Court Opinion

ID: 4503091
Source: CourtListenerOpinion
Date Created: 2020-01-30 19:02:49.867699+00
Date Added: 2024-06-11T14:54:18.979127
License: Public Domain

The summaries of the Colorado Court of Appeals published opinions
  constitute no part of the opinion of the division but have been prepared by
  the division for the convenience of the reader. The summaries may not be
    cited or relied upon as they are not the official language of the division.
  Any discrepancy between the language in the summary and in the opinion
           should be resolved in favor of the language in the opinion.

                                                                  SUMMARY
                                                            January 30, 2020

                                2020COA18

No. 19CA0091, Harvey v. Centura — Creditors and Debtors —
Hospital Liens — Lien for Hospital Care

     In this hospital lien case, a division of the court of appeals

concludes that section 38-27-101(1), C.R.S. 2019, of the hospital

lien statute does not require a hospital to bill Medicare and

Medicaid for medical services before creating a lien against the

person who received the services, when that person is covered by

other insurance.
COLORADO COURT OF APPEALS                                    2020COA18

Court of Appeals No. 19CA0091
Arapahoe County District Court No. 18CV32030
Honorable Elizabeth Beebe Volz, Judge

Peggy Harvey,

Plaintiff-Appellant,

v.

Centura Health Corporation and Catholic Health Initiatives, d/b/a Centura
Health Saint Anthony Hospital,

Defendants-Appellees.

                           JUDGMENT AFFIRMED

                                  Division II
                          Opinion by JUDGE WEBB
                          Terry and Tow, JJ., concur

                        Announced January 30, 2020

Franklin D. Azar & Associates, P.C., Robert E. Markel, Aurora, Colorado, for
Plaintiff-Appellant

McConnell Van Pelt, LLC, Traci L. Van Pelt, David A. Belsheim, Denver,
Colorado, for Defendants-Appellees
¶1    Does section 38-27-101(1), C.R.S. 2019, of the hospital lien

 statute require a hospital to bill Medicare and Medicaid for medical

 services before creating a lien against the person who received the

 services, when that person is covered by other insurance? We

 answer this novel question “no.” For that reason, we do not reach

 the question whether federal law preempts the statute. Therefore,

 we affirm the summary judgment entered in favor of defendants,

 Centura Health Corporation and Catholic Health Initiatives

 (collectively, Centura), and against plaintiff, Peggy Harvey.

                               I. Background

¶2    In the trial court, the following facts were undisputed.

¶3    Ms. Harvey suffered injuries when a truck driven by an

 employee of Gibbons Erectors, Inc., rear-ended her vehicle. On

 April 2, 2018, a few days after the accident, Centura provided

 medical services to her. At the time of the accident and when she

 received treatment, Ms. Harvey was a Medicare beneficiary and a

 Medicaid recipient. She presented Centura with proof of her

 eligibility for these benefits.

                                     1
¶4    Centura billed her $15,611.39 for its services. Centura also

 sent the bill to Gibbons. After not receiving payment, Centura

 assigned the bill to Avectus Health Care Solutions for collection.

¶5    Geico Insurance Company insured Ms. Harvey. The coverage

 included medical expenses. Travelers Insurance Company insured

 Gibbons. When contacted by Avectus on May 9, Ms. Harvey

 provided her Geico policy number and her claim number with

 Travelers.

¶6    Avectus contacted both Geico and Travelers. On May 15,

 Avectus resubmitted the bill to Gibbons. Two days later, Avectus

 submitted the bill to Geico. Then on May 25, Avectus filed a

 hospital lien on Centura’s behalf and against Ms. Harvey in the

 billed amount.

¶7    Neither Centura nor Avectus ever billed Medicare or Medicaid.

 On June 12, Geico told Avectus that it was withholding payment of

 the Centura bill pending an agreement with Ms. Harvey’s attorney

 concerning allocation of settlement proceeds. The bill remained

 unpaid.

¶8    Ms. Harvey brought this action alleging that by filing the lien

 before billing Medicare and Medicaid, Centura violated section

                                   2
  38-27-101(1). Under section 38-27-101(7), she sought damages of

  twice the amount of the lien. Centura moved to dismiss. The trial

  court treated the motion as one for summary judgment and granted

  it. Ms. Harvey does not challenge the ruling based on any disputed

  issue of material fact.

                            II. Standard of Review

¶9      Summary judgment is reviewed de novo, applying the same

  standard as the trial court. Blakesley v. BNSF Ry. Co., 2019 COA
119, ¶ 11. It is appropriate only when no genuine issue of material

  fact exists and the moving party is entitled to judgment as a matter

  of law. C.R.C.P. 56(c).

¶ 10    Statutory interpretation is a question of law that is also

  reviewed de novo. Ryser v. Shelter Mut. Ins. Co., 2019 COA 88,

  ¶ 11. That review is guided by several familiar principles, including

  the following.

       • A court’s principal task when construing a statute is to give

         effect to the General Assembly’s intent, as determined

         primarily from the plain language of the statute. Roberts v.

         Bruce, 2018 CO 58, ¶ 8.

                                      3
       • The court construes the statute as a whole in an effort to give

         consistent, harmonious, and sensible effect to all its parts,

         reading words and phrases in context and according to the

         rules of grammar and common usage. Id.

       • If the statutory language is clear and unambiguous, the

         court does not engage in further statutory analysis, much

         less consider extrinsic information. City & Cty. of Denver v.

         Dennis, 2018 CO 37, ¶ 12.

       • When interpreting a statute, we must “give effect to every

         word and render none superfluous.” Baum v. Indus. Claim

         Appeals Office, 2019 COA 94, ¶ 35 (quoting Lombard v. Colo.

         Outdoor Educ. Ctr., Inc., 187 P.3d 565, 571 (Colo. 2008)).

                                 III. Law

¶ 11    Section 38-27-101(1) authorizes a hospital to create a lien for

  services and care provided to persons “injured as the result of the

  negligence or other wrongful acts of another person.” Such a lien —

  which is second in priority only to an attorney’s lien — is intended

  “to protect hospitals that provide medical services to an injured

  person who may not be able to pay but who may later receive

  compensation for such injuries which includes the cost of the

                                     4
  medical services provided.” Rose Med. Ctr. v. State Farm Mut. Auto.

  Ins. Co., 903 P.2d 15, 16 (Colo. App. 1994) (citing Carol A. Crocca,

  Annotation, Construction, Operation, and Effect of Statute Giving

  Hospital Lien Against Recovery from Tortfeasor Causing Patient’s

  Injuries, 16 A.L.R. 5th 262 (1993)); see also Trevino v. HHL Fin.

  Servs., Inc., 945 P.2d 1345, 1350 (Colo. 1997) (“The legislature

  clearly intended to offer hospitals additional protection for medical

  services debts by enacting the hospital lien statute.”).

¶ 12   Allowing hospitals to create liens for services and care

  “furthers the important policy of reducing the amount of litigation

  that would otherwise be necessary to secure repayment of the

  health care debts.” Wainscott v. Centura Health Corp., 2014 COA
105, ¶ 30 (quoting Cmty. Hosp. v. Carlisle, 648 N.E.2d 363, 365

  (Ind. Ct. App. 1995)). As well, such liens “benefit the public by

  encouraging hospitals to treat patients without first determining

  their ability to pay.” Id. at ¶ 31.

¶ 13   In 2015, the General Assembly “significantly amended” section

  38-27-101 to impose, for the first time, requirements that must be

  satisfied before a lien can be created. Marchant v. Boulder Cmty.

                                        5
  Health, Inc., 2018 COA 126M, ¶ 7; see Ch. 260, sec. 1, § 38-27-101,

  2015 Colo. Sess. Laws 981-83. Section 38-27-101(1) now provides:

             Before a lien is created, every hospital . . .
             which furnishes services to any person injured
             as the result of the negligence or other
             wrongful acts of another person . . . shall
             submit all reasonable and necessary charges
             for hospital care or other services for payment
             to the property and casualty insurer and the
             primary medical payer of benefits available to
             and identified by or on behalf of the injured
             person, in the same manner as used by the
             hospital for patients who are not injured as the
             result of the negligence or wrongful acts of
             another person, to the extent permitted by state
             and federal law.

  (Emphasis added.)

            IV. Centura Complied With Section 38-27-101(1)

¶ 14   Ms. Harvey contends Centura violated section 38-27-101(1) by

  creating a lien for the cost of her medical care without first billing

  Medicare and Medicaid. Centura concedes preservation. We

  discern no violation.

¶ 15   Section 38-27-101(1) requires a hospital — before creating a

  lien — to submit reasonable and necessary charges for hospital care

  to the property and casualty insurer and the primary medical payer

  of benefits available to and identified by the injured person.

                                     6
  Although the parties disagree as to when (if ever) Medicare and

  Medicaid become a “primary medical payer of benefits,” mere

  disagreement about the application of statutory language does not

  create an ambiguity. Morley v. United Servs. Auto. Ass’n, 2019 COA
169, ¶ 16. Indeed, at oral argument, both Centura and Ms. Harvey

  agreed that the statute is unambiguous.

¶ 16   While section 38-27-101 leaves “primary” payer of benefits

  undefined, it does define “payer of benefits” generally. See

  § 38-27-101(9). This definition includes an insurer, a health

  maintenance organization, a health benefit plan, a preferred

  provider organization, an employee benefit plan, a program of

  medical assistance under the “Colorado Medical Assistance Act,”

  “[a]ny other insurance policy or plan,” or “[a]ny other benefit

  available as a result of a contract entered into and paid for by or on

  behalf of an injured person.” Id. Everyone before us agrees that

  this definition includes Medicare and Medicaid.

¶ 17   Still, had the General Assembly intended for section

  38-27-101(1) to include all payers of benefits, it would not have

  used the limiting word “primary.” See Sooper Credit Union v. Sholar

  Grp. Architects, P.C., 113 P.3d 768, 772 (Colo. 2005) (“Had the

                                     7
  General Assembly intended to limit [the statute’s application], it

  would have said so. Accordingly, we will not read in such a

  requirement that the General Assembly plainly chose not to

  include.”). Because the General Assembly included this word, we

  must assume that it did so intentionally. Lombard, 187 P.3d at 571

  (We “do not presume that the legislature used language idly and

  with no intent that meaning should be given to its language.”

  (quoting Colo. Water Conservation Bd. v. Upper Gunnison River

  Water Conservancy Dist., 109 P.3d 585, 597 (Colo. 2005))).

¶ 18   Under section 38-27-101(1), a hospital must submit charges

  to the primary payer of medical benefits “to the extent permitted by

  state and federal law.” So, to give effect to the word “primary” in

  section 38-27-101(1), we examine its use under state and federal

  law. As discussed below, doing so gives the phrase “primary payer”

  a particular meaning in the context of Medicare and Medicaid

  benefits that defeats Ms. Harvey’s claim.

                               A. Medicare

¶ 19   When the Medicare Program was enacted, it “served as the

  primary payer for all services to Medicare beneficiaries.” Smith v.

  Farmers Ins. Exch., 9 P.3d 335, 338 (Colo. 2000). But this changed

                                    8
  in 1980, when Congress enacted the Medicare Secondary Payer

  (MSP) provisions, see 42 U.S.C. § 1395y (2018). Smith, 9 P.3d at

  338. These provisions “require care providers to ascertain whether

  a Medicare beneficiary is covered by some other insurance and to

  bill that insurer first, only turning to Medicare if the insurance is

  not forthcoming.” Am. Hosp. Ass’n v. Sullivan, CIV. A. No. 88-

  2027(RCL), 1990 WL 274639, at *6 (D.D.C. May 24, 1990); see also

  42 C.F.R. § 411.32(a)(1) (2018) (“Medicare benefits are secondary to

  benefits payable by a primary payer . . . .”).

¶ 20   So, under federal law, Medicare is a secondary payer “when

  another insurer is responsible for providing primary coverage.”

  Wainscott, ¶ 68. Indeed, Medicare is prohibited from making

  payment when “payment has been made or can reasonably be

  expected to be made” by a group health plan, a workers’

  compensation plan, an automobile or liability insurance plan, or a

  no-fault insurance plan. Id. at ¶ 69 (quoting 42 U.S.C.

  § 1395y(b)(2)(A)). However, because federal law is silent on hospital

  liens, we return to Colorado law.

¶ 21   The General Assembly is “presumed to know the existing law

  at the time it amends or clarifies that law.” Alliance for Colorado’s

                                      9
  Families v. Gilbert, 172 P.3d 964, 968 (Colo. App. 2007). Reading

  section 38-27-101(1) in the context of the MSP provisions, we

  conclude that the phrase “primary payer” did not require Centura to

  submit charges to Medicare because — given the existence of other

  insurance in this case — Medicare is considered a secondary payer

  under 42 U.S.C. § 1395y(b)(2). This is so even though Ms. Harvey

  showed Centura that she was covered by Medicare and Medicaid.

¶ 22   Despite this clear statutory language, Ms. Harvey argues that

  Centura was required to submit its charges to Medicare before

  creating a lien based on the conditional payment provisions of the

  MSP provisions. Those provisions allow Medicare to make a

  conditional payment for medical expenses if the primary payer “has

  not made or cannot reasonably be expected to make payment with

  respect to such item or service promptly.” 42 U.S.C.

  § 1395y(b)(2)(B)(i) (referred to as the “promptly period”). 1

                         ———————————————————————
  1 The payments are “conditional” because “upon judgment or
  settlement, the primary insurer and anyone who receives payment
  from it must reimburse Medicare for any conditional payments
  made.” Wainscott v. Centura Health Corp., 2014 COA 105, ¶ 70
  (first citing 42 U.S.C. § 1395y(b)(2)(B)(ii) (2018); then citing 42
  C.F.R. §§ 411.22, 411.52(b) (2013)).

                                     10
¶ 23   According to Ms. Harvey, to comply with section 38-27-101(1),

  “Centura could not record a hospital lien without determining if

  prompt payment would be made by non-Medicare sources and if

  not, billing Medicare as the primary payer of benefits.” True,

  Centura could bill Medicare on the earlier of determining that

  payment was not reasonably expected or lapse of 120 days after the

  services had been provided. But for two reasons, we disagree with

  Ms. Harvey’s conclusion that this provision required Centura to bill

  Medicare before creating the lien.

¶ 24   First, Ms. Harvey’s argument assumes that Medicare has

  become a primary payer. Yet, under the MSP provisions Medicare

  continues to be a secondary payer even when prompt payment is

  not reasonably expected nor made within 120 days. At most, under

  the MSP provisions, “[a]fter the promptly period, Medicare may

  make conditional payment.” Wainscott, ¶ 70 (emphasis added)

  (citing 42 U.S.C. § 1395y(b)(2)(B)(ii)); see A.S. v. People, 2013 CO 63,

  ¶ 21 (“[U]se of the term ‘may’ is generally indicative of a grant of

  discretion or choice among alternatives.”).

¶ 25   Second, Ms. Harvey’s argument would defeat the purpose of

  these statutory schemes. Under her interpretation of section

                                     11
  38-27-101(1), if Centura were required to bill Medicare before

  creating a lien, and when Medicare was not a primary payer, then

  Medicare would become its only option for reimbursement.

  Specifically, the Medicare Secondary Payer Manual explains that

  after the promptly period or if liability insurance will not pay during

  the promptly period, “a provider, physician, or other supplier” has

  two choices: either “bill Medicare for payment and withdraw all

  claims/liens against the liability insurance/beneficiary’s liability

  insurance settlement” or “maintain all claims/liens against the

  liability insurance/beneficiary’s liability insurance settlement.”

  U.S. Dep’t of Health & Human Servs., Ctrs. for Medicare & Medicaid

  Servs., Medicare Secondary Payer (MSP) Manual, ch. 2, § 40.2B

  (2016) (MSP Manual).

¶ 26   Requiring Centura to bill Medicare before creating a lien —

  when Medicare is still considered a secondary payer — erodes the

  purpose of the hospital lien statute to protect hospitals “against

  financial losses resulting from personal injury cases.” Wainscott,

  ¶ 33. If a provider bills Medicare, “the provider must accept the

  Medicare approved amount as payment in full . . . .” MSP Manual,

  ch. 2, § 40.2D. Yet, “if the provider pursues liability insurance, the

                                    12
  provider may charge beneficiaries actual charges, up to the amount

  of the proceeds of the liability insurance . . . .” Id.

¶ 27   Given all this, we disagree with Ms. Harvey that Medicare

  constituted a primary payer under section 38-27-101(1) who must

  have been billed before Avectus filed the lien. 2

                                B. Medicaid

¶ 28   We also reject Ms. Harvey’s argument that Centura was

  required to bill Medicaid as a primary payer before creating a lien

  under section 38-27-101(1).

¶ 29   Section 25.5-4-300.4, C.R.S. 2019, of the Colorado Medical

  Assistance Act, provides:

             It is the intent of the general assembly that
             medicaid be the last resort for payment for
             medically necessary goods and services
             furnished to recipients and that all other
             sources of payment are primary to medical
             assistance provided by medicaid.

  (Emphasis added.)

                           ———————————————————————
  2 This case does not require us to decide when — if ever — Medicare
  might become a primary payer that a provider must bill, before
  filing a lien, if the provider has not already done so because
  Medicare was clearly a secondary payer.

                                      13
¶ 30   Again, Ms. Harvey argues that Medicaid is included in the

  definition of payer of benefits under section 38-27-101(9). But, as

  explained above, section 38-27-101(1) refers to the “primary payer”

  of benefits. So, we conclude that in instances where an injured

  person has other sources for the payment of benefits, Medicaid is a

  payer of last resort and not a primary payer. Therefore, Centura

  was not required to bill Medicaid before creating a lien.

                             V. Attorney Fees

¶ 31   Centura requests “all reasonable legal expenses necessary for

  the collection of . . . [Ms.] Harvey’s debt, including attorney[] fees,”

  based on a contract that is not in the record. Because this request

  was not raised with the trial court, and in any event the record does

  not include the contract that purportedly shifts fees, we decline to

  address it. See State Farm Fire & Cas. Co. v. Weiss, 194 P.3d 1063,

  1069 (Colo. App. 2008) (request for attorney fees not raised before

  the trial court may not be raised for the first time on appeal).

                              VI. Conclusion

¶ 32   The judgment is affirmed.

       JUDGE TERRY and JUDGE TOW concur.

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