795, unpublished slip op. (Wis. Ct. App. Nov. 
                                                 
6 Wisconsin 
Administrative 
Code 
section DHS 
106.03(8) 
provides, in pertinent part, that "[i]f a [hospital] treats a 
[patient] for injuries or illness sustained in an event for 
which liability may be contested . . . the [hospital] may elect 
to bill [Medicaid] for services provided without regard to the 
possible liability of another party . . . .  The [hospital] may 
alternatively 
elect 
to 
seek 
payment 
by 
joining 
in 
the 
[patient's] personal injury claim  . . . , but in no event may 
the [hospital] seek payment from both [Medicaid] and a personal 
injury  . . . claim.  Once a [hospital] accepts the [Medicaid] 
payment for services provided to the [patient], the [hospital] 
shall not seek or accept payment from the [patient's] personal 
injury . . . claim."  Many of the statutes, regulations, and 
judicial opinions that we discuss refer generally to "health 
care providers."  We paraphrase "providers" as "hospitals" in 
the interest of clarity, consistency, and specificity to the 
facts at hand.  For the same reasons, we refer to "patients" 
where other authorities characterize individuals who receive 
healthcare services with the term "recipients."    
No. 
2009AP2795   
 
6 
 
11, 2010).   Applying Dorr, the court of appeals concluded that 
a lien upon a settlement between a tortfeasor and a patient is, 
in effect, a lien against the patient, and therefore requires a 
debt owed by the patient to the hospital.  Id., ¶13.  In light 
of that reasoning, the court of appeals determined that Medicaid 
bore the debt to St. Joseph's, not the Gisters, and since a lien 
against the settlement was a lien against the Gisters it was 
therefore impermissible. Id., ¶¶14-15.  The court of appeals 
rejected St. Joseph's argument that Wis. Admin. Code § DHS 
106.03(8)(allowing hospitals to either bill Medicaid or join 
personal injury lawsuits when liability "may be" contested) 
provided authority for the liens.  Id., ¶¶18-20.  According to 
the court, § 106.03(8) said nothing about seeking payment from 
third-party liability settlements, nor did it demonstrate that 
the Gisters owed a debt to the hospital, and the court concluded 
that the provision had no bearing on the validity of St. 
Joseph's liens.  Id.  Consequently, the court of appeals 
reversed and remanded the cause to the circuit court with 
directions to issue an order holding St. Joseph's liens invalid.  
Id., ¶22. 
¶7 
We granted St. Joseph's petition for review and now 
reverse. 
III. STANDARD OF REVIEW 
¶8 
When 
a 
circuit 
court's 
ruling 
on 
motions 
for 
declaratory judgment depends on questions of law, we review the 
ruling de novo.  J.G. v. Wangard, 2008 WI 99, ¶18, 313 
Wis. 2d 329, 753 N.W.2d 475.  There were no disputed issues of 
No. 
2009AP2795   
 
7 
 
fact at the circuit court, and the circuit court's decision 
rested on its interpretation of statutes, regulations, and case 
law.  These are all legal questions and we therefore review the 
ruling de novo, while benefiting from our own prior analyses and 
those of the lower courts.  State v. Henley, 2010 WI 97, ¶29, 
328 Wis. 2d 544, 787 N.W.2d 350, cert. denied, 565 U.S. __, 132 
S. Ct. 784 (2011).   
IV. 
STATUTORY INTERPRETATION 
¶9 
We are called upon to interpret and harmonize a 
variety of statutes and regulations.  When conducting such 
interpretations, we begin with certain background principles in 
mind.  We must give language "its common, ordinary, and accepted 
meaning, except that technical or specially-defined words or 
phrases are given their technical or special definitional 
meaning."  State ex rel. Kalal v. Circuit Court for Dane Cnty., 
2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110.  Our analysis 
is also guided by the context and structure of the statute under 
consideration.  Id., ¶46.  Examining statutes in light of their 
context, we strive to avoid "absurd or unreasonable results."  
Id.  At all times, we endeavor to ascertain meaning, not to 
"search for ambiguity."  Id., ¶47.  Where, as here, the statutes 
are unambiguous, we need not consult extrinsic sources, such as 
legislative history.  Id., ¶50.  Instead, we look only to the 
plain language, purpose, context, and structure of the statutes.  
Id., ¶51. 
V. 
DISCUSSION 
No. 
2009AP2795   
 
8 
 
¶10 There is no contention here that St. Joseph's liens 
were 
improperly 
filed 
under 
the 
hospital 
lien 
statute.7  
Therefore, the only question is whether they were barred by some 
other authority. 
¶11 The Gisters propose two such authorities.  First, they 
argue that Wis. Stat. § 49.49(3m)(a) bars St. Joseph's liens 
because they constitute "direct charges" imposed by a hospital 
on Medicaid-eligible patients.  Second, they submit that Dorr 
forbids St. Joseph's liens, chiefly because, under Dorr, the 
Gisters' eligibility for Medicaid means that the family did not 
owe St. Joseph's a debt and a lien against the settlement with 
American Family (in effect, according to the Gisters, a lien 
against them) is therefore impermissible.  We treat each 
contention in turn and find neither persuasive.  In particular, 
we hold that St. Joseph’s liens were fully consistent with 
federal law and thus, to the extent Wis. Stat. § 49.49(3m)(a) 
incorporates federal law, the statute does not bar the liens and 
Wisconsin 
Medicaid 
is 
in 
compliance 
with 
the 
federal 
                                                 
7 The dissent insufficiently addresses this point.  Instead, 
it presents a slippery-slope argument, asking "what other 
property belonging to a Medicaid recipient could the hospital 
seek?"  Dissent, ¶74.  This approach neglects the fact that the 
sole authority for the liens in question is the hospital lien 
statute, which carefully circumscribes the kinds of property a 
hospital can seek in such circumstances.  See Wis. Stat. 
§ 779.80(2) (making clear that hospital liens attach only "to 
any and all rights of actions, suits, claims, demands and upon 
any judgment, award or determination and upon the proceeds of 
any 
settlement 
which 
such 
injured 
person, 
or 
legal 
representative might have against any such person for damages on 
account of such injuries . . . .").    
No. 
2009AP2795   
 
9 
 
requirements.  We further hold that to the extent § 49.49(3m)(a) 
imposes an additional requirement to federal law, the statute 
likewise does not bar St. Joseph's liens.  Finally, we hold that 
Dorr does not control because it dealt with different factual 
and legal circumstances.  Accordingly, we conclude that St. 
Joseph's liens were permissible.  
A. Wisconsin Stat. § 49.49(3m)(a) Does Not Bar St. Joseph's 
Liens 
¶12 The Gisters submit that St. Joseph's liens constituted 
"direct charges" by a hospital levied upon a Medicaid-eligible 
patient, 
and 
are 
therefore 
invalid 
under 
Wis. 
Stat. 
§ 49.49(3m)(a).  We conclude, to the contrary, that St. Joseph's 
liens were consistent with federal law and with the plain 
language of § 49.49(3m)(a).  In support of our conclusion, we 
also 
show 
how 
our 
interpretation 
of 
§ 49.49(3m)(a) 
best 
harmonizes the provision with related regulations.  As a result, 
we hold that § 49.49(3m)(a) did not bar St. Joseph's liens. 
1. The Framework of Medicaid and Third Party Liability 
¶13 Although there is no federal cause of action asserted 
in the case at bar, federal law provides the appropriate 
framework to analyze the case because it defines many of 
Wisconsin Medicaid's features and obligations.  With that in 
mind, we begin with an overview of Medicaid and of its 
provisions for the collection of medical expenses where there is 
potential third party liability, as that overview sets the stage 
for our consideration of the liens at issue here. 
No. 
2009AP2795   
 
10 
 
¶14 The federal and state governments jointly fund and 
manage Medicaid, Harris v. McRae, 448 U.S. 297, 301 (1980), a 
program created to provide health care to the indigent.  42 
U.S.C. 
§ 1396. 
 
Medicaid 
is 
an 
exercise 
in 
so-called 
"cooperative federalism," whereby states voluntarily opt into 
the federal scheme and thereby bind themselves to abide by the 
rules and regulations imposed by the federal government in 
return for federal funding.  Harris, 448 U.S. at 308.  The State 
of Wisconsin has joined the federal Medicaid system, and has 
consequently committed itself to following the federal law 
governing that system.  Ellsworth v. Schelbrock, 2000 WI 63, 
¶10, 235 Wis. 2d 678, 611 N.W.2d 764.  Absent a showing to the 
contrary, we presume that Wisconsin follows the federal rules it 
has pledged to uphold.  See Rathie v. Ne. Wisconsin Technical 
Inst., 142 Wis. 2d 685, 694, 419 N.W.2d 296 (Ct. App. 1987) 
("declin[ing] to render [a] federal [a]ct superfluous or put [a 
state] institution in the precarious position of choosing 
between 
violating 
[state 
law]. . . or 
losing 
presumably 
essential federal funding."). 
¶15 The federal government requires states participating 
in Medicaid to institute "third party liability . . . programs" 
designed to "ensure that Federal and State funds are not 
misspent for covered services to eligible Medicaid recipients 
when third parties exist that are legally liable to pay for 
those services."  Medicaid Programs; State Plan Requirements and 
Other Provisions Relating to State Third Party Liability 
Programs, 55 Fed. Reg. 1423, 1423-24 (1990).  Such programs must 
No. 
2009AP2795   
 
11 
 
set forth methods for discovering when third parties are legally 
obligated to pay for medical expenses covered by the plan.  42 
U.S.C. § 1396a(25)(A).  They must also establish a system for 
pursuing third party funds where they are available.  42 U.S.C. 
§ 1396a(25)(B).   
2. Federal Law does not Bar St. Joseph's Liens 
¶16 Of the federal regulations concerning third party 
liability, the most important to this litigation is 42 U.S.C. 
§ 1396a(25)(C).  That provision requires state Medicaid plans to 
ensure  
that in the case of an individual who is entitled to 
medical assistance under the State plan with respect 
to a service for which a third party is liable for 
payment, the person furnishing the service may not 
seek 
to 
collect 
from 
the 
individual 
(or 
any 
financially responsible relative or representative of 
that individual) payment of an amount for that service 
(i) if the total of the amount of the liabilities of 
third parties for that service is at least equal to 
the 
amount 
payable 
for 
that 
service 
under 
the 
plan . . . . 
§ 1396a(25)(C).  In other words, hospitals "may not seek to 
collect [money] from [Medicaid-eligible] individuals where third 
parties are obliged to pay an amount at least equal to the 
No. 
2009AP2795   
 
12 
 
amount that would be paid by Medicaid for the service."8  Wesley 
Health Care Ctr., Inc. v. DeBuono, 244 F.3d 280, 281 (2d Cir. 
2001). 
¶17 Accordingly, a threshold question is whether liens 
such as St. Joseph's (that is, attaching to settlements between 
tortfeasors' insurers and Medicaid-eligible patients) constitute 
efforts "to collect from" the patient.  If they do not, then 42 
U.S.C. § 1396a(25)(C)'s limitations on such efforts, and the 
parallel Wisconsin provision enacted to ensure Wisconsin's 
compliance with the federal mandate, discussed below, do not 
come into play and our analysis can end there.  If St. Joseph’s 
liens do constitute efforts to "collect from" the Gisters, then 
we must examine the content of § 1396a(25)(C) more closely to 
determine whether it bars the liens.   
¶18 Both case law and logic indicate that St. Joseph's 
liens must be considered an effort "to collect from" the 
                                                 
8 Health care providers are permitted by federal law to 
"charge Medicaid beneficiaries certain nominal cost-sharing 
amounts" so as "to prevent beneficiary over-utilization of 
health care services covered under Medicaid by imposing a 
nominal payment obligation on beneficiaries."  Olszewski v. 
Scripps Health, 69 P.3d 927, 941 (Cal. 2003) (internal quotation 
marks, citations, and brackets removed).  Similarly, Wisconsin 
Medicaid allows for the billing of Medicaid-eligible patients 
under 
certain 
circumstances. 
 
See 
Wis. 
Admin. 
Code 
DHS 
§ 106.03(7)(d) 
("[I]f . . . another 
health 
care 
plan 
makes 
payment to the recipient or another person on behalf of the 
recipient, the provider may bill the payee for the amount of the 
benefit payment and may take any legal action to collect the 
amount of the benefit payment from the payee . . . ."). 
No. 
2009AP2795   
 
13 
 
patients.9  First, federal appellate decisions in this area of 
law have either assumed, Miller v. Gorski Wladyslaw Estate, 547 
F.3d 273, 282 (5th Cir. 2008), or outright held that a lien 
directed at a future settlement between a tortfeasor and a 
Medicaid-eligible 
patient 
represents 
an 
attempted 
recovery 
against the patient, not against the tortfeasor (or his 
insurer).  Spectrum Health Continuing Care Grp. v. Anna Marie 
Bowling Irrevocable Trust, 410 F.3d 304, 318 (6th Cir. 2005) 
("[B]y seeking to enforce its lien, Spectrum is attempting to 
recover 
its 
customary 
fee 
from 
the 
Medicaid 
patient 
herself . . . .") (emphasis added).  As the Sixth Circuit 
persuasively reasoned in Spectrum, the lien attaches only once 
the settlement is approved; and once the settlement is approved, 
the money belongs to the patient, not the tortfeasor (or, here, 
his insurer).  Id.; see also Olszewski v. Scripps Health, 69 
P.3d 927, 943 (Cal. 2003) ("Recovery on a [healthcare] provider 
lien [against a settlement between a Medicaid-eligible patient 
and 
a 
tortfeasor] therefore 
comes 
from 
the 
[Medicaid] 
beneficiary——and not from the third party tortfeasor——for 
purposes of federal law.").  In addition, of course, the only 
reason the hospital has a lien in the first place is because it 
provided medical services to the patient (not some other entity) 
and because the patient (not some other entity) therefore owes 
                                                 
9 It should be observed that the liens represent an effort 
to "collect from" the Gisters only in the sense that they do not 
target any other entity (such as a tortfeasor or his insurer), 
not in the sense that they go directly to the patients 
themselves, rather than to a settlement.  See note 15 infra.   
No. 
2009AP2795   
 
14 
 
it a debt.  See ¶52 infra.  It therefore makes no sense to 
regard the lien as "collecting" from anyone other than the 
patient, and the federal rule is consequently implicated. 
¶19 Having answered in the affirmative the threshold 
question of whether St. Joseph's liens were an effort "to 
collect from" the Gisters, and thus subject to the federal rule, 
we are now required to determine whether or not the rule bars 
the liens.  To reach that determination, it is instructive to 
consider federal cases dealing with similar issues. 
¶20 Several 
federal 
courts 
of 
appeals 
have 
issued 
published decisions concerning liens similar to St. Joseph's.  
Miller, 547 F.3d 273; Spectrum, 410 F.3d 304; Evanston Hosp. v. 
Hauck, 1 F.3d 540, 543-44 (7th Cir. 1993).  In each of those 
cases, the courts upheld the validity of the liens in question.  
Miller is the most factually similar case, and therefore offers 
the most helpful guidance here. 
¶21 In Miller, Jose Alfaro ("Alfaro"), an individual who 
later became eligible for Medicaid, was injured when his car and 
a truck collided in Louisiana.  547 F.3d at 276.  He received 
care at Baton Rouge General Medical Center ("Baton Rouge 
General").  Id.    While hospitalized, he filed a federal 
lawsuit against the truck company seeking damages for the 
injuries he sustained in the crash.  Id.  Baton Rouge General 
then filed a lien pursuant to Louisiana state law to recover its 
medical expenses from any future settlement or judgment Alfaro 
received from the truck company.  Id.  Baton Rouge General later 
intervened in Alfaro's lawsuit, which was resolved through 
No. 
2009AP2795   
 
15 
 
settlement.  Id.  At that point, Baton Rouge General filed a 
motion for partial summary judgment to recover the expenses it 
incurred in treating Alfaro.  Id.  A magistrate judge granted 
that motion.  Id. at 277. 
¶22 On appeal, the Fifth Circuit affirmed.  Id. at 276.  
The court began with the proposition that federal law "requires 
that each state's Medicaid agency take measures to find out when 
third parties . . . are legally obliged to pay for services 
covered by Medicaid."  Id. at 278.  Miller observed that 
Louisiana incorporated this federal mandate into its state code 
by requiring the state Medicaid agency to seek out and collect 
money from third parties liable for injuries to Medicaid-
eligible patients.  Id. at 279.   
¶23 Turning to the validity of Alfaro's liens, the Fifth 
Circuit took up Alfaro's argument that "a health care provider 
cannot seek to collect payments from that patient if a third 
party is liable for the patient's medical expenses."  Id. at 
282.  The court rejected this argument because "[c]ase law 
uniformly 
indicates 
that 
the 
limitations 
on 
provider 
reimbursement are triggered . . . when a provider elects to 
bill[,] and accepts payment from[,] Medicaid for the services it 
provides to the patient."  Id. (citations omitted).                  
¶24 Elaborating on its reasoning, the Fifth Circuit noted 
that 42 U.S.C. § 1396a(25)(C) was designed to proscribe the 
practices of "balance" and "substitute" billing.  Id. at 282-83. 
"Balance billing" occurs when a hospital bills Medicaid, 
receives reimbursement for less than the requested amount, and 
No. 
2009AP2795   
 
16 
 
then seeks to recover from the patient the difference between 
the 
medical 
expenses 
charged 
and 
the 
reimbursement 
from 
Medicaid.  Id. at 282-83.  "Substitute billing" takes place when 
a hospital bills Medicaid, is dissatisfied with the size of the 
reimbursement, and therefore tries to return the payment in 
order to charge the patient a larger amount than it received 
from the government.  Id. at 283.  As such, the Fifth Circuit 
held in Miller, the prohibition in § 1396a(25)(C) is triggered 
only when a hospital submits a bill to Medicaid.  Id. 
("Logically, a provider cannot attempt to engage in 'balance 
billing' or 'substitute billing' unless it has initially billed 
Medicaid"); see also Spectrum, 410 F.3d at 315 ("Having chosen 
to accept payment from Medicaid however, Spectrum abandoned all 
rights to further recovery of its customary fee from the lien.") 
(emphasis added); cf. Evanston Hospital, 1 F.3d at 543-44.10 
¶25 As required by federal law, Wisconsin incorporated a 
parallel provision to 42 U.S.C. § 1396a(25)(C) in its Medicaid 
plan.  That provision states that "[n]o [hospital] may knowingly 
impose upon a [Medicaid-eligible patient] charges in addition to 
payments 
received 
for 
services 
under 
ss. 
49.45 
to 
                                                 
10 It is equally well established that states are permitted 
under federal law to require hospitals to pursue expenses from 
liable third parties before billing Medicaid.  See Miller v. 
Gorski Wladyslaw Estate, 547 F.3d 273, 280 n.6 (5th Cir. 2008) 
(collecting cases).  Although Wisconsin permits that practice 
(in the form of allowing hospitals to join personal injury 
lawsuits), rather than requiring it, see Wis. Admin. Code § DHS 
106.03(8), such case law nevertheless indicates that Wisconsin's 
system is in conformity with federal law in this regard.   
No. 
2009AP2795   
 
17 
 
49.47111 . . . except under" several limited exceptions.12  Wis. 
Stat. § 49.49(3m)(a).  In accordance with the federal appellate 
decisions cited above, this provision comes into play only when 
a hospital bills Medicaid.  Indeed, by its plain terms, a 
hospital cannot impose charges "in addition to" receiving 
payments from Medicaid if it never receives any payments from 
Medicaid.  No one alleges that St. Joseph's received payments 
from Medicaid for the expenses sought in the challenged liens.  
Accordingly, we hold that the "in addition to" provision of 
§ 49.49(3m)(a), a codification of federal law whose purpose is 
illuminated by federal judicial opinions, does not bar St. 
Joseph's liens.  As a result, St. Joseph's liens are fully in 
compliance with 42 U.S.C. § 1396a(25)(C).   
3. State Law does not Bar St. Joseph’s Liens 
¶26 If Wisconsin law incorporated only what 42 U.S.C. 
§ 1396a(25)(C) demanded, our analysis could end with Miller and 
the other well-reasoned federal appellate decisions discussed 
above.  However, Wisconsin law goes beyond the requirements 
mandated by federal law.  For unlike § 1396a(25)(C), Wis. Stat. 
§ 49.49(3m)(a) contains a third party liability provision that 
does come into play, by its plain terms, even where the hospital 
never bills Medicaid.   
                                                 
11 The referenced sections comprise a portion of the 
Wisconsin statutes dealing with medical assistance.  The Gisters 
were treated by St. Joseph's under provisions within this 
section. 
12 The exceptions are not relevant to the facts of this 
case. 
No. 
2009AP2795   
 
18 
 
¶27 There 
are 
two 
prohibitions 
in 
Wis. 
Stat. 
§ 49.49(3m)(a).  The first, discussed above, prohibits hospitals 
from "knowingly impos[ing] upon a [Medicaid-eligible patient] 
charges in addition to payments received" from Medicaid.  The 
second prohibits hospitals from "knowingly impos[ing] direct 
charges upon a [patient] in lieu of obtaining payment" from 
Medicaid.  Just as a hospital can impose charges "in addition" 
to billing Medicaid only when it, at some point, bills Medicaid, 
a hospital can impose charges "in lieu" of billing Medicaid only 
if it does not bill Medicaid.  See Shorter Oxford English 
Dictionary 1014 (6th ed. 2007) (defining "in lieu of" as "[i]n 
place of; instead of").  That is, a hospital cannot impose 
charges instead of billing Medicaid if it submits a bill to 
Medicaid.  Stated differently, the "in lieu of" provision, 
unlike 42 U.S.C. § 1396a(25)(C) and its Wisconsin analogue 
(i.e., the "in addition to" provision), speaks to a circumstance 
in which the hospital elects not to submit a bill to Medicaid.  
¶28 Thus, Wisconsin's prohibition on directly billing 
Medicaid-eligible patients "in lieu of" accepting payments from 
Medicaid imposes an additional requirement not mandated by 
federal law, and one which therefore must be analyzed under a 
No. 
2009AP2795   
 
19 
 
separate rubric from that provided by the federal case law.13  
Miller, 547 F.3d at 284 ("[I]t is clear that the limitations on 
a health care provider's ability to obtain reimbursement for the 
services it provides a Medicaid-eligible patient are not 
triggered until a provider bills and accepts payment from 
Medicaid for those services."); see also Spectrum, 410 F.3d at 
315 
(same); 
Evanston 
Hosp., 
1 
F.3d 
at 
543-44 
(same).  
Consequently, these federal cases deal with distinct provisions, 
and therefore do not entirely resolve the matter at hand.  
Furthermore, because St. Joseph's never submitted a bill to 
Medicaid for the medical expenses sought in the challenged 
liens, we must consider the "in lieu of" provision in this case.     
¶29 Under a plain language analysis, we conclude that St. 
Joseph's liens do not violate the "in lieu of" provision of Wis. 
Stat. § 49.49(3m)(a).    
                                                 
13 It is important to note that the following analysis does 
not disturb our prior holding that Wisconsin is in compliance 
with federal law.  Because federal law imposes restrictions only 
once Medicaid is billed, and because St. Joseph's never billed 
Medicaid for the expenses sought in the challenged liens, its 
actions were fully consistent with federal law, and Wis. Stat. 
§ 49.49(3m)(a) 
completely 
satisfies 
Wisconsin 
Medicaid's 
obligations to the federal government.   
No. 
2009AP2795   
 
20 
 
¶30 We begin with the "common, ordinary, and accepted 
meaning" of the disputed words.14  Kalal, 271 Wis. 2d 633, ¶45.  
The plain language of the second prohibition in Wis. Stat. 
§ 49.49(3m)(a) includes two requirements: that the charges be 
"direct" and that they be imposed "in lieu of" charges paid by 
Medicaid.  American Heritage Dictionary defines "direct," in the 
most relevant definition, as "proceeding without interruption in 
a straight course or line; not deviating or swerving."  The 
American Heritage Dictionary of the English Language 527 (3d ed. 
1992). 
 
Applying 
this 
definition 
to 
§ 49.49(3m)(a), 
the 
provision should be construed to prohibit charges that "proceed 
in a straight course or line, without deviating or swerving," to 
the patient.   
¶31 Contrary to the Gisters' argument, an examination of 
the language of the hospital lien statute demonstrates that the 
liens filed by St. Joseph's did not constitute the "direct 
                                                 
14 Rather than considering the plain language of the 
statutory provisions at issue in the case, the dissent conducts 
its analysis by asking what the law "authorizes," and then 
looking for the answer to that question by consulting only the 
statutes and regulations relating to Medicaid while ignoring the 
hospital lien statute.  Dissent, ¶78 ("The law governing 
Wisconsin's Medicaid program does not authorize any third 
option."); ¶82 ("The option embraced by the majority is not 
authorized by the law governing Wisconsin's Medicaid program.").  
We do not understand this approach.  There is no ambiguity as to 
the "authorization" in the law for St. Joseph's liens: it is the 
hospital lien statute.  The question is whether some other 
authority prohibits the liens.  It is unsurprising that the 
dissent finds no "authorization" for the liens when it searches 
everywhere for such authorization except the statute that 
declares the authorization by its very title.     
No. 
2009AP2795   
 
21 
 
charges" proscribed by Wis. Stat. § 49.49(3m)(a).  Liens filed 
pursuant to the hospital lien statute "attach to any and all 
rights of action, suits, claims, demands, and upon any judgment, 
award or determination and upon the proceeds of any settlement."  
§ 779.80.  In other words, the hospital lien statute allows, 
under certain circumstances, for a direct recourse to the 
various actions undertaken by the patient (i.e., the suits, 
claims, demands, etc.).  At the same time, it must be emphasized 
that the hospital lien statute does not permit a direct recourse 
to the patient himself.  Cf. Cullimore v. St. Anthony Med. Ctr., 
718 N.E.2d 1221, 1224 (Ind. Ct. App. 1999) (noting that 
Indiana's hospital lien statute gives a hospital "a direct right 
in the insurance proceeds and other settlement funds which are 
paid to the patient by the person claimed to be liable for the 
patient's injuries . . . .") (emphasis added).15  In this regard, 
                                                 
15 In the interest of clarity, it is helpful to briefly 
address the distinction between the proposition expressed in 
this section——that St. Joseph's liens do not constitute a 
"direct charge" against the Gisters because they attach to the 
settlement, not the Gisters themselves——and the proposition 
expressed in ¶18 supra——that St. Joseph's liens constitute an 
effort by St. Joseph to "collect from" the Gisters.  The 
question presented in the "collect from" context, discussed in 
¶18, is whether St. Joseph's liens were directed at any other 
party.  See Olszewski, 69 P.3d at 943 ("Recovery on a 
[healthcare] provider lien [against a settlement between a 
Medicaid-eligible patient and a tortfeasor] therefore comes from 
the [Medicaid] beneficiary——and not from the third party 
tortfeasor——for purposes of federal law.") (emphasis added).  
That issue is merely a federal threshold question as to whether 
42 U.S.C. § 1396a(25)(C) applies to the liens.  Because it is 
well-settled as a matter of federal law that a lien filed 
against a settlement between a tortfeasor and a patient is an 
effort to "collect from" the patient, id.; Spectrum Health 
Continuing Care Grp. v. Anna Marie Bowling Irrevocable Trust, 
No. 
2009AP2795   
 
22 
 
St. Joseph’s liens can be analogized to an in rem action, which 
"is directed against . . . property and seeks a judgment as 
against the world with respect to the property that is the 
subject of the action."  In re Return of Property in State v. 
Glass, 2001 WI 61, ¶16, 243 Wis. 2d 636, 628 N.W.2d 343 
(footnote omitted) (emphasis added); see also Jayko v. Fraczek, 
966 N.E.2d 1121, ¶23 (Ill. Ct. App. 2012) (holding that a health 
care provider’s lien on a personal injury action settlement was 
an in rem proceeding).16        
¶32 Our conclusion is substantially bolstered by the 
context of the prohibition.  Kalal, 271 Wis. 2d 633, ¶46 
(reminding that statutory context shapes a plain language 
analysis).  Wisconsin Stat. § 49.49(3m)(a) provides that "[n]o 
                                                                                                                                                             
410 F.3d 304, 318 (6th Cir. 2005), we have concluded that St. 
Joseph's liens were an effort to "collect from" the Gisters.  
However, because the prohibition in § 1396a(25)(C) is triggered 
only when Medicaid is billed, and because St. Joseph's never 
billed Medicaid for the expenses sought in the challenged liens, 
we have also concluded that St. Joseph's liens did not violate 
federal law.   
By contrast, the question addressed in this section is 
whether the liens filed by St. Joseph's constitute a "direct 
charge" upon the patient.  That question is purely a matter of 
state law with no bearing on the federal question discussed 
above.  Our analysis of that question focuses on the fact that 
St. Joseph's liens were directed at a potential settlement, not 
at the Gisters themselves, and thus did not constitute a "direct 
charge" imposed upon the Gisters.    
16 In their initial complaint, the Gisters did not argue 
that St. Joseph's liens constituted "direct charges," they 
argued that the liens "have the same effect" as such charges.  
Thus, even under the Gisters own original argument, St. Joseph's 
liens were consistent with the plain language of Wis. Stat. 
§ 49.49(3m)(a). 
No. 
2009AP2795   
 
23 
 
provider may knowingly impose upon a recipient charges in 
addition to payments received for services under [Medicaid] or 
knowingly impose direct charges upon a recipient in lieu of 
obtaining payment under [Medicaid] . . . ." (emphasis added).  
The first clauses of each of the two prohibitions in Wis. Stat. 
§ 49.49(3m)(a) are strikingly similar in form: both preclude 
hospitals from "knowingly imposing charges upon" Medicaid-
eligible patients under certain circumstances.  Notably, the 
legislature made a point of inserting the word "direct" into the 
second clause, in contrast to the first.   
¶33 Where the legislature includes a word in one provision 
and omits it from a similar, parallel provision within the same 
statute, we are even more reluctant to diminish the independent 
significance of the word.  Cf. Graziano v. Town of Long Lake, 
191 Wis. 2d 812, 822, 530 N.W.2d 55 (Ct. App. 1995) ("[W]here 
the legislature uses similar but different terms in a statute, 
particularly within the same section, we may presume it intended 
the terms to have different meanings.") (citing Armes v. Kenosha 
Cnty., 81 Wis. 2d 309, 318, 260 N.W.2d 515 (1977)). 
¶34 It is not difficult to understand what "direct 
charges" look like.  See generally State v. Jackman, 60 
Wis. 2d 700, 707-08, 211 N.W.2d 480 (1973) (holding that a 
registration fee was not a direct charge).  In the medical 
context, a hospital directly charges a patient when it sends a 
bill to the patient.  See, e.g., Humana, Inc. v. Jacobson, 804 
F.2d 1390, 1392 (5th Cir. 1986) (discussing a doctor who 
threatened to "send bills directly to Medicare patients," rather 
No. 
2009AP2795   
 
24 
 
than billing Medicare).  The Hospital did not to do so here, but 
rather filed liens against the Gisters' potential settlements 
with American Family.  Accordingly, we conclude that St. 
Joseph's liens did not constitute "direct charges upon" the 
Gisters, and that they were therefore permissible under the 
plain 
language 
of 
the 
second 
prohibition 
in 
Wis. 
Stat. 
§ 49.49(3m)(a).   
4. 
Reading Wis. Stat. § 49.49(3m)(a) to Permit St. 
Joseph's Liens Best Harmonizes the Provision with Wis. Admin. 
Code § DHS 106.03(8) 
¶35 Our duty, if possible, is to harmonize Wis. Stat. 
§ 49.49(3m)(a) with other relevant regulations.  DaimlerChrysler 
v. LIRC, 2007 WI 15, ¶10, 299 Wis. 2d 1, 727 N.W.2d 311 ("When 
an administrative agency promulgates regulations pursuant to a 
power 
delegated 
by 
the 
legislature, 
we 
construe 
those 
regulations together with the statute to make, if possible, an 
effectual piece of legislation in harmony with common sense and 
sound reason.") (internal quotation marks and citation omitted). 
¶36  The parties contend, and we agree, that the most 
relevant 
regulation 
here 
is 
Wis. 
Admin. 
Code 
§ DHS 
106.03(8)(allowing hospitals to either bill Medicaid or join 
No. 
2009AP2795   
 
25 
 
personal injury lawsuits when liability may be contested).17  We 
conclude that our reading of Wis. Stat. § 49.49(3m)(a) as 
permitting the liens is the interpretation most consistent with 
Wis. Admin. Code. § DHS 106.03(8).     
¶37 Wisconsin 
Admin. 
Code 
§ DHS 
106.03(8) 
permits 
hospitals to either bill Medicaid or join personal injury 
lawsuits when liability may be contested.  The Gisters argue 
that St. Joseph's liens imposed a direct charge upon them, in 
violation of Wis. Stat. § 49.49(3m)(a).  If they are right, and 
if Wis. Admin. Code § DHS 106.03(8) is valid, a perverse result 
follows.  This is so because, under the Gisters' interpretation 
of the regulatory scheme, St. Joseph's imposes an impermissible 
"direct charge" on them in violation of § 49.49(3m)(a) when it 
files liens against their potential settlements with American 
Family before any personal injury lawsuit is filed, but somehow 
does not run afoul of § 49.49(3m)(a) when it joins in the 
lawsuit after it is filed.  We cannot subscribe to the Gisters' 
interpretation.  Regardless of whether St. Joseph's files a lien 
against a future settlement or joins in a lawsuit, the money 
being sought originates from the same source (American Family), 
goes to the same recipients (the Gisters and St. Joseph's), and 
                                                 
17 The parties debate the relevance of several other 
statutes and regulations.  Most extensively, they discuss Wis. 
Stat. § 49.46(2)(d), which prohibits state Medicaid agencies 
from authorizing payments for medical costs "payable through 
3rd-party liability."  Our decision does not require us to 
construe this provision, nor do we find anything in our opinion 
that conflicts with its prohibition.  Accordingly, we do not 
address it. 
No. 
2009AP2795   
 
26 
 
is designated for the same purpose (to satisfy the medical 
expenses incurred by the Gisters after the accident).  We see no 
rationale as to why St. Joseph's action would be a "direct 
charge" in one circumstance and not the other.18  In short, it is 
permissible for St. Joseph's to pursue the funds by joining the 
lawsuit, and it is therefore permissible for St. Joseph's to 
                                                 
18 The dissent characterizes our opinion as relying "on the 
premise that there is no difference between joining a lawsuit 
and imposing a lien on the money recovered from that lawsuit."  
Dissent, ¶83.  As an initial matter, our decision does not rely 
on a comparison of the two actions (joining a lawsuit and 
imposing a lien on a settlement), it simply cites the former as 
support for our conclusion that the liens are permissible.  This 
conclusion stands independently, as we show, on a plain language 
analysis of Wis. Stat. § 49.49(3m)(a).  By contrast, the dissent 
appears to rely on administrative regulations as defining the 
parameters of St. Joseph's legal options, whereas our primary 
focus remains on statutes (both the hospital lien statute and 
§ 49.49(3m)(a)).  Because a regulation is invalid if it 
contravenes a statute, see, e.g., Seider v. O'Connell, 2000 WI 
76, ¶26, 236 Wis. 2d 211, 612 N.W.2d 659, we believe it is more 
appropriate to consider first the relevant statutes and then the 
relevant regulations.  Finally, we do not suggest that there is 
"no difference" between joining a lawsuit and imposing a lien on 
a settlement; rather, we merely point out that it would make 
little sense to permit one while prohibiting the other.  
No. 
2009AP2795   
 
27 
 
pursue the funds through liens.19  Consequently, harmonizing Wis. 
Stat. § 49.49(3m)(a) with Wis. Admin. Code § DHS 106.03(8) 
compels us to conclude that St. Joseph's liens were valid.20    
¶38 In summary, we hold that Wis. Stat. § 49.49(3m)(a) 
does not bar St. Joseph's liens because the liens do not 
constitute "direct charges upon" the Gisters and because this 
                                                 
19 At the circuit court, the Gisters argued that Wis. Admin. 
Code § DHS 106.03(8) was invalid because it conflicted with Wis. 
Stat. § 49.49(3m)(a).  They do not urge that argument here, so 
we consider it abandoned and need not address it.  See State v. 
Young, 2009 WI App 22, ¶15 n.6, 316 Wis. 2d 114, 762 N.W.2d 736 
(declining to address an argument raised at the circuit court 
and abandoned on appeal).  We do note that in light of our 
conclusion that St. Joseph's liens were not violative of 
§ 49.49(3m)(a), 
that 
statute 
and 
Wis. 
Admin. 
Code 
§ DHS 
106.03(8) can be naturally and reasonably harmonized, and any 
suggestion that the two are in irreconcilable conflict is 
therefore meritless.  See Law Enforcement Standards Bd. v. Vill. 
of Lyndon Station, 101 Wis. 2d 472, 489, 305 N.W.2d 89 (1981) 
("An administrative rule should ordinarily be given that 
construction which will, if possible, sustain its validity.") 
(internal quotation marks and citation omitted).     
20 Because it is not necessary to do so in order to resolve 
this matter, we do not reach St. Joseph's contention that, when 
it filed its liens, it constructively joined a personal injury 
lawsuit initiated by the Gisters against American Family.   
No. 
2009AP2795   
 
28 
 
result best comports with the related regulations.21  We turn now 
to the Gisters' other submitted authority for voiding the liens: 
the court of appeals' decision in Dorr. 
B. Dorr Does not Bar St. Joseph's Liens 
¶39 We conclude that Dorr does not prevent St. Joseph's 
from 
filing the liens.  Dorr is legally and factually 
distinguishable from the case under consideration because it 
involved 
patients 
protected 
by 
contractual 
and 
statutory 
immunity as the result of an HMO.  Consequently, the decision 
does not control this case.  Moreover, we limit Dorr to its 
facts and expressly reject any interpretation of the decision 
that finds in it broadly applicable principles of law regarding 
hospital liens.   
1. Dorr is Factually and Legally Distinguishable From this 
Case 
                                                 
21 The dissent disagrees with our holding that the liens do 
not constitute "direct charges" imposed on the Gisters for 
purposes of state law on the grounds that we also acknowledge 
that the liens are an attempt to "collect from" the Gisters 
under federal law.  Dissent, ¶¶73-74.  In the dissent's view, 
the distinction is problematic because it may allow hospitals to 
seek other property from Medicaid-eligible patients.  Id., ¶74 
("[W]hat other property belonging to a Medicaid recipient could 
the hospital seek?").  However, as we have noted, the hospital 
lien statute, the sole authority for St. Joseph's liens, 
carefully limits the types of property that can be sought in 
such circumstances.  See Wis. Stat. § 779.80(2) (making clear 
that hospital liens attach only "to any and all rights of 
actions, suits, claims, demands and upon any judgment, award or 
determination and upon the proceeds of any settlement which such 
injured person, or legal representative might have against any 
such person for damages on account of such injuries . . . .").    
No. 
2009AP2795   
 
29 
 
¶40 We conclude that Dorr is factually and legally 
distinct from the case before us, and therefore does not dictate 
its result.  To explain why Dorr is distinguishable, we begin 
with an overview of its facts. 
¶41 In Dorr, an individual ("Mrs. Dorr") was injured in a 
car crash and received treatment at Sacred Heart Hospital 
("Sacred Heart").  228 Wis. 2d at 432.  Mrs. Dorr and her 
husband ("the Dorrs") had medical insurance coverage through an 
HMO, which had a contract with Sacred Heart.  Id. at 430.  Under 
the terms of the contract, Sacred Heart was required to provide 
medical services to Mrs. Dorr at an agreed-upon rate.  Id.  The 
contract also contained a "hold harmless" clause, by which 
Sacred Heart agreed not to bill, or hold liable, the HMO's 
subscribers for expenses covered by the contract.  Id. at 433.  
In addition, Sacred Heart bound itself in the "hold harmless" 
provision to accept the statutory immunities conferred by Wis. 
Stat. § 609.9122 ("HMO immunity statute") upon any of the HMO's 
subscribers and not claim any statutory exemptions from those 
immunities.  Id.  Rather than billing the HMO, Sacred Heart 
filed a lien on the insurance proceeds that the Dorrs would 
later collect.  Id.    
                                                 
22 Wis. Stat. § 609.91 (1998-99) provided, in pertinent 
part, that, with limited exceptions that were not relevant in 
Dorr v. Sacred Heart Hosp., 228 Wis. 2d 425, 597 N.W.2d 462 (Ct. 
App. 1999) or here, a "policyholder of a[n] [HMO] insurer is not 
liable for health care costs that are . . . covered under a 
policy . . . issued by the [HMO]."  
No. 
2009AP2795   
 
30 
 
¶42 In Dorr, the court of appeals began its analysis by 
examining whether the hospital lien statute "permits the filing 
of a lien without an underlying debt," as the court understood 
Sacred Heart to be arguing.  Id.  Relying upon Black's and prior 
precedent, the court concluded in Dorr that the hospital lien 
statute "requires the existence of an obligation due the 
lienholder from the person [to] whose property . . . the lien 
attaches."  228 Wis. 2d at 438.  The Dorr court found support 
for its ruling in the plain language of the hospital lien 
statute, which the court read to confirm its view that the 
statute 
"not 
only 
contemplates 
the 
existence 
of 
a 
debt 
underlying the lien but also that the debt's obligor is the 
injured person who received the medical services from the 
hospital."  Id. at 439.   
¶43 Having established to its satisfaction that a hospital 
lien requires a debt owed by the patient to the hospital, the 
court of appeals in Dorr next considered how the principle 
applied to the interaction between the hospital lien statute, 
the HMO immunity statute, and the HMO's contract with Sacred 
Heart.  The court determined that both the HMO immunity statute 
and the contract "negate[d] the existence of a debt the Dorrs 
owe" 
Sacred 
Heart, 
and 
that 
the 
lien 
was 
therefore 
impermissible. 
 
Id. 
at 
442. 
 
Dismissing 
Sacred 
Heart's 
contention that it sought recourse against the tortfeasor (who 
was not protected by either contractual or statutory immunity) 
rather than the Dorrs (who were), the court of appeals concluded 
that the lien statute did not afford any recourse against 
No. 
2009AP2795   
 
31 
 
tortfeasors.  Id.  In light of its analysis, the court of 
appeals held that "when [the HMO] immunity provisions apply or 
when a contract between an HMO and hospital contains a hold 
harmless provision, no hospital lien can be filed against an HMO 
patient's property because the HMO patient is not indebted to 
the hospital for the medical services provided."  Id. at 435.   
¶44 As is apparent from the foregoing description of Dorr, 
the only question before the court of appeals in that case was 
whether Sacred Heart's liens were valid.  In concluding that 
they were not, the court of appeals relied on the fact that the 
Dorrs were protected by statutory and contractual immunity as a 
result of their HMO.  Indeed, the court of appeals' own 
recitation of its holding demonstrates that the court was 
careful not to establish precedent that would be reflexively 
extended to distinct fact patterns.  See Dorr, 228 Wis. 2d at 
435 ("We conclude that when [the HMO] immunity provisions apply 
or when a contract between an HMO and hospital contains a hold 
harmless provision, no hospital lien can be filed.") (emphasis 
added).   
¶45 The Gisters did not subscribe to an HMO, and they 
therefore have no claim to the types of immunity discussed in 
No. 
2009AP2795   
 
32 
 
Dorr.23  Accordingly, we conclude that Dorr does not control this 
case.   
2. The Gisters are not Analogous to the Dorrs 
¶46 The court of appeals below regarded Medicaid-eligible 
patients such as the Gisters as "closely analogous to the HMO 
patient in Dorr."  Gister, No. 2009AP2795, ¶14.  It reasoned 
that, "[i]n both cases, the hospital is forbidden from billing 
the patient, and thus the patient does not owe it a debt.  And, 
in both cases, the hospital can normally obtain payment from a 
source other 
than 
the patient, either from the HMO or 
[Medicaid]."  Id.  We disagree with the court of appeals and 
conclude that the analogy is inapt for two reasons. 
¶47 First, the court of appeals omitted a crucial word 
from the first sentence of its analogy.  St. Joseph's is not 
"forbidden from billing the patient," it is forbidden from 
directly 
billing 
the 
patient 
(or, 
more 
precisely, 
from 
"impos[ing] direct charges upon" the patient).  See Wis. Stat. 
§ 49.49(3m)(a).  It stands to reason, therefore, that the 
prohibition on direct charges does not automatically signify 
that the patient owes no debt to St. Joseph's.   
                                                 
23 The dissent states that Dorr "squarely addresses the 
issue at hand in this case."  Dissent, ¶77.  However, the court 
of appeals in Dorr expressed its holding with explicit reference 
to factual circumstances that are not present here: statutory 
and contractual immunity as the result of an HMO.  See Dorr, 228 
Wis. 2d at 435 ("We conclude that when [the HMO] immunity 
provisions apply or when a contract between an HMO and hospital 
contains a hold harmless provision, no hospital lien can be 
filed.") (emphasis added).      
No. 
2009AP2795   
 
33 
 
¶48 In addition to omitting a pivotal word from the first 
sentence of the analogy, the court of appeals inserted an 
inaccurate word into the second.  In both Dorr and this case, 
the court reasoned, "the hospital can normally obtain payment 
from a source other than the patient, either from the HMO or 
[Medicaid]."  Gister, No. 2009AP2795, ¶14 (emphasis added).  It 
is true that a hospital in the same position as St. Joseph's can 
"normally obtain payment from a source other than the patient," 
namely, Medicaid.  But a hospital in the same circumstances as 
Sacred Heart faces a much different set of options.  For such a 
hospital, obtaining payment from a source other than the patient 
is not the "normal" course of action; it is the only option.  
That is, Sacred Heart was required by the plain terms of its 
contract with the HMO and by the plain terms of the HMO immunity 
statute to collect its charges from the HMO.  Dorr, 228 
Wis. 2d at 433-34.   
¶49 By contrast, in the absence of such immunities, Wis. 
Admin. Code § DHS 106.03(8) affords hospitals, at least in some 
situations, the option of billing Medicaid or joining a 
patient's personal injury claim.  It is thus a very different 
thing to hold, as a matter of law, that a patient will never owe 
a debt to a treating hospital when there are two separate and 
independent grounds, i.e., contractual and statutory immunity, 
barring the hospital from ever billing (directly or indirectly) 
the patient, as it is to hold the same when the hospital is not 
so constricted in how it pursues the payment.  For the foregoing 
reasons, we conclude that Dorr is factually and legally 
No. 
2009AP2795   
 
34 
 
distinguishable, and that the patients there are not properly 
analogized to the Gisters. 
3. The Court of Appeals' Broad Reading of Dorr is Incorrect 
¶50 We acknowledge that Dorr contains some broad language 
that militates against the position we take today.  It is 
understandable that the court of appeals in this case regarded 
that language as barring St. Joseph's liens.  We therefore pause 
to clarify the teaching of Dorr, and conclude that the broadest 
interpretation of its general language regarding hospital liens 
and settlements should have no precedential weight going 
forward.   
¶51 Dorr's analysis began with the proposition that a lien 
"presupposes the existence of a debt."  228 Wis. 2d at 437.  
That proposition is deeply rooted in our jurisprudence, see 
Boorman v. Wisconsin Rotary Engine Co., 36 Wis. 207, 212-13 
(1874), and widely accepted.  See 51 Am. Jur. 2d Liens § 13 
(2011).  Our reservations are with how the court of appeals in 
Dorr applied the proposition to the facts of that case.   
¶52 The first definition Black's offers for "debt" is 
"[l]iability on a claim; a specific sum of money due by 
agreement or otherwise."  Black's Law Dictionary 410 (7th ed. 
1999).  As soon as Sacred Heart began to treat Mrs. Dorr for her 
injuries (and as soon as St. Joseph's began to treat the Gisters 
for theirs) such a debt came into being, as "a specific sum of 
money became due" by virtue of the medical services rendered.  
Cf. Alaska Native Tribal Health Consortium v. Ridley, 84 P.3d 
418, 425 (Alaska 2004)(holding that a healthcare provider could 
No. 
2009AP2795   
 
35 
 
enforce a lien on settlement proceeds between a patient and 
third-party tortfeasors even when the patient was not personally 
indebted to the provider because the patient was entitled to 
free medical care). The maxim that services rendered gives rise 
to a debt is as old and universal as the maxim that a lien 
presupposes a debt.  See, e.g., In re Sheldon's Estate, 120 Wis. 
26, 31-32, 97 N.W. 524 (1903) (recognizing that an implied 
contract ordinarily arises for the reasonable value of services 
rendered).  As a general matter, the rule applies with equal 
force in the medical context.  See, e.g., Fischer v. Fischer, 31 
Wis. 2d 293, 309-10, 142 N.W.2d 857 (1966) (discussing implied 
contracts arising between patients and physicians), overruled on 
other grounds by Matter of Stromsted's Estate, 99 Wis. 2d 136, 
299 N.W.2d 226 (1980); see also 40A Am. Jur. 2d Payment for 
Services 
Provided 
by 
Hospital, 
§ 8 
(2011) 
("Health 
care 
providers 
and 
their 
patients 
stand 
in 
a 
creditor-debtor 
relationship.  Indeed, a hospital ordinarily is entitled to be 
compensated for its services, by either an express or an implied 
contract, and if no contract exists, there is generally an 
implied agreement that the patient will pay the reasonable value 
of the services rendered."). 
¶53 We recognize that these two principles——that a lien 
presupposes a debt and that medical services rendered gives rise 
to a debt——rest together uneasily in the context of hospital 
liens filed on settlements between patients and tortfeasors or 
insurers covering their liability, where there is often an 
entity (whether it be a public medical assistance agency or an 
No. 
2009AP2795   
 
36 
 
HMO) that may be ultimately responsible for paying the bill.  
Courts have wrestled with the resulting tension in a variety of 
different ways.  See generally 16 A.L.R. 5th 262, § 56[a], 
Effect of Extinguishment of Lien——On patient's underlying debt 
(collecting cases).  It is a large and divergent body of law, 
dealing with many distinctive statutory and contractual issues, 
and we do not think it necessary or possible to synthesize it 
into a single, coherent whole.   
¶54 We do, however, find it useful to glean from the cases 
the following proposition.  Whenever there is any uncertainty or 
ambiguity in the law as to who will ultimately pay a hospital 
bill, or as to the extent to which a hospital is prohibited from 
billing a patient, it does not make sense to regard a debt on 
the part of a patient owed to a hospital as foreclosed by law 
for purposes of a hospital lien.  One can infer that proposition 
from the fact that courts have disallowed liens in such 
circumstances only when there is no doubt that someone other 
than the patient is responsible for satisfying the debt.  See 
generally, e.g., Dorr, 228 Wis. 2d at 435 (finding no debt 
because of contractual and statutory immunity); MCG Health, Inc. 
v. Owners Ins. Co., 707 S.E.2d 349, 352-53 (Ga. 2011) (finding 
that a medical college could not enforce a lien because 
regulations gave the federal government the sole right to 
collect payment for medical care); Satsky v. United States, 993 
F. Supp. 1027, 1029 (S.D. Tex. 1998) (finding no debt because 
the insurer already paid the bill in full); Parnell v. Adventist 
Health System/West, 109 P.3d 69, 79 (Cal. 2005) (same).  The 
No. 
2009AP2795   
 
37 
 
principle is sensible, as it would be illogical to consider a 
debt legally impossible for purposes of a lien when that 
impossibility is not grounded in a legal certainty.  Applying 
this general principle to the case at bar, we hold that a 
patient's debt to a hospital is extinguished for purposes of a 
hospital lien placed upon a settlement between a patient and an 
insurer covering a tortfeasor's liability, if it ever is, only 
when the following can be accurately said: that the hospital is 
legally barred from ever billing the patient, either directly or 
indirectly.     
 ¶55 Our 
conclusion 
draws 
support 
from 
this 
court's 
holdings in related contexts.  In Noer v. G.W. Jones Lumber Co., 
170 Wis. 419, 175 N.W. 784 (1920), a physician brought a 
Workmen's Compensation Act ("the Act") claim against an employer 
for the value of medical services rendered to an employee whose 
injuries the employer was liable for under the Act.  We 
concluded that the Act (as interpreted by the Industrial 
Commission) prescribed the amount of money that the employer 
owed the employee for his injuries, but not the amount of money 
that the physician could seek from the employee through the 
courts. 
 
Noer, 
170 
Wis. 2d at 
422-23. 
 
"Under 
such 
circumstances," we reasoned, "the reasonable value of the 
services, as determined by the Industrial Commission, measures 
the amount which the employer must pay to the [employee] for 
this item of compensation, but the physician rendering the 
services is in no manner bound by such determination when he 
proceeds to collect from the [employee].  His remedy in the 
No. 
2009AP2795   
 
38 
 
courts is left unimpaired, and he may maintain his action 
therein for the value of his services as he conceives them to 
be."  Id. at 423.     
¶56 Eighteen years later, we reviewed another workmen's 
compensation case, this time arising from a conflict between the 
Act and an insurance policy indemnifying the worker's injuries.  
St. Mary's Hosp. & Training Sch. for Nurses of Sisters of 
Misericordia v. Atlas Warehouse & Cold Storage Co., 226 
Wis. 568, 277 N.W. 144 (1938).  We remarked that "[l]iability 
does not depend upon to whom credit was extended, but upon who 
in law was responsible for the payment of the bill.  The 
employee himself was doubtless responsible for payment; the 
defendant was also responsible for its payment, because the 
Workmen's Compensation Law . . . made it responsible; and the 
surety company was also responsible for its payment because of 
its policy of indemnity to the defendant."  St. Mary's Hosp., 
226 Wis. at 571. 
¶57 We take from these decisions the lesson that a debt 
for medical treatment from a patient to another party should not 
be rigidly considered extinguished simply because the law may 
ultimately direct the bill to a different party.  Applying that 
lesson to the instant case, we conclude that St. Joseph's liens 
should not have been invalidated on the exclusive ground that 
Medicaid may have ultimately paid for the charges.     
¶58 The utility of our rule is underscored by the 
circumstances of the present case.  If the Gisters had initiated 
a personal injury lawsuit, St. Joseph's could have joined the 
No. 
2009AP2795   
 
39 
 
action under Wis. Admin. Code § DHS 106.03(8).  Because that 
possibility was still open at the time St. Joseph's liens were 
filed, it would be irrational to hold, as a matter of law, that 
St. Joseph's had an insufficiently definite interest in the 
funds that American Family might later provide pursuant to a 
settlement.   
¶59 By relying on a broad and rigid interpretation of 
Dorr, the court of appeals side-stepped an analysis of where the 
debt legally belongs.  Instead, the court of appeals required 
St. Joseph's to present a specific, affirmative grant of 
authority to justify the creation of an exception to Dorr.  Dorr 
cannot sustain such a construction.  To the extent that Dorr 
reached any conclusions regarding the permissibility of hospital 
liens generally, they flow entirely from the court of appeals' 
determination that the patient in that case owed no debt to 
Sacred Heart.  Such a holding says nothing about whether the 
Gisters owed a debt to St. Joseph's.  It does violence to Dorr's 
holding to regard it, as the court of appeals here did, as 
always and everywhere imposing a burden on hospitals to justify 
with specific grants of authority (outside the hospital lien 
statute) the liens they file against settlements between 
patients and tortfeasors or insurers covering their liability.   
¶60 When a court is presented with a challenge to a 
hospital lien against a settlement between a patient and a 
third-party tortfeasor and their insurer, it should ask whether 
the applicable statutory and regulatory framework permit the 
lien in light of the specific facts of the case.  Part of that 
No. 
2009AP2795   
 
40 
 
analysis will be an examination of whether the possibility of 
the patient ever owing a debt to the hospital is legally 
foreclosed in such a way as to render the lien invalid.  We have 
conducted that analysis here, and we conclude that St. Joseph's 
liens are permissible.24  
VI. 
CONCLUSION 
¶61 We are asked to decide whether a charitable hospital 
may pursue payment for medical care provided to a Medicaid-
eligible patient by filing a lien against a settlement between 
the patient and an insurance company covering the liability of a 
tortfeasor responsible for the patient's injuries.  To answer 
the question, we have harmonized the complex state and federal 
legal framework surrounding Medicaid with the hospital lien 
statute.  We conclude that the soundest harmonization of the two 
permits St. Joseph's liens, and we therefore reverse the court 
of appeals. 
By the Court.—The decision of the court of appeals is 
reversed. 
                                                 
24 We 
reiterate 
that 
the 
holding 
of 
Dorr, 
properly 
understood, is not overruled by this opinion.  The question 
presented in Dorr was whether a hospital could file a lien 
against a settlement between a patient and a tortfeasor when the 
patient is protected by statutory and contractual immunity as a 
result of a contract between her HMO and the treating hospital.  
We do not deal with such immunities in this case, and we 
therefore do not have occasion to revisit the court of appeals' 
determination that the lien in Dorr was unenforceable.  We 
simply limit Dorr to its facts.  To the extent the broader 
language in Dorr could be read to conflict with our decision 
here, we disapprove such an interpretation.   
No.  2009AP2795.awb 
 
1 
 
 
¶62 ANN WALSH BRADLEY, J.   (dissenting).  Although the 
legal framework governing Medicaid is complex, the issues in 
this case are straightforward.  Wisconsin's Medicaid program 
circumscribes the options available to service providers like 
St. Joseph's Hospital.  Under Wisconsin's Medicaid program, the 
Gisters are not liable for the cost of their care.  To recoup 
these costs, the hospital has two options.  It can bill 
Medicaid, or it can attempt to recover its charges by joining 
the Gisters' personal injury lawsuit.    
¶63 Unfortunately, the majority does not undertake a 
careful examination of the relevant law.  Instead, it embraces a 
third option, unavailable under the law governing Wisconsin's 
Medicaid 
program, 
which violates the important principles 
underlying the program.  These principles should control the 
outcome of this case.  Because I conclude that the Gisters are 
entitled to a declaration that the hospital's liens are invalid, 
I respectfully dissent.   
I 
¶64 Although 
the 
majority's 
discussion 
is 
at 
times 
difficult to follow, it arrives at the conclusion that the 
hospital is permitted to impose liens on the Gisters' money 
settlement with the tortfeasor.  On the one hand, for purposes 
of federal law, it acknowledges that the hospital's liens are an 
attempt to collect from the Gisters.  Majority op., ¶18.  On the 
other hand, it concludes just the opposite: that the liens are 
No.  2009AP2795.awb 
 
2 
 
not an attempt to collect from the Gisters, but rather, they are 
an attempt to collect the Gisters' money.  See id., ¶31. 
¶65 Employing a "plain language" analysis, the majority 
construes the statutory prohibition against "knowingly imposing 
direct charges upon a [Medicaid] recipient" as prohibiting only 
those charges that "proceed[] without interruption in a straight 
course or line" without "deviating or swerving."  Id., ¶30.  
Apparently, 
the 
hospital's 
liens 
"deviate 
or 
swerve" 
sufficiently to satisfy the majority.  Because the hospital did 
not send a bill to the Gisters, id., ¶34, and because the liens 
are directed at the Gisters' property (that is, their settlement 
money from the tortfeasor) and not at the Gisters themselves, 
id., ¶¶31, 31 n.15, the majority ultimately concludes that the 
hospital's liens do not constitute "direct charges."   
¶66 The 
majority 
acknowledges 
that 
the 
Wisconsin 
Administrative Code permits the hospital to join the Gisters' 
lawsuit against the tortfeasor, but that same code provision 
does 
not 
expressly 
authorize 
the 
hospital's 
liens.  
Nevertheless, it reasons that it would be a "perverse result" if 
the hospital were not permitted to file a lien.   Id., ¶37.  It 
appears to conclude that there is no difference between joining 
a lawsuit and filing a lien because "the money being sought 
originates from the same source," "goes to the same recipients," 
and "is designated for the same purpose."  Id.    
¶67 Finally, the majority attempts to distinguish Dorr v. 
Sacred Heart Hosp., 228 Wis. 2d 425, 597 N.W.2d 462 (Ct. App. 
1999), by observing that the patients in that case "were 
No.  2009AP2795.awb 
 
3 
 
protected by statutory and contractual immunity as a result of 
their HMO."  Majority op., ¶44.  It notes that the Gisters did 
not subscribe to an HMO, and it concludes that the principles of 
Dorr have no bearing on this case.  Id., ¶45.  
II 
¶68 Wisconsin Stat. § 779.80 provides that a charitable 
hospital "shall have a lien for services rendered . . . to any 
person 
who 
has 
sustained 
personal 
injuries 
as 
a 
result 
of . . . any tort of any other person."  The lien "shall attach 
to" the patient's settlement against the tortfeasor.1   
¶69 If this case did not involve services provided to 
Medicaid recipients, there would be little doubt that the 
hospital could impose a lien on any settlement the Gisters 
received from the tortfeasor.  However, the Gisters are Medicaid 
recipients, 
and 
Wisconsin's 
Medicaid 
program 
is 
highly 
regulated.  Its regulations circumscribe the options available 
to service providers.          
¶70 Determining whether the hospital's liens are valid 
requires a careful examination of the complex statutes and 
administrative code provisions governing Wisconsin's Medicaid 
                                                 
1 It is important to note that the hospital lien statute was 
created in 1961, four years prior to the advent of Medicaid.  
See ch. 418, Laws of 1961.  Accordingly, when the hospital lien 
statute was created, the legislature could not have contemplated 
how its provisions would apply to services provided to Medicaid 
recipients. 
No.  2009AP2795.awb 
 
4 
 
program.2  Unfortunately, the majority does not undertake a 
careful examination of this law, and as a result, it overlooks 
two important principles underlying Wisconsin's Medicaid program 
that should control the outcome of this case.  
A 
¶71 The first principle overlooked by the majority is that 
a hospital cannot charge Medicaid recipients for services 
covered by Medicaid.  The reason Medicaid recipients cannot be 
charged is because they are not liable for the cost of these 
services.     
¶72 Wisconsin Stat. § 49.49(3m)(a) establishes that "[n]o 
provider may knowingly impose upon a recipient charges in 
addition to payments received [from Medicaid] or knowingly 
impose direct charges upon a recipient in lieu of obtaining 
payment [from Medicaid]."  The meaning of this statute is 
illuminated by Wis. Admin. Code § DHS 104.01(12)(b), entitled 
"Freedom from having to pay for services covered by [Medicaid]."  
It plainly provides: "Recipients may not be held liable by 
certified providers for covered services and items furnished 
                                                 
2 The relevant statutes are set forth at Wis. Stat. 
§§ 49.43–49.499.  Additionally, the legislature has authorized 
the Department of Health Services (previously, the Department of 
Health and Family Services) to administer Medicaid on a 
statewide level.  Wis. Stat. § 49.45(10); Wis. Admin. Code § DHS 
101.01.  To this end, the department has devised a complex set 
of regulations governing the rights and responsibilities of 
Medicaid providers and recipients.  See Wis. Admin. Code Chs. 
DHS 100-109. 
No.  2009AP2795.awb 
 
5 
 
under 
the 
[Medicaid] 
program, 
except 
for 
copayments 
or 
deductibles under par. (a) . . . ."3 
¶73 The majority acknowledges that the hospital's liens 
are an attempt to "collect from the patient[]."  Majority op., 
¶18.  Nevertheless, it asserts that the liens do not violate the 
prohibition against "direct charges."  It reasons that the 
hospital is not seeking "direct recourse" from the patients, but 
rather, it is seeking recourse from the patients' money.  Id., 
¶31.   
¶74 This reasoning is not persuasive.  There is no 
meaningful difference between seeking recourse from a patient 
and seeking recourse from the patient's money.  If the 
prohibition 
on 
"direct 
charges" 
nevertheless 
allowed 
the 
hospital 
to file 
a cause of action against a Medicaid 
recipient's money settlement because it is "property," what 
other property belonging to a Medicaid recipient could the 
hospital seek?     
¶75 As explained above, Medicaid recipients cannot be 
charged for covered services because they are not liable for the 
cost of these services.  The hospital's attempt to collect the 
patients' money settlement violates this underlying principle.    
                                                 
3 The non-liability of Medicaid recipients is repeated in 
Wis. Admin. Code DHS § 106.04(3), entitled "Non-liability of 
recipients."  It provides, in relevant part, that a hospital may 
not "attempt to impose an unauthorized charge or receive payment 
from a recipient, relative or other person for services 
provided, or impose direct charges upon a recipient in lieu of 
obtaining payment under the program . . . ." 
No.  2009AP2795.awb 
 
6 
 
¶76 For the same reason, the majority's attempt to 
distinguish Dorr is unavailing.  The majority explains that the 
Dorrs were not liable for the cost of their services because, as 
members of an HMO, they were protected by statutory and 
contractual immunity.  Majority op., ¶39.  Here, the law 
governing Wisconsin's Medicaid program likewise provides that 
Medicaid recipients are immune from liability for the cost of 
services they receive.   
¶77 The Dorr case squarely addresses the issue at hand in 
this case.  There is no legally significant difference between 
the effect of the statutory and contractual immunity at issue in 
Dorr and the immunity at issue in this case.  Based on the 
reasoning in Dorr, "no hospital lien can be filed against [a 
Medicaid recipient's] property because the [recipient] is not 
indebted to the hospital for the medical services provided."  
See id., ¶43 (quoting Dorr, 228 Wis. 2d at 435).     
B 
¶78 The 
majority's analysis also overlooks a second 
important principle underlying Wisconsin's Medicaid program.  In 
a situation like this where a third-party tortfeasor may be 
liable for services provided to a Medicaid recipient, the 
hospital has two billing options.  It can bill Medicaid, or it 
can attempt to recover its charges by joining the Gisters' 
personal injury lawsuit.  The law governing Wisconsin's Medicaid 
program does not authorize any third option. 
No.  2009AP2795.awb 
 
7 
 
¶79 The hospital's two options are clearly set forth in 
Wis. Admin. Code § DHS 106.03(8), which provides in relevant 
part: 
Personal Injury and Workers Compensation Claims. If a 
provider treats a recipient for injuries or illness 
sustained in an event for which liability may be 
contested or during the course of employment, the 
provider may elect to bill [Medicaid] for services 
provided without regard to the possible liability of 
another party or the employer.  The provider may 
alternatively elect to seek payment by joining in the 
recipient's 
personal 
injury 
claim 
or 
workers 
compensation claim . . . .4   
(Emphasis added.)  Additionally, these two options are clearly 
set forth in a handbook produced by the Department of Health 
Services to explain the program to health care providers.5   
¶80 There are advantages and disadvantages to both of the 
hospital's options.  If the hospital chooses the first option 
and bills Medicaid, its recovery of a portion of its bill is 
certain, but the hospital will receive reimbursement at a 
                                                 
4 Wisconsin Admin. Code § DHS 106.03(8) goes on to explain 
that the hospital cannot attempt to receive payment both from 
Medicaid and from the recipient's personal injury claim.  
5 See DHFS, All Provider Coordination of Benefits: Medicaid 
and BadgerCare Information for Providers, at 21, available at 
https://www.forwardhealth.wi.gov/kw/pdf/all_coord.pdf. 
 
The 
handbook explains: 
Providers may choose to seek payment from worker's 
compensation or civil liabilities.  Providers may 
receive more than the Medicaid-allowed amount from the 
settlement; however, in some cases the settlement may 
not be enough to cover all costs involved. 
Providers are not required to seek payment from 
worker's compensation or civil liabilities, instead of 
Wisconsin Medicaid, because of the time involved to 
settle these cases. . . .  
No.  2009AP2795.awb 
 
8 
 
reduced rate as determined by a Medicaid formula.6  If the 
hospital 
chooses 
the 
second 
option 
and 
the 
lawsuit 
is 
successful, the hospital may recover a larger portion of its 
charges. 
 
Nevertheless, 
reaching 
a 
settlement 
with 
the 
tortfeasor may take months or years.  Additionally, the 
hospital's recovery is by no means guaranteed, especially when 
the tortfeasor has inadequate insurance.    
¶81 Although the majority acknowledges that the hospital 
has but two options under the law, it embraces a third option.  
It permits the hospital to impose a lien on settlement money the 
Medicaid recipient recovers from the tortfeasor. 
¶82 The option embraced by the majority is not authorized 
by the law governing Wisconsin's Medicaid program.  When a 
statute or code provision sets forth specific options, courts 
frequently assume that any option that was omitted was intended 
to 
be 
excluded.7 
 
The 
majority 
discards 
this 
canon 
of 
construction and concludes that, although just two options are 
set forth in the law governing Medicaid, three options are 
allowed.    
¶83 The majority's justification for allowing the hospital 
to pursue a third option is based on the premise that there is 
                                                 
6 If the hospital choses the first option, the Department of 
Health Services will bear the responsibility of attempting to 
recoup those expenses from the tortfeasor.  See Wis. Stat. 
§ 49.89(2)-(3). 
7 See FAS, LLC v. Town of Bass Lake, 2007 WI 73, ¶27, 301 
Wis. 2d 321, 733 N.W.2d 287 (discussing the maxim "expressio 
unius est exclusio alterius," which means "the express mention 
of one matter excludes other similar matters not mentioned."). 
No.  2009AP2795.awb 
 
9 
 
no difference between joining a lawsuit and imposing a lien on 
the money recovered from that lawsuit.  In both cases, the 
majority contends, "the money being sought originates from the 
same source (American Family), goes to the same recipients (the 
Gisters and St. Joseph's), and is designated for the same 
purpose (to satisfy the medical expenses incurred by the Gisters 
after the accident)."  Majority op., ¶37.  Because "it is 
permissible for St. Joseph's to pursue the funds by joining the 
lawsuit," 
the 
majority 
concludes 
that 
"it 
is 
therefore 
permissible for St. Joseph's to pursue the funds through liens."  
Id.   
¶84 This premise is false.  Imposing a lien on the 
Gisters' future settlement money is quite different from joining 
the Gisters' personal injury lawsuit.   
¶85 If the hospital were to join the Gisters' personal 
injury suit as a subrogated plaintiff, it would bear certain 
responsibilities as a party to a lawsuit.  It would be required 
to actively participate in the lawsuit by attending hearings, 
engaging in discovery, and negotiating possible settlements.   
¶86 Further, the hospital's entitlement to a portion of 
the 
settlement 
would 
be 
subject 
to 
various 
common 
law 
principles, such as the made whole doctrine established in Rimes 
v. State Farm Mutual Automobile Insurance Co., 106 Wis. 2d 263, 
272, 316 N.W.2d 348 (1982).  Under Rimes, "one who claims 
subrogation rights, whether under the aegis of either legal or 
conventional subrogation, is barred from any recovery unless the 
[injured plaintiff] is made whole," and "[i]t is only when there 
No.  2009AP2795.awb 
 
10 
 
has been full compensation for all the damage elements of the 
entire cause of action that the [injured plaintiff] is made 
whole."  Id. at 275.  Accordingly, if the hospital joined the 
Gisters' personal injury lawsuit, it would not be entitled to 
any compensation until the Gisters were fully compensated for 
all of their damages. 
¶87 The 
hospital's 
attorney 
well 
understands 
the 
importance of the differences between joining a lawsuit and 
imposing a lien.  During oral argument, he explained: "Absent 
the availability of a lien, . . . you would be talking at best a 
subrogated interest which of course would be extinguishable at a 
hearing pursuant to this court's decision in Rimes. . . . I 
would argue that a lien under 779.80 is a priority right that is 
not susceptible to elimination under Rimes."8   
¶88 Unfortunately, the majority fails to grasp these 
distinctions.  By permitting the hospital to bow out of the 
litigation process and impose a lien on the Gisters' settlement 
money, the majority arguably allows the hospital to avoid the 
costs of engaging in litigation and common law principles such 
as the made whole doctrine.  In a case like this where the 
hospital's charges are substantial and the available insurance 
proceeds are limited, the hospital could absorb a majority of 
                                                 
8 Because the majority fails to grasp any distinction 
between joining a lawsuit and imposing a lien, it does not 
grapple with any potential consequences of its decision.  Aside 
from this brief mention during oral argument, the parties did 
not brief or argue whether a hospital lien would be susceptible 
to elimination under Rimes, and that question has not been 
decided by the court.   
No.  2009AP2795.awb 
 
11 
 
the settlement, leaving the Gisters and other health care 
providers, such as doctors, without any recovery.      
¶89 I conclude that the Gisters are entitled to a 
declaration that the hospital's liens are invalid.  Because the 
majority's analysis cannot be squared with the principles 
underlying Wisconsin's Medicaid program, I respectfully dissent.   
¶90 I am authorized to state that CHIEF JUSTICE SHIRLEY S. 
ABRAHAMSON and JUSTICE N. PATRICK CROOKS join this dissent.   
 
No.  2009AP2795.awb 
 
 
 
1