• Are "Balance Bill" Liens Legal or Enforceable?
  • September 7, 2016 | Authors: Danielle J.K. Constant; James W. Kaucher
  • Law Firm: Gust Rosenfeld P.L.C. - Tucson Office
  • In the recent Abbott v. Banner Health Network decision, the Arizona Supreme Court left unanswered the question of whether health care facilities can record balance bill liens on Arizona Health Care Cost Containment System (AHCCCS) patients.

    Plaintiffs were AHCCCS patients who sued a third party for injuries. In accordance with A.R.S. §§33-931 and 36-2903.01(G), Banner asserted a "balance billing" lien for the amount in excess of what it was paid by AHCCCS. After the plaintiffs settled their cases, they negotiated a settlement with Banner regarding the liens.

    The Court of Appeals struck down the settlements, finding that federal law explicitly prohibited balance billing on AHCCCS (Medicaid) claims. Accordingly, the court concluded that the liens were unlawful. The Supreme Court reversed, pointing out that the settlements could stand under the principles of accord and satisfaction and that it did not need to decide on whether these balance bill liens were legal.

    Where does this leave you? Although the Arizona Supreme Court discussed the issue, it did not decide whether a balance billing lien involving an AHCCCS patient is legal. Because of this, hospitals and other entities that benefit from A.R.S. §§33-931 and 36-2903.01(G) should expect that AHCCCS patients will challenge the enforceability of these liens. The court's language in Abbott suggests that these liens - at least in cases in which the patient's care has been paid for by AHCCCS, ALTCS, or other such programs - might be in jeopardy.