Harvey v. Catholic Health Initiatives

2021 CO 65

Peggy Harvey, Petitioner: v. Catholic Health Initiatives d/b/a Centura Health-St. Anthony Hospital and Centura Health Corporation, Respondents Eileen Manzanares, Petitioner v. Centura Health Corporation a/k/a Catholic Health Initiatives Colorado, d/b/a St Mary-Corwin Hospital of Pueblo, Colorado, d/b/a Centura Health-St Mary Corwin Medical Center, Respondent

Nos. 20SC261, 20SC784

Supreme Court of Colorado, En Banc

September 13, 2021

C.A.R 50 Certiorari to the Colorado Court of Appeals Court of Appeals Case Nos. 19CA1522, No. 19CA91 Pueblo County District Court Case No. 19CV30025 Honorable Allison P. Ernst, Judge

Attorneys for Petitioner Peggy Harvey: Franklin D. Azar &amp Associates, P.C. Robert E. Markel Aurora, Colorado

Attorneys for Petitioner Eileen Manzanares Robert J. Anderson, P.C. Scott F. Anderson Robert J. Anderson Fotios M. Burtzos Colorado Springs, Colorado

Attorneys for Respondents Catholic Health Initiatives and Centura Health Corporation: McConnell Van Pelt, LLC Traci L. Van Pelt Denver, Colorado

Attorneys for Amicus Curiae Associated Collection Agencies of Colorado/Wyoming/New Mexico, Inc.: Greenberg Sada & Moody, P C Alan Greenberg Englewood, Colorado, Professional Finance Company, Inc. Nicholas J. Prola Greeley, Colorado

Attorneys for Amicus Curiae Colorado Creditor Bar Association Markus Williams Young & Hunsicker, LLC Kimberly L. Martinez Denver, Colorado

Attorneys for Amicus Curiae Colorado Defense Lawyers Association Messner Reeves LLP Kendra N. Beckwith Denver, Colorado

Attorneys for Amicus Curiae Colorado Hospital Association Caulfield Law, LLC Sharon E. Caulfield Boulder, Colorado

Attorneys for Amicus Curiae Colorado Trial Lawyers Association Leventhal Puga Braley, P.C. Rob y n Levin Clarke Denver, Colorado, Burg Simpson Eldredge Hersh & Jardine, P.C. Nelson Boyle David Dean Batchelder Englewood, Colorado

OPINION

GABRIEL, JUSTICE

¶1 These cases require us to examine the interplay between Colorado's hospital lien statute, § 38-27-101, C.R.S. (2020) (the "Lien Statute"), and the federal Medicare Secondary Payer statute, 42 U.S.C. § 1395y (2021) (the "MSP Statute"). Specifically, we must decide whether, under our Lien Statute, a hospital must bill Medicare before it can file a lien against a patient who has been injured in an accident and whose primary health insurance is provided by Medicare.^[1]

¶2 The Lien Statute provides that before a lien is created, every duly licensed hospital that treats a person injured through the negligence or other wrongful acts of another must first

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.

§ 38-27-101(1).

¶3 The parties dispute whether when, as here, Medicare is a person's principal source of health coverage, Medicare can be considered a "primary medical payer of benefits" under the Lien Statute (such that a hospital must bill Medicare before asserting a lien), or if such an interpretation is barred by the MSP Statute, which designates Medicare as a "secondary payer." § 1395y(b)(2).

¶4 We now conclude that when Medicare is a patient's primary health insurer, the Lien Statute requires a hospital to bill Medicare for the medical services provided to the patient before asserting a lien against that patient. Such an interpretation is consistent with the language of the Lien Statute, which distinguishes between "the property and casualty insurer," on the one hand, and "the primary medical payer of benefits," on the other, and also reflects our legislature's intent to protect insureds from abusive liens. Moreover, this interpretation yields no conflict between the Lien Statute and the MSP Statute. Hospital liens are governed by state, not federal, law, and merely enforcing our Lien Statute does not make Medicare a primary payer of medical benefits in violation of the MSP Statute.

¶5 Accordingly, we reverse the decisions of the division below in Harvey v. Centura Health Corp., 2020 COA 18M, 490 P.3d 564, and of the district court in Manzanares v. Centura Health Corp., No. 19CV30025 (D. Ct., Pueblo Cnty. July 16, 2019).

I. Facts and Procedural History

¶6 The facts in these two cases are similar and, in pertinent part, undisputed. Peggy Harvey and Eileen Manzanares were injured in separate car accidents when their cars were struck by other drivers. Each was then taken to a Centura-affiliated hospital (along with Centura Health Corporation, "Centura") for treatment. At the time they were treated by Centura, both women's health insurance was solely through Medicare and Medicaid. And both women's injuries resulted in hospital stays, with Harvey incurring $15, 611.39 in medical expenses and Manzanares incurring $154, 553.25 in such expenses.

¶7 In addition to the above-described health insurance, both Harvey and Manzanares had automobile insurance, Harvey through GEICO and Manzanares through State Farm. These policies included medical payment ("Med Pay") coverage for medical bills incurred as a result of a motor vehicle accident. In addition, the third-party tortfeasors who caused Harvey's and Manzanares's injuries also had automobile insurance.

¶8 Both Harvey and Manzanares advised Centura of all of the available health and automobile insurance policies. Centura then assigned the women's accounts to a collection agency, Avectus Healthcare Solutions, for processing, and Avectus apparently submitted Centura's medical expenses to each of the automobile insurers involved, including the automobile insurers for Harvey, Manzanares, and the third-party tortfeasors. Within two weeks after submitting these charges to the various automobile insurers (and within two months of the women's respective discharges from their hospital stays), Centura filed hospital liens against both of the women. These liens stated that they were in favor of the pertinent hospital

for all reasonable and necessary charges for hospital care upon the net amount payable to the injured person named below, his/her heirs, assigns or legal representatives, out of the total amount of any recovery or sum had or collected, or to be collected whether by judgment, settlement or compromise by said injured person, his/her heirs, assigns or legal representatives, as damages on account of such injuries.

Centura concedes that it did not bill either Medicare or Medicaid before filing the above-described liens.

¶9 Both Harvey and Manzanares subsequently brought suit, alleging that Centura had violated the Lien Statute by not billing Medicare for the services provided to the women prior to filing the above-described liens.^[2] In their respective complaints, each woman asserted that (1) the Lien Statute requires hospitals to bill both the property and casualty insurer and the primary medical payer of benefits before filing a lien and (2) Centura did not bill Medicare, the primary medical payer of benefits in her case, before asserting the lien at issue. Pursuant to section 38-27-101(7), each woman thus demanded judgment in the amount of two times the stated value of her respective lien.

¶10 Centura subsequently moved to dismiss both women's claims, the district courts treated Centura's motions as motions for summary judgment, and the courts ultimately granted those motions (the order in Harvey's case was issued approximately eight months earlier than the order in Manzanares's case). In so ruling, the district courts concluded that Centura had no obligation to bill Medicare before filing the liens at issue because (1) the Lien Statute requires only that hospitals bill primary medical payers of benefits if allowed under both state and federal law and (2) although the women's primary health insurer was Medicare, federal law required that Medicare be treated as a secondary payer.

¶11 Harvey appealed, but in a unanimous, published decision, a division of the court of appeals affirmed the district court's judgment in her case. Harvey, ¶ 1, 490 P.3d at 565. In so ruling, the division concluded that Centura did not violate section 38-27-101 because, although Medicare falls within the definition of a "payer of benefits" under that statute, it was not a primary payer of Harvey's benefits. Id. at ¶¶ 16, 27, 490 P.3d at 567, 569. Rather, it was a secondary payer because, in the division's view, under the MSP Statute, Medicare is a secondary payer whenever other insurers (here, the automobile insurers) are responsible for providing primary coverage. Id. at ¶ 20, 490 P.3d at 567-68. Harvey then filed a petition for a writ of certiorari in this court, and we granted that petition.

¶12 While Harvey's case was pending on appeal but before the division had issued its opinion in that case, Manzanares also filed a notice of appeal. After briefing had been completed in Manzanares's appeal, a division of the court of appeals requested certification of that case to this court pursuant to section 13-4-109(1), C.R.S. (2020), and C.A.R. 50, noting that the precise question raised by Manzanares was, by that time, pending before this court in Harvey's case. We granted the division's request and transferred Manzanares's case to this court.

¶13 We now resolve both cases together.

II. Analysis

¶14 We begin by setting forth the applicable standards governing our review of motions for summary judgment and statutory construction. Applying those standards here, we conclude that the pertinent language of the Lien Statute is ambiguous,...