Colorado Department of Social Services v. Health Care Management Consultants, Inc.

813 P.2d 829, 15 Brief Times Rptr. 754, 1991 Colo. App. LEXIS 156, 1991 WL 95895
CourtColorado Court of Appeals
DecidedJune 6, 1991
DocketNo. 89CA1979
StatusPublished
Cited by2 cases

This text of 813 P.2d 829 (Colorado Department of Social Services v. Health Care Management Consultants, Inc.) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Colorado Department of Social Services v. Health Care Management Consultants, Inc., 813 P.2d 829, 15 Brief Times Rptr. 754, 1991 Colo. App. LEXIS 156, 1991 WL 95895 (Colo. Ct. App. 1991).

Opinion

Opinion by

Judge RULAND.

Colorado Department of Social Services, plaintiff, appeals from that part of the judgment of the district court awarding defendant, Health Care Management Consultants (HCMC), amounts due and uncollected from certain patients who qualify for Medicaid. The Department also appeals the award of prejudgment interest. We affirm in part and reverse in part.

The relevant facts are not in dispute. HCMC owned and operated several nursing homes that rendered services to Medicaid patients. The Department withheld payment to HCMC for amounts which were due from individual patients for their share of the costs of providing care. The Department contended that the applicable statutes and regulations prohibited the nursing home from billing the Department for these uncollected amounts.

HCMC requested a hearing before an Administrative Law Judge (AU) to review, among other things, whether the Department could withhold payment for amounts HCMC was unable to collect from the patients. HCMC contended that approximately $20,000 was due. However, the AU awarded only $2,181, concluding that HCMC was entitled to recover only if it promptly notified the county of a patient’s delinquency and the county failed to take the remedial action authorized by the Department’s regulations.

Both parties sought judicial review of the AU’s decision. The district court determined that HCMC was entitled to all of the funds requested and remanded the case to the AU to determine the appropriate amount. On remand, the parties stipulated that the amount of the unpaid patient contributions was $21,191. The district court [831]*831then entered judgment for this amount plus prejudgment interest.

I

The Department contends that the trial court erred in requiring it to pay HCMC any funds which were not collectible from the patients. We agree in part.

Medicaid is a cooperative federal-state program that provides federal financial assistance to states to subsidize certain costs of medical treatment for low income individuals. Participation by a state is optional. However, once a state elects to participate, it must comply with the federal statutory scheme and the regulations promulgated by the Secretary of Health and Human Services. Harris v. McRae, 448 U.S. 297, 100 S.Ct. 2671, 65 L.Ed.2d 784 (1980); Geriatrics, Inc. v. Colorado Department of Social Services, 712 P.2d 1035 (Colo.App.1985).

Federal regulations require that “an agency must reduce its payment to an institution, for services provided an individual,” by the amount of that individual’s total income that remains after making the applicable deductions. See 42 C.F.R. §§ 435.-725, 435.733, & 435.832 (1990) (emphasis supplied). This requirement applies to state agencies and prohibits them from paying any amounts that are the responsibility of the patient.

The burden of collecting the patient’s share of costs is imposed upon the institutional provider. See Florence Nightingale Nursing Home v. Perales, 782 F.2d 26 (2d Cir.1986), cert. denied, 479 U.S. 815, 107 S.Ct. 68, 93 L.Ed.2d 26 (1986). But, an exception exists if state law mandates the payment of all costs by the state agency. See Seneca Nursing Home v. Secretary of Social & Rehabilitation Services, 604 F.2d 1309 (10th Cir.1979).

Based upon § 26-4-110, C.R.S. (1989 Repl.Vol. 11B), the regulations discussed in part II of this opinion were adopted by the Department and these regulations prohibit payment by the Department for any amount due from a patient. The parties disagree on whether these regulations violate the mandate of the statute. HCMC contends that the General Assembly mandated payment of all uncollected patient funds. The Department argues that this interpretation of the statute is incorrect. We conclude that an analysis of three subsections adopted in § 26-4-110 of the Colorado Medical Assistance Act is required to resolve this issue.

As pertinent here, § 26-4-110(l)(a), C.R.S. (1989 Repl.Vol. 11B) provides that:

“The state department shall establish rules and regulations for the payment of vendors under this article ... [S]uch rules and regulations shall provide reasonable compensation to such vendors, but no vendor shall, by this section or any other provision of this article, be deemed to have any vested right ... to receive any payment in addition to or different from that which is currently payable on behalf of a recipient at the time the medical benefits are provided by said vendor.” (emphasis supplied)

Section 26-4-110(4)(a), C.R.S. (1989 Repl. Vol. 11B) further provides that:

“Any recipient receiving benefits under this article who receives any supplemental income, available for medical purposes under rules and regulations of the state department or who receives proceeds from sickness, accident, health, or casualty insurance shall apply such supplemental income to the cost of the benefits rendered....” (emphasis supplied)

Finally, § 26-4-110(7), C.R.S. (1989 Repl. Vol. 11B) provides that:

“Payments under this article shall be made by the state department, and the total cost of providing medical benefits shall be borne by the state; except that two percent of the costs of intermediate care nursing home services not provided in state institutions shall be borne by the county departments.... ” (emphasis supplied)

Cf. § 26-4-110(7), C.R.S. (1990 Cum.Supp.) (Effective July 1, 1991, two percent exception removed.).

A review of § 26-4-110(7) standing alone supports HCMC’s contention. However, we are obliged to consider the entire statu[832]*832tory scheme in order to carry out the intent of the General Assembly and to give, effect, if possible to each provision of the statute. Section 2-4-201(l)(b), C.R.S. (1980 Repl.Vol. IB).

Viewed in that context, we conclude that the state’s obligation in § 26-4-110(7) to provide the “total cost” of medical benefits is modified by § 26-4-110(l)(a) in which the provider is forewarned that, subject to the regulatory exception discussed in part II of this opinion, no vested right may be obtained under the Colorado Medical Assistance Act to any payment in addition to that which is payable by the Department on behalf of the patient at the time medical benefits are provided. Otherwise, the nursing home would be entitled to payments which were not due from the Department at the time care was provided.

Therefore, we hold that the statute does not authorize the full award requested by HCMC.

II

The next issue remaining for resolution is whether the ALJ was correct in concluding that the Department was liable for uncollected amounts due from patients when HCMC promptly notified the county of the deficiency and the county failed to pursue the remedial action authorized by Department regulation. We conclude that the AU was correct.

Pursuant to the Act, the Department adopted two regulations that are pertinent here.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Gutierrez v. Bussey
837 P.2d 272 (Colorado Court of Appeals, 1992)
Christy v. Ibarra
826 P.2d 361 (Colorado Court of Appeals, 1991)

Cite This Page — Counsel Stack

Bluebook (online)
813 P.2d 829, 15 Brief Times Rptr. 754, 1991 Colo. App. LEXIS 156, 1991 WL 95895, Counsel Stack Legal Research, https://law.counselstack.com/opinion/colorado-department-of-social-services-v-health-care-management-coloctapp-1991.