v. Centura

2020 COA 18, 490 P.3d 564

• Court: Colorado Court of Appeals
• Decided: January 30, 2020
• Docket: 19CA0091, Harvey
• Status: Published

Opinion

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.

——————————————————————— 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.