July 18, 2019

Colorado Court of Appeals: No Error in Trial Court’s Calculation of Medicaid Lien

The Colorado Court of Appeals issued its opinion in State of Colorado Department of Health Care Policy & Financing v. S.P. on Thursday, June 18, 2015.

Accident—Medicaid—Settlement—Statutory Lien—Calculation.

S.P. was injured in a snowboarding accident at a ski area. As a result of her injuries, she is a paraplegic and will require ongoing medical care and assistance for the rest of her life. She applied for Medicaid assistance and was accepted. Over the course of several years, Medicaid paid $142,779 for her accident-related medical care. S.P. sued the ski area, alleging negligence, and eventually settled the case for $1 million. Medicaid was entitled to a statutory lien against the settlement for repayment of the medical assistance it had provided. The settlement agreement, however, did not specify the portion of the settlement amount attributable to medical expenses, as opposed to other categories of damages. The Medicaid administration agency sued S.P. to enforce its lien.

On appeal, both parties argued that the trial court incorrectly calculated the amount S.P. was required to repay to Medicaid. Colorado has not enacted statutory, administrative or other procedures for apportioning third-party settlements for Medicaid lien purposes. The trial court applied a proportional allocation formula to determine what amount out of S.P.’s settlement funds should be considered compensation for past medical expenses. The trial court also relied on an objective indication of S.P.’s total past medical expenses that was supported by the record.

The Court of Appeals held that the decision to rely on the amount paid rather than the amount billed by Medicaid was not clearly erroneous, and that the trial court’s method in this case was neither unreasonable nor arbitrary. The trial court also did not err in applying its formula to the gross settlement amount and properly took attorney fees into consideration in reducing the amount owed to Medicaid. The judgment was affirmed and the case was remanded to the trial court to release the funds held in its registry pursuant to the judgment.

Summary and full case available here, courtesy of The Colorado Lawyer.

Colorado Supreme Court: Assignment Ineffective Where Personal Injury Suit As Yet Undetermined

The Colorado Supreme Court issued its opinion in Allstate Insurance Co. v. Medical Lien Management, Inc. on Tuesday, May 26, 2015.

Purported Assignment of Future Contract Rights—Purported Assignment of Future Personal Injury Proceeds.

Allstate Insurance Co. (Allstate) petitioned for review of the court of appeals’ judgment reversing the dismissal of a breach of assignment claim brought by Medical Lien Management, Inc. (MLM). Notwithstanding allegations of the complaint to the contrary, the district court effectively construed MLM’s Lien and Security Agreement with a motor vehicle accident victim, upon which the complaint was premised, as failing to assign the victim’s right to the proceeds of his personal injury lawsuit against Allstate’s insured. By contrast, the court of appeals found a valid assignment to MLM of all rights to the future proceeds from the victim’s personal injury claim in an amount equal to the costs of medical services paid for by MLM, as well as a sufficient allegation in the complaint of an enforceable obligation by Allstate to pay the assigned sums to MLM. The Supreme Court reversed, holding that the court of appeals erred in finding the purported assignment in this case—an as-yet indeterminable portion of proceeds of an unresolved personal injury claim—to be effective against Allstate.

Summary and full case available here, courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Substantial Compliance with Notice Provisions Sufficient for Hospital to Enforce Lien

The Colorado Court of Appeals issued its opinion in Wainscott v. Centura Health Corporation on Thursday, August 14, 2014.

Auto Accident—Hospital Lien Statute—Notice—Substantial Compliance—Colorado Consumer Protection Act—Fraudulent Concealment.

Donald Wainscott was injured in an auto accident caused by third parties (tortfeasors). He received treatment at St. Anthony Central Hospital, which is managed and operated by Centura Health Corporation. To secure payment of these medical expenses, Centura asserted a statutory hospital lien against any settlement or judgment that Donald Wainscott might receive as a result of the accident. The trial court declared that Centura’s failure to strictly comply with the hospital lien statute rendered its lien unenforceable.

On appeal, Centura argued that it substantially complied with the hospital lien statute and that the trial court erred in finding the lien was unenforceable. Because minor filing and notice deficiencies should not invalidate an otherwise valid hospital lien, substantial compliance may be sufficient to satisfy the filing and notice provisions of Colorado’s hospital lien statute. A lienholder substantially complies when it satisfies the statute’s purposes through timely actual notice of the lien to those against whom the lienholder attempts to enforce the lien. Because Centura did identify and serve the tortfeasors’ insurer and Donald Wainscott, Centura substantially complied with the hospital lien statute and the trial court erred in finding the lien was not enforceable.

On cross-appeal, the Wainscotts contended that the district court erroneously dismissed their Colorado Consumer Protection Act (CCPA) and fraudulent concealment claims under CRCP 12(b)(5) for failure to state a claim on which relief can be granted. The basis of the Wainscotts’ CCPA claim was an injury resulting from Centura’s failure to bill Medicare. However, during the period of time in question, Centura was required to refrain from billing Medicare and to seek payment from the tortfeasors’ liability insurer. Thereafter, it had the option of billing Medicare. Centura’s failure to advise the Wainscotts that it was obeying the law did not constitute a deceptive or unfair trade practice. Further, Centura did not have a duty to disclose that it planned to pursue payment from the tortfeasors or their insurer.Accordingly, the district court properly dismissed the CCPA and fraudulent concealment claims.

The district court’s dismissal of the Wainscotts’ CCPA and fraudulent concealment claims was affirmed. The summary judgment as to the Wainscotts’ declaratory action to determine the validity of Centura’s hospital lien was reversed. The case was remanded for further proceedings to determine whether the amount of Centura’s asserted lien represents “reasonable and necessary charges” under CRS § 38-27-101.

Summary and full case available here, courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Counterclaims Asserted in Original Answer to Complaint and Need Not be Reasserted in Response to Amended Complaint

The Colorado Court of Appeals issued its opinion in Mullins v. Medical Lien Management, Inc. on Thursday, September 26, 2013.

Car Accident—Settlement—Lien—Counterclaim—Evidence—Testimony—Hearsay—Admission—Lay Witness.

Plaintiff Jerry Mullins appealed the trial court’s judgment in favor of defendant Medical Lien Management Inc. (MLM). The judgment was affirmed.

This interpleader action stems from settlement proceeds recovered by Mullins due to a car accident. Mullins’s law firm, Darrell S. Elliott, P.C. (DSE), withheld a portion of the settlement pursuant to the fee agreement. However, MLM claimed to hold a medical lien of $17,081.10 on the settlement funds, which represented charges for care provided to Mullins by SpineOne P.C., as a result of injuries sustained by Mullins in the car accident.

Mullins asserted that the trial court erred in ruling in favor of MLM on its counterclaims because MLM had abandoned its counterclaims when it failed to reassert them in its answer to Mullins’s amended complaint. MLM had asserted counterclaims in its original Answer and continued to pursue those counterclaims during the case. Therefore, MLM did not waived its right to pursue them, and the trial court did not err in permitting MLM to litigate its counterclaims, even though it did not reassert them in responding to Mullins’s Amended Complaint.

Mullins also asserted that the trial court abused its discretion by admitting evidence and testimony presented by MLM because MLM failed to provide notice of the evidence to Mullins before trial. MLM’s first fourteen trial exhibits were identical to the exhibits MLM had attached to its summary judgment motion. The remaining exhibits were documents Mullins had given to MLM as part of the parties’ initial discovery disclosures. Accordingly, Mullins was familiar with the content of the trial exhibits, and their late disclosure could not have caused Mullins surprise that would have required their exclusion. Further, Mullins had notice of the witness’s identity because an affidavit in support of MLM’s motion for summary judgment contained statements from the witness similar to his testimony. Thus, the trial court did not abuse its discretion by allowing MLM’s witness to testify.

Mullins further argued that the trial court abused its discretion by allowing MLM’s witness to testify as a lay witness about the reasonableness and necessity of SpineOne’s medical bills. The witness’s conclusions, however, did not involve a process of reasoning that could not be reached by an ordinary citizen without specialized training or experience. Therefore, the trial court did not err in allowing this witness to testify about his lay opinion.

Finally, Mullins’s argument that the trial court abused its discretion by admitting numerous exhibits that contained hearsay failed because all three documents constituted admissions by a party opponent. The trial court’s judgment was affirmed.

Summary and full case available here.