Gister v. Am. Family Mut. Ins. Co.
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In this case the Supreme Court was asked to decide whether a charitable hospital may pursue payment for medical care provided to a Medicaid-eligible patient by filing a lien against a settlement between the patient and an insurance company covering the liability of a tortfeasor responsible for the patient's injuries. To answer the question, the Court balanced the complex state and federal legal framework surrounding Medicaid with Wis. Stat. 779.80 (hospital lien statute). The Court concluded that the soundest harmonization of the two permitted the liens at issue here. In so doing, the Court reversed the court of appeals, which reversed the circuit court's reasoning that the hospital was authorized to either file the liens or bill Medicaid.
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2012 WI 86 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 2009AP2795 Jaymie A. Gister, Ethan A. Gister, a minor by his Guardian ad Litem, David E. Sunby, and Jared L. Ellis, a minor by his Guardian ad Litem, David E. Sunby, Plaintiffs-Appellants, v. American Family Mutual Insurance Company, Defendant, Saint Joseph's Hospital of Marshfield, Inc., Defendant-Respondent-Petitioner. REVIEW OF A DECISION OF THE COURT OF APPEALS Reported at: 330 Wis. 2d 834, 794 N.W.2d 927 (Ct. App. 2010 Unpublished) OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: SOURCE OF APPEAL: COURT: COUNTY: JUDGE: July 11, 2012 October 7, 2011 Circuit Dane Patrick J. Fiedler JUSTICES: CONCURRED: DISSENTED: BRADLEY, J., dissents (Opinion filed). ABRAHAMSON, C.J., and CROOKS, J., join dissent. NOT PARTICIPATING: ATTORNEYS: For the defendant-respondent-petitioner there were briefs by Timothy W. Feeley, Sara J. MacCarthy and Hall, Render, Killian, Heath & Lyman, P.C., Milwaukee, and oral argument by Timothy W. Feeley. For the plaintiff-appellant there was a brief by David E. Sunby, Rhonda L. Lanford and Habush Habush & Rottier S.C., Wausau, and oral argument by Rhonda L. Lanford. An amicus curiae brief was filed by Matthew A. Biegert and Doar, Drill Association & Skow, S.C., New Richmond, for for the Wisconsin Justice. 2012 WI 86 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2009AP2795 (L.C. No. 2009CV1608) STATE OF WISCONSIN : IN SUPREME COURT Jaymie A. Gister, Ethan A. Gister, a minor by his Guardian ad Litem, David E. Sunby, and Jared L. Ellis, a minor by his Guardian ad Litem, David E. Sunby, Plaintiffs-Appellants, FILED v. JUL 11, 2012 American Family Mutual Insurance Company, Diane M. Fremgen Clerk of Supreme Court Defendant, Saint Joseph's Hospital of Marshfield, Inc., Defendant-Respondent-Petitioner. REVIEW of a decision of the Court of Appeals. ¶1 per MICHAEL curiam J. GABLEMAN, decision of the J. court We review of Reversed. an appeals,1 unpublished, reversing a declaratory judgment of the Dane County Circuit Court, Patrick J. Fiedler, Judge. 1 Gister v. Am. Family Mut. Ins. Co., No. unpublished slip op. (Wis. Ct. App. Nov. 11, 2010). 2009AP2795, No. ¶2 2009AP2795 We are asked to decide whether a charitable hospital may pursue payment for medical care provided to a Medicaid- eligible patient by filing a lien against a settlement between the patient and an insurance company covering the liability of a tortfeasor responsible for the patient's injuries. To answer the question, we must harmonize the complex state and federal legal framework surrounding Medicaid with section 779.80 ("hospital lien statute"). Wisconsin Statutes We conclude that the soundest harmonization of the two permits the liens at issue here, and we therefore reverse the court of appeals. I. ¶3 The relevant facts BACKGROUND are undisputed. Jeffrey Mohr negligently ran a stop sign and crashed into a car containing Jaymie Gister her sons Ethan Gister and Jared Ellis Another son of Jaymie Gister, Skylar Gister,2 was ("Gisters"). also and injured in the accident, as were several unrelated individuals, none of whose claims relate to this case. The vehicle Mohr was driving belonged to Jonathan and Mabel Harms, who had it insured with American Family Mutual Insurance Company ("American Family"). The American Family policy provided coverage of up to $250,000 for each injured individual, with a total cap of $500,000 for each accident. The Gisters suffered injuries of varying severity, and all four were treated at St. 2 We do not include Skylar Gister who received medical care from St. Joseph's valued at $355,770.36 in the "Gisters" referred to herein because the challenged liens which form the basis of this action did not name him. 2 No. Joseph's Hospital ("St. Joseph's"). Joseph's,3 the Gisters received 2009AP2795 As later calculated by St. medical care valued in the aggregate of $182,799.61, broken down as follows: Ethan Gister $9,612.66, Jared Ellis $17,552.56, Jaymie Gister $155,634.39. ¶4 The Gisters were all eligible for Medicaid at the time of the accident, and St. Joseph's billed Medicaid for the cost of Skylar Gister's medical care.4 It did not bill Medicaid, however, for the other three Gisters, instead filing three liens ("St. Joseph's liens") pursuant to the hospital lien statute5 3 The Gisters do not contest the charges as unreasonable. 4 The Gisters repeatedly emphasized in their briefs and at oral argument the fact that St. Joseph's submitted a bill to Medicaid for Skylar Gister's medical expenses, unlike the other Gisters. St Joseph's decision in that regard was not attacked at the circuit court, nor was it challenged at the court of appeals. We therefore decline to address the issue. See In re Commitment of Mark, 2006 WI 78, ¶34 n.13, 292 Wis. 2d 1, 718 N.W.2d 90 (reiterating that this court ordinarily refuses to consider issues not raised below). 5 The hospital lien statute reads, in pertinent part: (1) Every corporation, association or other organization operating as a charitable institution and maintaining a hospital in this state shall have a lien for services rendered, by way of treatment, care or maintenance, to any person who has sustained personal injuries as a result of the negligence, wrongful act or any tort of any other person. (2) Such lien shall attach to any and all rights of action, suits, claims, demands and upon any judgment, award or determination and upon the proceeds of any settlement which such injured person, or legal representative might have against any such other person for damages on account of such injuries, for the amount of the 3 No. 2009AP2795 against the proceeds of any future settlement reached between each of the Gisters and American Family in the amount of the calculated medical charges. II. ¶5 After St. PROCEDURAL HISTORY Joseph's liens were filed, both parties submitted motions for declaratory judgment in circuit court, St. Joseph's seeking an order declaring the liens valid, and the Gisters seeking one declaring them unenforceable. The circuit court concluded that the liens were valid and enforceable, and therefore granted St. Joseph's motion and denied the Gisters'. In an oral opinion, the circuit court reasoned that St. Joseph's was authorized by reasonable hospital. Wisconsin and Administrative necessary Code charges of section DHS such Wisconsin Statutes section 779.80 (2005-06). The first two liens (naming Ethan Gister and Jared Ellis) were filed in November 2006. The final lien (naming Jaymie Gister) was filed in January 2007. We cite to the statutes and regulations in effect when the first two liens were filed. No relevant language in any of the statutes or regulations changed during the months that elapsed between the filing of the first two liens and the filing of the third and final one. All subsequent references to the Wisconsin Statutes are to the 2005-06 version unless otherwise indicated. 4 No. 106.03(8)6 to either file the liens or bill Medicaid. 2009AP2795 The court rejected the Gisters' argument that Wis. Stat. § 49.49(3m)(a) (prohibiting hospitals from "knowingly impos[ing] direct charges upon a [patient] in lieu of obtaining payment" from Medicaid) barred the liens, holding that St. Joseph's constitute "direct charges" upon the Gisters. likewise liens rejected were the invalid Gisters' under Dorr contention v. Sacred liens did not The circuit court that Heart St. Joseph's Hosp., 228 Wis. 2d 425, 597 N.W.2d 462 (Ct. App. 1999), distinguishing that decision because Dorr involved patients protected by contractual and statutory immunity as a result of their Health Maintenance Organization ("HMO"). ¶6 The Gisters appealed. In an unpublished, per curiam opinion, the court of appeals reversed and remanded. Gister v. Am. Family Mut. Ins. Co., No. 2009AP2795, unpublished slip op. (Wis. Ct. App. Nov. 6 Wisconsin Administrative Code section DHS 106.03(8) provides, in pertinent part, that "[i]f a [hospital] treats a [patient] for injuries or illness sustained in an event for which liability may be contested . . . the [hospital] may elect to bill [Medicaid] for services provided without regard to the possible liability of another party . . . . The [hospital] may alternatively elect to seek payment by joining in the [patient's] personal injury claim . . . , but in no event may the [hospital] seek payment from both [Medicaid] and a personal injury . . . claim. Once a [hospital] accepts the [Medicaid] payment for services provided to the [patient], the [hospital] shall not seek or accept payment from the [patient's] personal injury . . . claim." Many of the statutes, regulations, and judicial opinions that we discuss refer generally to "health care providers." We paraphrase "providers" as "hospitals" in the interest of clarity, consistency, and specificity to the facts at hand. For the same reasons, we refer to "patients" where other authorities characterize individuals who receive healthcare services with the term "recipients." 5 No. 11, 2010). 2009AP2795 Applying Dorr, the court of appeals concluded that a lien upon a settlement between a tortfeasor and a patient is, in effect, a lien against the patient, and therefore requires a debt owed by the patient to the hospital. Id., ¶13. In light of that reasoning, the court of appeals determined that Medicaid bore the debt to St. Joseph's, not the Gisters, and since a lien against the settlement was a lien against the Gisters it was therefore impermissible. Id., ¶¶14-15. rejected St. Joseph's 106.03(8)(allowing personal injury argument hospitals lawsuits to when that The court of appeals Wis. either bill liability provided authority for the liens. Admin. Code Medicaid "may be" Id., ¶¶18-20. § DHS or join contested) According to the court, § 106.03(8) said nothing about seeking payment from third-party liability settlements, nor did it demonstrate that the Gisters owed a debt to the hospital, and the court concluded that the provision Joseph's liens. reversed and had Id. remanded no bearing on Consequently, the cause to the the the validity court of circuit of St. appeals court with directions to issue an order holding St. Joseph's liens invalid. Id., ¶22. ¶7 We granted St. Joseph's petition for review and now reverse. III. STANDARD OF REVIEW ¶8 When a circuit court's ruling on motions for declaratory judgment depends on questions of law, we review the ruling de novo. J.G. v. Wis. 2d 329, 753 N.W.2d 475. Wangard, 2008 WI 99, ¶18, 313 There were no disputed issues of 6 No. fact at the circuit court, and the circuit court's 2009AP2795 decision rested on its interpretation of statutes, regulations, and case law. These are all legal questions and we therefore review the ruling de novo, while benefiting from our own prior analyses and those of the lower courts. State v. Henley, 2010 WI 97, ¶29, 328 Wis. 2d 544, 787 N.W.2d 350, cert. denied, 565 U.S. __, 132 S. Ct. 784 (2011). IV. ¶9 We variety of are STATUTORY INTERPRETATION called statutes upon and to interpret regulations. When and harmonize conducting a such interpretations, we begin with certain background principles in mind. We must give language "its common, ordinary, and accepted meaning, phrases meaning." except are that given technical their or specially-defined technical or special words or definitional State ex rel. Kalal v. Circuit Court for Dane Cnty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110. Our analysis is also guided by the context and structure of the statute under consideration. Id., ¶46. Examining statutes in light of their context, we strive to avoid "absurd or unreasonable results." Id. At all times, we endeavor to ascertain meaning, not to "search for ambiguity." Id., ¶47. Where, as here, the statutes are unambiguous, we need not consult extrinsic sources, such as legislative history. Id., ¶50. Instead, we look only to the plain language, purpose, context, and structure of the statutes. Id., ¶51. V. DISCUSSION 7 No. ¶10 were 2009AP2795 There is no contention here that St. Joseph's liens improperly filed under the hospital lien statute.7 Therefore, the only question is whether they were barred by some other authority. ¶11 The Gisters propose two such authorities. First, they argue that Wis. Stat. § 49.49(3m)(a) bars St. Joseph's liens because they constitute "direct charges" imposed by a hospital on Medicaid-eligible patients. Second, they submit that Dorr forbids St. Joseph's liens, chiefly because, under Dorr, the Gisters' eligibility for Medicaid means that the family did not owe St. Joseph's a debt and a lien against the settlement with American Family (in effect, according to the Gisters, a lien against them) is therefore impermissible. We contention in turn and find neither persuasive. we hold that St. Joseph s liens were fully treat each In particular, consistent with federal law and thus, to the extent Wis. Stat. § 49.49(3m)(a) incorporates federal law, the statute does not bar the liens and Wisconsin Medicaid is in compliance 7 with the federal The dissent insufficiently addresses this point. Instead, it presents a slippery-slope argument, asking "what other property belonging to a Medicaid recipient could the hospital seek?" Dissent, ¶74. This approach neglects the fact that the sole authority for the liens in question is the hospital lien statute, which carefully circumscribes the kinds of property a hospital can seek in such circumstances. See Wis. Stat. § 779.80(2) (making clear that hospital liens attach only "to any and all rights of actions, suits, claims, demands and upon any judgment, award or determination and upon the proceeds of any settlement which such injured person, or legal representative might have against any such person for damages on account of such injuries . . . ."). 8 No. requirements. 2009AP2795 We further hold that to the extent § 49.49(3m)(a) imposes an additional requirement to federal law, the statute likewise does not bar St. Joseph's liens. Finally, we hold that Dorr does not control because it dealt with different factual and legal circumstances. Accordingly, we conclude that St. Joseph's liens were permissible. A. Wisconsin Stat. § 49.49(3m)(a) Does Not Bar St. Joseph's Liens ¶12 The Gisters submit that St. Joseph's liens constituted "direct charges" by a hospital levied upon a Medicaid-eligible patient, and are § 49.49(3m)(a). liens were therefore show consistent how under Wis. Stat. We conclude, to the contrary, that St. Joseph's with language of § 49.49(3m)(a). also invalid our federal law and with the plain In support of our conclusion, we interpretation of § 49.49(3m)(a) harmonizes the provision with related regulations. best As a result, we hold that § 49.49(3m)(a) did not bar St. Joseph's liens. 1. The Framework of Medicaid and Third Party Liability ¶13 in the Although there is no federal cause of action asserted case framework to at bar, analyze federal the law case provides because it the defines Wisconsin Medicaid's features and obligations. mind, we begin with an overview of appropriate Medicaid many of With that in and of its provisions for the collection of medical expenses where there is potential third party liability, as that overview sets the stage for our consideration of the liens at issue here. 9 No. ¶14 The federal and state governments 2009AP2795 jointly fund and manage Medicaid, Harris v. McRae, 448 U.S. 297, 301 (1980), a program created to provide health care to the indigent. U.S.C. § 1396. "cooperative Medicaid federalism," is an whereby exercise states in 42 so-called voluntarily opt into the federal scheme and thereby bind themselves to abide by the rules and regulations imposed return for federal funding. by the federal government Harris, 448 U.S. at 308. in The State of Wisconsin has joined the federal Medicaid system, and has consequently committed governing that system. itself to following the federal law Ellsworth v. Schelbrock, 2000 WI 63, ¶10, 235 Wis. 2d 678, 611 N.W.2d 764. Absent a showing to the contrary, we presume that Wisconsin follows the federal rules it has pledged to uphold. See Rathie v. Ne. Wisconsin Technical Inst., 694, 142 Wis. 2d 685, 419 N.W.2d 296 (Ct. App. 1987) ("declin[ing] to render [a] federal [a]ct superfluous or put [a state] institution between in violating the precarious [state position law]. . . or of losing choosing presumably essential federal funding."). ¶15 The federal government requires states participating in Medicaid to institute "third party liability . . . programs" designed to "ensure that Federal and State funds are not misspent for covered services to eligible Medicaid recipients when third parties exist that are legally liable to pay for those services." Other Provisions Medicaid Programs; State Plan Requirements and Relating to State Third Programs, 55 Fed. Reg. 1423, 1423-24 (1990). 10 Party Liability Such programs must No. 2009AP2795 set forth methods for discovering when third parties are legally obligated to pay for medical expenses covered by the plan. U.S.C. § 1396a(25)(A). 42 They must also establish a system for pursuing third party funds where they are available. 42 U.S.C. § 1396a(25)(B). 2. Federal Law does not Bar St. Joseph's Liens ¶16 Of the federal regulations concerning third party liability, the most important to this litigation is 42 U.S.C. § 1396a(25)(C). That provision requires state Medicaid plans to ensure that in the case of an individual who is entitled to medical assistance under the State plan with respect to a service for which a third party is liable for payment, the person furnishing the service may not seek to collect from the individual (or any financially responsible relative or representative of that individual) payment of an amount for that service (i) if the total of the amount of the liabilities of third parties for that service is at least equal to the amount payable for that service under the plan . . . . § 1396a(25)(C). In other words, hospitals "may not seek to collect [money] from [Medicaid-eligible] individuals where third parties are obliged to pay an amount at least equal to the 11 No. 2009AP2795 amount that would be paid by Medicaid for the service."8 Wesley Health Care Ctr., Inc. v. DeBuono, 244 F.3d 280, 281 (2d Cir. 2001). ¶17 Accordingly, a threshold question is whether liens such as St. Joseph's (that is, attaching to settlements between tortfeasors' insurers and Medicaid-eligible patients) constitute efforts "to collect from" the patient. U.S.C. § 1396a(25)(C)'s parallel Wisconsin limitations provision on enacted If they do not, then 42 such to efforts, ensure and the Wisconsin's compliance with the federal mandate, discussed below, do not come into play and our analysis can end there. If St. Joseph s liens do constitute efforts to "collect from" the Gisters, then we must examine the content of § 1396a(25)(C) more closely to determine whether it bars the liens. ¶18 liens Both case law and logic indicate that St. Joseph's must be considered an effort 8 "to collect from" the Health care providers are permitted by federal law to "charge Medicaid beneficiaries certain nominal cost-sharing amounts" so as "to prevent beneficiary over-utilization of health care services covered under Medicaid by imposing a nominal payment obligation on beneficiaries." Olszewski v. Scripps Health, 69 P.3d 927, 941 (Cal. 2003) (internal quotation marks, citations, and brackets removed). Similarly, Wisconsin Medicaid allows for the billing of Medicaid-eligible patients under certain circumstances. See Wis. Admin. Code DHS § 106.03(7)(d) ("[I]f . . . another health care plan makes payment to the recipient or another person on behalf of the recipient, the provider may bill the payee for the amount of the benefit payment and may take any legal action to collect the amount of the benefit payment from the payee . . . ."). 12 No. patients.9 2009AP2795 First, federal appellate decisions in this area of law have either assumed, Miller v. Gorski Wladyslaw Estate, 547 F.3d 273, 282 (5th Cir. 2008), or outright held that a lien directed at a future Medicaid-eligible against insurer). the settlement patient patient, between represents not against an the a tortfeasor attempted and a recovery tortfeasor (or his Spectrum Health Continuing Care Grp. v. Anna Marie Bowling Irrevocable Trust, 410 F.3d 304, 318 (6th Cir. 2005) ("[B]y seeking to enforce its lien, Spectrum is attempting to recover its customary herself . . . .") fee (emphasis from added). the As Medicaid the Sixth patient Circuit persuasively reasoned in Spectrum, the lien attaches only once the settlement is approved; and once the settlement is approved, the money belongs to the patient, not the tortfeasor (or, here, his insurer). Id.; see also Olszewski v. Scripps Health, 69 P.3d 927, 943 (Cal. 2003) ("Recovery on a [healthcare] provider lien [against a settlement between a Medicaid-eligible patient and a tortfeasor] therefore beneficiary and not from purposes of federal law."). comes the third from party the [Medicaid] tortfeasor for In addition, of course, the only reason the hospital has a lien in the first place is because it provided medical services to the patient (not some other entity) and because the patient (not some other entity) therefore owes 9 It should be observed that the liens represent an effort to "collect from" the Gisters only in the sense that they do not target any other entity (such as a tortfeasor or his insurer), not in the sense that they go directly to the patients themselves, rather than to a settlement. See note 15 infra. 13 No. it a debt. regard the See ¶52 infra. lien as 2009AP2795 It therefore makes no sense to "collecting" from anyone other than the patient, and the federal rule is consequently implicated. ¶19 question Having of answered whether St. in the affirmative Joseph's liens were the an threshold effort "to collect from" the Gisters, and thus subject to the federal rule, we are now required to determine whether or not the rule bars the liens. To reach that determination, it is instructive to consider federal cases dealing with similar issues. ¶20 Several federal courts of appeals have issued published decisions concerning liens similar to St. Joseph's. Miller, 547 F.3d 273; Spectrum, 410 F.3d 304; Evanston Hosp. v. Hauck, 1 F.3d 540, 543-44 (7th Cir. 1993). In each of those cases, the courts upheld the validity of the liens in question. Miller is the most factually similar case, and therefore offers the most helpful guidance here. ¶21 In Miller, Jose Alfaro ("Alfaro"), an individual who later became eligible for Medicaid, was injured when his car and a truck collided in Louisiana. 547 F.3d at 276. care Medical Center While hospitalized, he truck company at Baton General"). lawsuit Rouge Id. against the General injuries he sustained in the crash. seeking Id. He received ("Baton filed a damages Rouge federal for the Baton Rouge General then filed a lien pursuant to Louisiana state law to recover its medical expenses from any future settlement or judgment Alfaro received from the truck company. intervened in Alfaro's lawsuit, 14 Id. Baton Rouge General later which was resolved through No. settlement. Id. 2009AP2795 At that point, Baton Rouge General filed a motion for partial summary judgment to recover the expenses it incurred in treating Alfaro. that motion. ¶22 Id. A magistrate judge granted Id. at 277. On appeal, the Fifth Circuit affirmed. Id. at 276. The court began with the proposition that federal law "requires that each state's Medicaid agency take measures to find out when third parties . . . are covered by legally Medicaid." Id. obliged at to 278. pay for Miller services observed that Louisiana incorporated this federal mandate into its state code by requiring the state Medicaid agency to seek out and collect money from third eligible patients. ¶23 parties liable for injuries to Medicaid- Id. at 279. Turning to the validity of Alfaro's liens, the Fifth Circuit took up Alfaro's argument that "a health care provider cannot seek to collect payments from that patient if a third party is liable for the patient's medical expenses." 282. The uniformly court rejected indicates reimbursement are this that argument the because limitations triggered . . . when a Id. at "[c]ase on provider law provider elects to bill[,] and accepts payment from[,] Medicaid for the services it provides to the patient." ¶24 that 42 Id. (citations omitted). Elaborating on its reasoning, the Fifth Circuit noted U.S.C. § 1396a(25)(C) was designed to practices of "balance" and "substitute" billing. "Balance billing" occurs when a hospital proscribe the Id. at 282-83. bills Medicaid, receives reimbursement for less than the requested amount, and 15 No. 2009AP2795 then seeks to recover from the patient the difference between the medical Medicaid. expenses charged Id. at 282-83. and the reimbursement from "Substitute billing" takes place when a hospital bills Medicaid, is dissatisfied with the size of the reimbursement, and therefore tries to return the payment in order to charge the patient a larger amount than it received from the government. Id. at 283. As such, the Fifth Circuit held in Miller, the prohibition in § 1396a(25)(C) is triggered only when a hospital submits a bill to Medicaid. Id. ("Logically, a provider cannot attempt to engage in 'balance billing' or 'substitute billing' unless it has initially billed Medicaid"); see also Spectrum, 410 F.3d at 315 ("Having chosen to accept payment from Medicaid however, Spectrum abandoned all rights to further recovery of its customary fee from the lien.") (emphasis added); cf. Evanston Hospital, 1 F.3d at 543-44.10 ¶25 As required by federal law, Wisconsin incorporated a parallel provision to 42 U.S.C. § 1396a(25)(C) in its Medicaid plan. That provision states that "[n]o [hospital] may knowingly impose upon a [Medicaid-eligible patient] charges in addition to payments received for services 10 under ss. 49.45 to It is equally well established that states are permitted under federal law to require hospitals to pursue expenses from liable third parties before billing Medicaid. See Miller v. Gorski Wladyslaw Estate, 547 F.3d 273, 280 n.6 (5th Cir. 2008) (collecting cases). Although Wisconsin permits that practice (in the form of allowing hospitals to join personal injury lawsuits), rather than requiring it, see Wis. Admin. Code § DHS 106.03(8), such case law nevertheless indicates that Wisconsin's system is in conformity with federal law in this regard. 16 No. 2009AP2795 49.47111 . . . except under" several limited exceptions.12 Stat. § 49.49(3m)(a). Wis. In accordance with the federal appellate decisions cited above, this provision comes into play only when a hospital hospital bills cannot Medicaid. impose Indeed, charges "in by its plain addition terms, to" a receiving payments from Medicaid if it never receives any payments from Medicaid. No one alleges that St. Joseph's received payments from Medicaid for the expenses sought in the challenged liens. Accordingly, we hold that the "in addition to" provision of § 49.49(3m)(a), a codification of federal law whose purpose is illuminated by federal Joseph's liens. judicial opinions, does not bar St. As a result, St. Joseph's liens are fully in compliance with 42 U.S.C. § 1396a(25)(C). 3. State Law does not Bar St. Joseph s Liens ¶26 If Wisconsin law incorporated only what 42 U.S.C. § 1396a(25)(C) demanded, our analysis could end with Miller and the other above. well-reasoned federal However, Wisconsin mandated by federal law. law appellate goes decisions beyond the discussed requirements For unlike § 1396a(25)(C), Wis. Stat. § 49.49(3m)(a) contains a third party liability provision that does come into play, by its plain terms, even where the hospital never bills Medicaid. 11 The referenced sections comprise a portion of the Wisconsin statutes dealing with medical assistance. The Gisters were treated by St. Joseph's under provisions within this section. 12 The exceptions are not relevant to the facts of this case. 17 No. ¶27 There are § 49.49(3m)(a). two prohibitions in 2009AP2795 Wis. Stat. The first, discussed above, prohibits hospitals from "knowingly impos[ing] upon a [Medicaid-eligible patient] charges in addition to payments received" from Medicaid. second prohibits charges upon a Medicaid. hospitals [patient] from in "knowingly lieu of impos[ing] obtaining The direct payment" from Just as a hospital can impose charges "in addition" to billing Medicaid only when it, at some point, bills Medicaid, a hospital can impose charges "in lieu" of billing Medicaid only if it does not bill Medicaid. See Shorter Oxford English Dictionary 1014 (6th ed. 2007) (defining "in lieu of" as "[i]n place of; instead of"). That is, a hospital cannot impose charges instead of billing Medicaid if it submits a bill to Medicaid. unlike Stated 42 U.S.C. differently, § 1396a(25)(C) the and "in lieu its of" provision, Wisconsin analogue (i.e., the "in addition to" provision), speaks to a circumstance in which the hospital elects not to submit a bill to Medicaid. ¶28 Thus, Wisconsin's prohibition on directly billing Medicaid-eligible patients "in lieu of" accepting payments from Medicaid imposes an additional requirement not mandated by federal law, and one which therefore must be analyzed under a 18 No. 2009AP2795 separate rubric from that provided by the federal case law.13 Miller, 547 F.3d at 284 ("[I]t is clear that the limitations on a health care provider's ability to obtain reimbursement for the services triggered it provides until a a Medicaid-eligible provider bills and patient accepts are payment not from Medicaid for those services."); see also Spectrum, 410 F.3d at 315 (same); Evanston Hosp., 1 F.3d at 543-44 (same). Consequently, these federal cases deal with distinct provisions, and therefore Furthermore, Medicaid for do not because the entirely St. medical resolve Joseph's expenses never the matter submitted sought in the at a hand. bill to challenged liens, we must consider the "in lieu of" provision in this case. ¶29 Under a plain language analysis, we conclude that St. Joseph's liens do not violate the "in lieu of" provision of Wis. Stat. § 49.49(3m)(a). 13 It is important to note that the following analysis does not disturb our prior holding that Wisconsin is in compliance with federal law. Because federal law imposes restrictions only once Medicaid is billed, and because St. Joseph's never billed Medicaid for the expenses sought in the challenged liens, its actions were fully consistent with federal law, and Wis. Stat. § 49.49(3m)(a) completely satisfies Wisconsin Medicaid's obligations to the federal government. 19 No. ¶30 We begin with the "common, meaning" of the disputed words.14 The plain language of the ordinary, 2009AP2795 and accepted Kalal, 271 Wis. 2d 633, ¶45. second prohibition in Wis. Stat. § 49.49(3m)(a) includes two requirements: that the charges be "direct" and that they be imposed "in lieu of" charges paid by Medicaid. American Heritage Dictionary defines "direct," in the most relevant definition, as "proceeding without interruption in a straight course or line; not deviating or swerving." The American Heritage Dictionary of the English Language 527 (3d ed. 1992). Applying this definition to § 49.49(3m)(a), the provision should be construed to prohibit charges that "proceed in a straight course or line, without deviating or swerving," to the patient. ¶31 Contrary to the Gisters' argument, an examination of the language of the hospital lien statute demonstrates that the liens filed by St. Joseph's did 14 not constitute the "direct Rather than considering the plain language of the statutory provisions at issue in the case, the dissent conducts its analysis by asking what the law "authorizes," and then looking for the answer to that question by consulting only the statutes and regulations relating to Medicaid while ignoring the hospital lien statute. Dissent, ¶78 ("The law governing Wisconsin's Medicaid program does not authorize any third option."); ¶82 ("The option embraced by the majority is not authorized by the law governing Wisconsin's Medicaid program."). We do not understand this approach. There is no ambiguity as to the "authorization" in the law for St. Joseph's liens: it is the hospital lien statute. The question is whether some other authority prohibits the liens. It is unsurprising that the dissent finds no "authorization" for the liens when it searches everywhere for such authorization except the statute that declares the authorization by its very title. 20 No. charges" proscribed by Wis. Stat. § 49.49(3m)(a). 2009AP2795 Liens filed pursuant to the hospital lien statute "attach to any and all rights of action, suits, claims, demands, and upon any judgment, award or determination and upon the proceeds of any settlement." § 779.80. under In other words, the hospital lien statute allows, certain various actions circumstances, undertaken claims, demands, etc.). by for the a direct patient recourse (i.e., to the the suits, At the same time, it must be emphasized that the hospital lien statute does not permit a direct recourse to the patient himself. 718 N.E.2d 1221, Cf. Cullimore v. St. Anthony Med. Ctr., 1224 (Ind. Ct. App. 1999) (noting that Indiana's hospital lien statute gives a hospital "a direct right in the insurance proceeds and other settlement funds which are paid to the patient by the person claimed to be liable for the patient's injuries . . . .") (emphasis added).15 15 In this regard, In the interest of clarity, it is helpful to briefly address the distinction between the proposition expressed in this section that St. Joseph's liens do not constitute a "direct charge" against the Gisters because they attach to the settlement, not the Gisters themselves and the proposition expressed in ¶18 supra that St. Joseph's liens constitute an effort by St. Joseph to "collect from" the Gisters. The question presented in the "collect from" context, discussed in ¶18, is whether St. Joseph's liens were directed at any other party. See Olszewski, 69 P.3d at 943 ("Recovery on a [healthcare] provider lien [against a settlement between a Medicaid-eligible patient and a tortfeasor] therefore comes from the [Medicaid] beneficiary and not from the third party tortfeasor for purposes of federal law.") (emphasis added). That issue is merely a federal threshold question as to whether 42 U.S.C. § 1396a(25)(C) applies to the liens. Because it is well-settled as a matter of federal law that a lien filed against a settlement between a tortfeasor and a patient is an effort to "collect from" the patient, id.; Spectrum Health Continuing Care Grp. v. Anna Marie Bowling Irrevocable Trust, 21 No. 2009AP2795 St. Joseph s liens can be analogized to an in rem action, which "is directed against against . . . property the world with subject of the action." Glass, 2001 WI 61, respect to and seeks a the property judgment that is as the In re Return of Property in State v. ¶16, 243 Wis. 2d 636, 628 N.W.2d 343 (footnote omitted) (emphasis added); see also Jayko v. Fraczek, 966 N.E.2d 1121, ¶23 (Ill. Ct. App. 2012) (holding that a health care provider s lien on a personal injury action settlement was an in rem proceeding).16 ¶32 context Our of (reminding analysis). conclusion the that is substantially prohibition. statutory Kalal, context bolstered shapes a the Wis. 2d 633, 271 by ¶46 plain language Wisconsin Stat. § 49.49(3m)(a) provides that "[n]o 410 F.3d 304, 318 (6th Cir. 2005), we have concluded that St. Joseph's liens were an effort to "collect from" the Gisters. However, because the prohibition in § 1396a(25)(C) is triggered only when Medicaid is billed, and because St. Joseph's never billed Medicaid for the expenses sought in the challenged liens, we have also concluded that St. Joseph's liens did not violate federal law. By contrast, the question addressed in this section is whether the liens filed by St. Joseph's constitute a "direct charge" upon the patient. That question is purely a matter of state law with no bearing on the federal question discussed above. Our analysis of that question focuses on the fact that St. Joseph's liens were directed at a potential settlement, not at the Gisters themselves, and thus did not constitute a "direct charge" imposed upon the Gisters. 16 In their initial complaint, the Gisters did not argue that St. Joseph's liens constituted "direct charges," they argued that the liens "have the same effect" as such charges. Thus, even under the Gisters own original argument, St. Joseph's liens were consistent with the plain language of Wis. Stat. § 49.49(3m)(a). 22 No. provider may knowingly impose upon a recipient 2009AP2795 charges in addition to payments received for services under [Medicaid] or knowingly impose obtaining direct payment charges upon under a recipient [Medicaid] . . . ." in lieu (emphasis of added). The first clauses of each of the two prohibitions in Wis. Stat. § 49.49(3m)(a) are strikingly hospitals from "knowingly eligible patients under similar in imposing certain form: charges both upon" circumstances. preclude Medicaid- Notably, the legislature made a point of inserting the word "direct" into the second clause, in contrast to the first. ¶33 Where the legislature includes a word in one provision and omits it from a similar, parallel provision within the same statute, we are even more reluctant to diminish the independent significance of the word. Cf. Graziano v. Town of Long Lake, 191 Wis. 2d 812, 822, 530 N.W.2d 55 (Ct. App. 1995) ("[W]here the legislature uses similar but different terms in a statute, particularly within the same section, we may presume it intended the terms to have different meanings.") (citing Armes v. Kenosha Cnty., 81 Wis. 2d 309, 318, 260 N.W.2d 515 (1977)). ¶34 charges" It is look not like. difficult See to generally Wis. 2d 700, 707-08, 211 N.W.2d 480 registration fee not a was understand direct State (1973) what v. Jackman, (holding charge). "direct In the that 60 a medical context, a hospital directly charges a patient when it sends a bill to the patient. F.2d 1390, 1392 (5th See, e.g., Humana, Inc. v. Jacobson, 804 Cir. 1986) (discussing a doctor who threatened to "send bills directly to Medicare patients," rather 23 No. than billing Medicare). 2009AP2795 The Hospital did not to do so here, but rather filed liens against the Gisters' potential settlements with American Family. Joseph's liens Gisters, and plain did not that language Accordingly, constitute they of were the we that St. charges upon" the permissible under the "direct therefore second conclude prohibition in Wis. Stat. § 49.49(3m)(a). 4. Reading Wis. Stat. § 49.49(3m)(a) to Permit St. Joseph's Liens Best Harmonizes the Provision with Wis. Admin. Code § DHS 106.03(8) ¶35 Our duty, if possible, is to harmonize § 49.49(3m)(a) with other relevant regulations. Wis. Stat. DaimlerChrysler v. LIRC, 2007 WI 15, ¶10, 299 Wis. 2d 1, 727 N.W.2d 311 ("When an administrative agency promulgates regulations pursuant to a power delegated by the legislature, we construe those regulations together with the statute to make, if possible, an effectual piece of legislation in harmony with common sense and sound reason.") (internal quotation marks and citation omitted). ¶36 relevant The parties regulation 106.03(8)(allowing contend, here hospitals is to 24 and we Wis. either agree, Admin. bill that the Code Medicaid most § DHS or join No. 2009AP2795 personal injury lawsuits when liability may be contested).17 We conclude as that our reading of Wis. Stat. § 49.49(3m)(a) permitting the liens is the interpretation most consistent with Wis. Admin. Code. § DHS 106.03(8). ¶37 hospitals Wisconsin to either Admin. Code § DHS bill Medicaid or 106.03(8) join lawsuits when liability may be contested. personal permits injury The Gisters argue that St. Joseph's liens imposed a direct charge upon them, in violation of Wis. Stat. § 49.49(3m)(a). If they are right, and if Wis. Admin. Code § DHS 106.03(8) is valid, a perverse result follows. This is so because, under the Gisters' interpretation of the regulatory scheme, St. Joseph's imposes an impermissible "direct charge" on them in violation of § 49.49(3m)(a) when it files liens against their potential settlements with American Family before any personal injury lawsuit is filed, but somehow does not run afoul of § 49.49(3m)(a) lawsuit after it is filed. interpretation. when it joins in the We cannot subscribe to the Gisters' Regardless of whether St. Joseph's files a lien against a future settlement or joins in a lawsuit, the money being sought originates from the same source (American Family), goes to the same recipients (the Gisters and St. Joseph's), and 17 The parties debate the relevance of several other statutes and regulations. Most extensively, they discuss Wis. Stat. § 49.46(2)(d), which prohibits state Medicaid agencies from authorizing payments for medical costs "payable through 3rd-party liability." Our decision does not require us to construe this provision, nor do we find anything in our opinion that conflicts with its prohibition. Accordingly, we do not address it. 25 No. is designated for the same purpose (to satisfy 2009AP2795 the medical expenses incurred by the Gisters after the accident). We see no rationale a as to why St. Joseph's action would charge" in one circumstance and not the other.18 be "direct In short, it is permissible for St. Joseph's to pursue the funds by joining the lawsuit, and it is therefore permissible for St. Joseph's to 18 The dissent characterizes our opinion as relying "on the premise that there is no difference between joining a lawsuit and imposing a lien on the money recovered from that lawsuit." Dissent, ¶83. As an initial matter, our decision does not rely on a comparison of the two actions (joining a lawsuit and imposing a lien on a settlement), it simply cites the former as support for our conclusion that the liens are permissible. This conclusion stands independently, as we show, on a plain language analysis of Wis. Stat. § 49.49(3m)(a). By contrast, the dissent appears to rely on administrative regulations as defining the parameters of St. Joseph's legal options, whereas our primary focus remains on statutes (both the hospital lien statute and § 49.49(3m)(a)). Because a regulation is invalid if it contravenes a statute, see, e.g., Seider v. O'Connell, 2000 WI 76, ¶26, 236 Wis. 2d 211, 612 N.W.2d 659, we believe it is more appropriate to consider first the relevant statutes and then the relevant regulations. Finally, we do not suggest that there is "no difference" between joining a lawsuit and imposing a lien on a settlement; rather, we merely point out that it would make little sense to permit one while prohibiting the other. 26 No. 2009AP2795 pursue the funds through liens.19 Consequently, harmonizing Wis. Stat. Admin. § 49.49(3m)(a) with Wis. Code § DHS 106.03(8) compels us to conclude that St. Joseph's liens were valid.20 ¶38 does not In summary, bar St. we hold Joseph's that liens Wis. Stat. because the § 49.49(3m)(a) liens do not constitute "direct charges upon" the Gisters and because this 19 At the circuit court, the Gisters argued that Wis. Admin. Code § DHS 106.03(8) was invalid because it conflicted with Wis. Stat. § 49.49(3m)(a). They do not urge that argument here, so we consider it abandoned and need not address it. See State v. Young, 2009 WI App 22, ¶15 n.6, 316 Wis. 2d 114, 762 N.W.2d 736 (declining to address an argument raised at the circuit court and abandoned on appeal). We do note that in light of our conclusion that St. Joseph's liens were not violative of § 49.49(3m)(a), that statute and Wis. Admin. Code § DHS 106.03(8) can be naturally and reasonably harmonized, and any suggestion that the two are in irreconcilable conflict is therefore meritless. See Law Enforcement Standards Bd. v. Vill. of Lyndon Station, 101 Wis. 2d 472, 489, 305 N.W.2d 89 (1981) ("An administrative rule should ordinarily be given that construction which will, if possible, sustain its validity.") (internal quotation marks and citation omitted). 20 Because it is not necessary to do so in order to resolve this matter, we do not reach St. Joseph's contention that, when it filed its liens, it constructively joined a personal injury lawsuit initiated by the Gisters against American Family. 27 No. result best comports with the related regulations.21 2009AP2795 We turn now to the Gisters' other submitted authority for voiding the liens: the court of appeals' decision in Dorr. B. Dorr Does not Bar St. Joseph's Liens ¶39 from We conclude that Dorr does not prevent St. Joseph's filing the distinguishable involved liens. from patients the Dorr case protected under by immunity as the result of an HMO. does not control this case. is legally and consideration contractual and factually because it statutory Consequently, the decision Moreover, we limit Dorr to its facts and expressly reject any interpretation of the decision that finds in it broadly applicable principles of law regarding hospital liens. 1. Dorr is Factually and Legally Distinguishable From this Case 21 The dissent disagrees with our holding that the liens do not constitute "direct charges" imposed on the Gisters for purposes of state law on the grounds that we also acknowledge that the liens are an attempt to "collect from" the Gisters under federal law. Dissent, ¶¶73-74. In the dissent's view, the distinction is problematic because it may allow hospitals to seek other property from Medicaid-eligible patients. Id., ¶74 ("[W]hat other property belonging to a Medicaid recipient could the hospital seek?"). However, as we have noted, the hospital lien statute, the sole authority for St. Joseph's liens, carefully limits the types of property that can be sought in such circumstances. See Wis. Stat. § 779.80(2) (making clear that hospital liens attach only "to any and all rights of actions, suits, claims, demands and upon any judgment, award or determination and upon the proceeds of any settlement which such injured person, or legal representative might have against any such person for damages on account of such injuries . . . ."). 28 No. ¶40 We conclude that Dorr is factually 2009AP2795 and legally distinct from the case before us, and therefore does not dictate its result. To explain why Dorr is distinguishable, we begin with an overview of its facts. ¶41 car In Dorr, an individual ("Mrs. Dorr") was injured in a crash ("Sacred and received Heart"). 228 treatment Wis. 2d at at Sacred 432. Heart Mrs. Hospital Dorr and her husband ("the Dorrs") had medical insurance coverage through an HMO, which had a contract with Sacred Heart. Id. at 430. Under the terms of the contract, Sacred Heart was required to provide medical services to Mrs. Dorr at an agreed-upon rate. Id. contract by which the HMO's Sacred also Heart contained agreed not a to "hold bill, harmless" or hold clause, liable, subscribers for expenses covered by the contract. The Id. at 433. In addition, Sacred Heart bound itself in the "hold harmless" provision to accept the statutory immunities conferred by Wis. Stat. § 609.9122 ("HMO immunity statute") upon any of the HMO's subscribers and not claim any statutory exemptions from those immunities. Id. Rather than billing the HMO, Sacred Heart filed a lien on the insurance proceeds that the Dorrs would later collect. Id. 22 Wis. Stat. § 609.91 (1998-99) provided, in pertinent part, that, with limited exceptions that were not relevant in Dorr v. Sacred Heart Hosp., 228 Wis. 2d 425, 597 N.W.2d 462 (Ct. App. 1999) or here, a "policyholder of a[n] [HMO] insurer is not liable for health care costs that are . . . covered under a policy . . . issued by the [HMO]." 29 No. ¶42 2009AP2795 In Dorr, the court of appeals began its analysis by examining whether the hospital lien statute "permits the filing of a lien without an underlying debt," as the court understood Sacred Heart to be arguing. Id. Relying upon Black's and prior precedent, the court concluded in Dorr that the hospital lien statute "requires the existence of an obligation due the lienholder from the person [to] whose property . . . the lien attaches." for its 228 Wis. 2d at 438. ruling in statute, which the statute "not the plain court only The Dorr court found support language read to contemplates of the confirm its the hospital view existence lien that a of the debt underlying the lien but also that the debt's obligor is the injured person hospital." ¶43 who received the medical services from the Id. at 439. Having established to its satisfaction that a hospital lien requires a debt owed by the patient to the hospital, the court of appeals in Dorr next considered how the principle applied to the interaction between the hospital lien statute, the HMO immunity statute, and the HMO's contract with Sacred Heart. The court determined that both the HMO immunity statute and the contract "negate[d] the existence of a debt the Dorrs owe" Sacred impermissible. Heart, Id. and at that 442. the lien Dismissing was therefore Sacred Heart's contention that it sought recourse against the tortfeasor (who was not protected by either contractual or statutory immunity) rather than the Dorrs (who were), the court of appeals concluded that the lien statute did not 30 afford any recourse against No. tortfeasors. Id. In light of its the analysis, 2009AP2795 court of appeals held that "when [the HMO] immunity provisions apply or when a contract between an HMO and hospital contains a hold harmless provision, no hospital lien can be filed against an HMO patient's property because the HMO patient is not indebted to the hospital for the medical services provided." ¶44 Id. at 435. As is apparent from the foregoing description of Dorr, the only question before the court of appeals in that case was whether Sacred Heart's liens were valid. In concluding that they were not, the court of appeals relied on the fact that the Dorrs were protected by statutory and contractual immunity as a result of recitation their of its HMO. Indeed, holding the court demonstrates of that appeals' the court own was careful not to establish precedent that would be reflexively extended to distinct fact patterns. See Dorr, 228 Wis. 2d at 435 ("We conclude that when [the HMO] immunity provisions apply or when a contract between an HMO and hospital contains a hold harmless provision, no hospital lien can be filed.") (emphasis added). ¶45 The Gisters did not subscribe to an HMO, and they therefore have no claim to the types of immunity discussed in 31 No. Dorr.23 2009AP2795 Accordingly, we conclude that Dorr does not control this case. 2. The Gisters are not Analogous to the Dorrs ¶46 The court of appeals below regarded Medicaid-eligible patients such as the Gisters as "closely analogous to the HMO patient in Dorr." Gister, No. 2009AP2795, ¶14. It reasoned that, "[i]n both cases, the hospital is forbidden from billing the patient, and thus the patient does not owe it a debt. And, in both cases, the hospital can normally obtain payment from a source other [Medicaid]." than Id. the patient, either from the HMO or We disagree with the court of appeals and conclude that the analogy is inapt for two reasons. ¶47 First, the court of appeals omitted a crucial word from the first sentence of its analogy. "forbidden directly from billing billing the the St. Joseph's is not patient," patient (or, it is more "impos[ing] direct charges upon" the patient). § 49.49(3m)(a). prohibition on It direct stands to charges reason, does not forbidden precisely, from from See Wis. Stat. therefore, that automatically the signify that the patient owes no debt to St. Joseph's. 23 The dissent states that Dorr "squarely addresses the issue at hand in this case." Dissent, ¶77. However, the court of appeals in Dorr expressed its holding with explicit reference to factual circumstances that are not present here: statutory and contractual immunity as the result of an HMO. See Dorr, 228 Wis. 2d at 435 ("We conclude that when [the HMO] immunity provisions apply or when a contract between an HMO and hospital contains a hold harmless provision, no hospital lien can be filed.") (emphasis added). 32 No. ¶48 sentence 2009AP2795 In addition to omitting a pivotal word from the first of the analogy, the court inaccurate word into the second. of appeals inserted an In both Dorr and this case, the court reasoned, "the hospital can normally obtain payment from a source other than the patient, either from the HMO or [Medicaid]." Gister, No. 2009AP2795, ¶14 (emphasis added). It is true that a hospital in the same position as St. Joseph's can "normally obtain payment from a source other than the patient," namely, Medicaid. But a hospital in the same circumstances as Sacred Heart faces a much different set of options. For such a hospital, obtaining payment from a source other than the patient is not the "normal" course of action; it is the only option. That is, Sacred Heart was required by the plain terms of its contract with the HMO and by the plain terms of the HMO immunity statute to collect its charges from the HMO. Dorr, 228 Wis. 2d at 433-34. ¶49 By contrast, in the absence of such immunities, Wis. Admin. Code § DHS 106.03(8) affords hospitals, at least in some situations, the option of billing patient's personal injury claim. Medicaid or joining a It is thus a very different thing to hold, as a matter of law, that a patient will never owe a debt to a treating hospital when there are two separate and independent grounds, i.e., contractual and statutory immunity, barring the hospital from ever billing (directly or indirectly) the patient, as it is to hold the same when the hospital is not so constricted in how it pursues the payment. reasons, we conclude that Dorr 33 is For the foregoing factually and legally No. 2009AP2795 distinguishable, and that the patients there are not properly analogized to the Gisters. 3. The Court of Appeals' Broad Reading of Dorr is Incorrect ¶50 that We acknowledge that Dorr contains some broad language militates against the position we take today. It is understandable that the court of appeals in this case regarded that language as barring St. Joseph's liens. We therefore pause to clarify the teaching of Dorr, and conclude that the broadest interpretation of its general language regarding hospital liens and settlements should have no precedential weight going forward. ¶51 Dorr's analysis began with the proposition that a lien "presupposes That the proposition Boorman v. existence is of Wisconsin debt." rooted deeply a in Rotary Engine (1874), and widely accepted. (2011). 228 our Co., 36 Wis. 2d at 437. jurisprudence, Wis. 207, see 212-13 See 51 Am. Jur. 2d Liens § 13 Our reservations are with how the court of appeals in Dorr applied the proposition to the facts of that case. ¶52 The "[l]iability first on a definition claim; agreement or otherwise." 1999). a Black's specific offers sum of for "debt" money due is by Black's Law Dictionary 410 (7th ed. As soon as Sacred Heart began to treat Mrs. Dorr for her injuries (and as soon as St. Joseph's began to treat the Gisters for theirs) such a debt came into being, as "a specific sum of money became due" by virtue of the medical services rendered. Cf. Alaska Native Tribal Health Consortium v. Ridley, 84 P.3d 418, 425 (Alaska 2004)(holding that a healthcare provider could 34 No. enforce a lien on settlement proceeds between a 2009AP2795 patient and third-party tortfeasors even when the patient was not personally indebted to the provider because the patient was entitled to free medical care). The maxim that services rendered gives rise to a debt is as old and universal as the maxim that a lien presupposes a debt. 26, 31-32, 97 See, e.g., In re Sheldon's Estate, 120 Wis. N.W. 524 (1903) (recognizing that an implied contract ordinarily arises for the reasonable value of services rendered). As a general matter, the rule applies with equal force in the medical context. See, e.g., Fischer v. Fischer, 31 Wis. 2d 293, 309-10, 142 N.W.2d 857 (1966) (discussing implied contracts arising between patients and physicians), overruled on other grounds by Matter of Stromsted's Estate, 99 Wis. 2d 136, 299 N.W.2d 226 (1980); see also 40A Am. Jur. 2d Payment for Services providers Provided and relationship. by their Hospital, patients § 8 stand (2011) in a ("Health care creditor-debtor Indeed, a hospital ordinarily is entitled to be compensated for its services, by either an express or an implied contract, and if no contract exists, there is generally an implied agreement that the patient will pay the reasonable value of the services rendered."). ¶53 We recognize that these two principles that a lien presupposes a debt and that medical services rendered gives rise to a debt rest together uneasily in the context of hospital liens filed on settlements between patients and tortfeasors or insurers covering their liability, where there is often an entity (whether it be a public medical assistance agency or an 35 No. 2009AP2795 HMO) that may be ultimately responsible for paying the bill. Courts have wrestled with the resulting tension in a variety of different ways. See generally 16 A.L.R. 5th 262, § 56[a], Effect of Extinguishment of Lien On patient's underlying debt (collecting cases). It is a large and divergent body of law, dealing with many distinctive statutory and contractual issues, and we do not think it necessary or possible to synthesize it into a single, coherent whole. ¶54 We do, however, find it useful to glean from the cases the following proposition. Whenever there is any uncertainty or ambiguity in the law as to who will ultimately pay a hospital bill, or as to the extent to which a hospital is prohibited from billing a patient, it does not make sense to regard a debt on the part of a patient owed to a hospital as foreclosed by law for purposes of a hospital lien. from the fact that courts One can infer that proposition have disallowed liens in such circumstances only when there is no doubt that someone other than the patient is responsible for satisfying the debt. generally, e.g., Dorr, 228 Wis. 2d at 435 (finding no See debt because of contractual and statutory immunity); MCG Health, Inc. v. Owners Ins. Co., 707 S.E.2d 349, 352-53 (Ga. 2011) (finding that a medical regulations gave college the could federal not enforce government the a lien sole because right to collect payment for medical care); Satsky v. United States, 993 F. Supp. 1027, 1029 (S.D. Tex. 1998) (finding no debt because the insurer already paid the bill in full); Parnell v. Adventist Health System/West, 109 P.3d 69, 79 (Cal. 2005) (same). 36 The No. 2009AP2795 principle is sensible, as it would be illogical to consider a debt legally impossible for purposes of a lien when impossibility is not grounded in a legal certainty. this general principle to the case at bar, we that Applying hold that a patient's debt to a hospital is extinguished for purposes of a hospital lien placed upon a settlement between a patient and an insurer covering a tortfeasor's liability, if it ever is, only when the following can be accurately said: that the hospital is legally barred from ever billing the patient, either directly or indirectly. ¶55 Our conclusion draws support from this court's holdings in related contexts. In Noer v. G.W. Jones Lumber Co., 170 (1920), Wis. 419, 175 N.W. 784 a physician brought a Workmen's Compensation Act ("the Act") claim against an employer for the value of medical services rendered to an employee whose injuries concluded the employer that the was Act liable (as for under interpreted by the Act. We the Industrial Commission) prescribed the amount of money that the employer owed the employee for his injuries, but not the amount of money that the courts. physician could seek from Noer, circumstances," we 170 Wis. 2d at reasoned, "the the employee 422-23. reasonable through "Under value of the such the services, as determined by the Industrial Commission, measures the amount which the employer must pay to the [employee] for this item of compensation, but the physician rendering the services is in no manner bound by such determination when he proceeds to collect from the [employee]. 37 His remedy in the No. courts is left unimpaired, and he may maintain 2009AP2795 his action therein for the value of his services as he conceives them to be." Id. at 423. ¶56 Eighteen years later, we reviewed another workmen's compensation case, this time arising from a conflict between the Act and an insurance policy indemnifying the worker's injuries. St. Mary's Hosp. Misericordia v. & Training Atlas Sch. for Warehouse Wis. 568, 277 N.W. 144 (1938). & Nurses Cold of Sisters of Co., 226 Storage We remarked that "[l]iability does not depend upon to whom credit was extended, but upon who in law was employee responsible himself was defendant was also Workmen's Compensation for the doubtless responsible payment of responsible for Law . . . made its it the for payment, bill. The payment; the because the responsible; and the surety company was also responsible for its payment because of its policy of indemnity to the defendant." St. Mary's Hosp., 226 Wis. at 571. ¶57 We take from these decisions the lesson that a debt for medical treatment from a patient to another party should not be rigidly considered extinguished simply because the law may ultimately direct the bill to a different party. Applying that lesson to the instant case, we conclude that St. Joseph's liens should not have been invalidated on the exclusive ground that Medicaid may have ultimately paid for the charges. ¶58 The utility of our rule circumstances of the present case. is underscored by the If the Gisters had initiated a personal injury lawsuit, St. Joseph's could have joined the 38 No. action under Wis. Admin. Code § DHS 106.03(8). 2009AP2795 Because that possibility was still open at the time St. Joseph's liens were filed, it would be irrational to hold, as a matter of law, that St. Joseph's had an insufficiently definite interest in the funds that American Family might later provide pursuant to a settlement. ¶59 By relying on a broad and rigid interpretation of Dorr, the court of appeals side-stepped an analysis of where the debt legally belongs. St. Joseph's to Instead, the court of appeals required present a specific, affirmative grant authority to justify the creation of an exception to Dorr. cannot sustain such a construction. of Dorr To the extent that Dorr reached any conclusions regarding the permissibility of hospital liens generally, they flow entirely from the court of appeals' determination that the patient in that case owed no debt to Sacred Heart. Such a holding says nothing about whether the Gisters owed a debt to St. Joseph's. It does violence to Dorr's holding to regard it, as the court of appeals here did, as always and everywhere imposing a burden on hospitals to justify with specific grants of authority (outside the hospital lien statute) the liens they file against settlements between patients and tortfeasors or insurers covering their liability. ¶60 When a court hospital lien against is a presented settlement with between a challenge to a patient and a a third-party tortfeasor and their insurer, it should ask whether the applicable statutory and regulatory framework lien in light of the specific facts of the case. 39 permit the Part of that No. 2009AP2795 analysis will be an examination of whether the possibility of the patient ever owing a debt to the hospital is legally foreclosed in such a way as to render the lien invalid. We have conducted that analysis here, and we conclude that St. Joseph's liens are permissible.24 VI. ¶61 CONCLUSION We are asked to decide whether a charitable hospital may pursue payment for medical care provided to a Medicaid- eligible patient by filing a lien against a settlement between the patient and an insurance company covering the liability of a tortfeasor responsible for the patient's injuries. To answer the question, we have harmonized the complex state and federal legal framework statute. surrounding Medicaid with the hospital lien We conclude that the soundest harmonization of the two permits St. Joseph's liens, and we therefore reverse the court of appeals. By the Court. The decision of the court of appeals is reversed. 24 We reiterate that the holding of Dorr, properly understood, is not overruled by this opinion. The question presented in Dorr was whether a hospital could file a lien against a settlement between a patient and a tortfeasor when the patient is protected by statutory and contractual immunity as a result of a contract between her HMO and the treating hospital. We do not deal with such immunities in this case, and we therefore do not have occasion to revisit the court of appeals' determination that the lien in Dorr was unenforceable. We simply limit Dorr to its facts. To the extent the broader language in Dorr could be read to conflict with our decision here, we disapprove such an interpretation. 40 No. ¶62 ANN WALSH BRADLEY, J. (dissenting). 2009AP2795.awb Although the legal framework governing Medicaid is complex, the issues in this case are straightforward. Wisconsin's Medicaid program circumscribes the options available to service providers like St. Joseph's Hospital. Under Wisconsin's Medicaid program, the Gisters are not liable for the cost of their care. To recoup these can costs, the hospital has two options. It bill Medicaid, or it can attempt to recover its charges by joining the Gisters' personal injury lawsuit. ¶63 Unfortunately, the majority does careful examination of the relevant law. not undertake a Instead, it embraces a third option, unavailable under the law governing Wisconsin's Medicaid program, which underlying the program. outcome of this case. violates the important principles These principles should control the Because I conclude that the Gisters are entitled to a declaration that the hospital's liens are invalid, I respectfully dissent. I ¶64 difficult hospital Although to is the follow, it permitted to majority's discussion arrives at impose liens settlement with the tortfeasor. the on is conclusion the at times that the Gisters' money On the one hand, for purposes of federal law, it acknowledges that the hospital's liens are an attempt to collect from the Gisters. Majority op., ¶18. On the other hand, it concludes just the opposite: that the liens are 1 No. 2009AP2795.awb not an attempt to collect from the Gisters, but rather, they are an attempt to collect the Gisters' money. ¶65 Employing a "plain language" See id., ¶31. analysis, the majority construes the statutory prohibition against "knowingly imposing direct charges upon a [Medicaid] recipient" as prohibiting only those charges that "proceed[] without interruption in a straight course or line" Apparently, the without "deviating hospital's or swerving." liens "deviate sufficiently to satisfy the majority. Id., or ¶30. swerve" Because the hospital did not send a bill to the Gisters, id., ¶34, and because the liens are directed at the Gisters' property (that is, their settlement money from the tortfeasor) and not at the Gisters themselves, id., ¶¶31, 31 n.15, the majority ultimately concludes that the hospital's liens do not constitute "direct charges." ¶66 The majority acknowledges that the Wisconsin Administrative Code permits the hospital to join the Gisters' lawsuit against the tortfeasor, but that same code provision does not expressly authorize the hospital's liens. Nevertheless, it reasons that it would be a "perverse result" if the hospital were not permitted to file a lien. Id., ¶37. It appears to conclude that there is no difference between joining a lawsuit and filing a lien because "the money being sought originates from the same source," "goes to the same recipients," and "is designated for the same purpose." ¶67 Id. Finally, the majority attempts to distinguish Dorr v. Sacred Heart Hosp., 228 Wis. 2d 425, 597 N.W.2d 462 (Ct. App. 1999), by observing that the patients 2 in that case "were No. 2009AP2795.awb protected by statutory and contractual immunity as a result of their HMO." Majority op., ¶44. It notes that the Gisters did not subscribe to an HMO, and it concludes that the principles of Dorr have no bearing on this case. Id., ¶45. II ¶68 Wisconsin Stat. § 779.80 provides that a charitable hospital "shall have a lien for services rendered . . . to any person who has sustained personal injuries of . . . any tort of any other person." as a result The lien "shall attach to" the patient's settlement against the tortfeasor.1 ¶69 If this case Medicaid recipients, hospital could did there impose a not would lien received from the tortfeasor. recipients, regulated. and involve on services be little any settlement provided doubt that the to the Gisters However, the Gisters are Medicaid Wisconsin's Medicaid program is highly Its regulations circumscribe the options available to service providers. ¶70 requires Determining a careful administrative code whether the examination provisions of hospital's the governing 1 liens complex are valid statutes Wisconsin's and Medicaid It is important to note that the hospital lien statute was created in 1961, four years prior to the advent of Medicaid. See ch. 418, Laws of 1961. Accordingly, when the hospital lien statute was created, the legislature could not have contemplated how its provisions would apply to services provided to Medicaid recipients. 3 No. program.2 Unfortunately, the majority does 2009AP2795.awb not undertake a careful examination of this law, and as a result, it overlooks two important principles underlying Wisconsin's Medicaid program that should control the outcome of this case. A ¶71 a The first principle overlooked by the majority is that hospital cannot charge covered by Medicaid. Medicaid recipients for services The reason Medicaid recipients cannot be charged is because they are not liable for the cost of these services. ¶72 Wisconsin Stat. § 49.49(3m)(a) establishes that "[n]o provider may addition to knowingly payments impose received impose direct charges upon payment [from upon Medicaid]." a [from a Medicaid] recipient The recipient in meaning in or knowingly of obtaining lieu of charges this statute is illuminated by Wis. Admin. Code § DHS 104.01(12)(b), entitled "Freedom from having to pay for services covered by [Medicaid]." It plainly certified provides: providers "Recipients for covered 2 may not services be and held items liable by furnished The relevant statutes are set forth at Wis. Stat. §§ 49.43 49.499. Additionally, the legislature has authorized the Department of Health Services (previously, the Department of Health and Family Services) to administer Medicaid on a statewide level. Wis. Stat. § 49.45(10); Wis. Admin. Code § DHS 101.01. To this end, the department has devised a complex set of regulations governing the rights and responsibilities of Medicaid providers and recipients. See Wis. Admin. Code Chs. DHS 100-109. 4 No. under the [Medicaid] program, except for 2009AP2795.awb copayments or deductibles under par. (a) . . . ."3 ¶73 The majority acknowledges that the hospital's liens are an attempt to "collect from the patient[]." ¶18. Majority op., Nevertheless, it asserts that the liens do not violate the prohibition against "direct charges." It reasons that the hospital is not seeking "direct recourse" from the patients, but rather, it is seeking recourse from the patients' money. Id., ¶31. ¶74 This reasoning is not persuasive. There is no meaningful difference between seeking recourse from a patient and seeking prohibition hospital on to recipient's other recourse "direct file money property from a the charges" cause settlement belonging patient's to of nevertheless action because a money. it Medicaid If the allowed the against is a Medicaid "property," recipient what could the cannot be hospital seek? ¶75 As explained above, Medicaid recipients charged for covered services because they are not liable for the cost of these services. The hospital's attempt to collect the patients' money settlement violates this underlying principle. 3 The non-liability of Medicaid recipients is repeated in Wis. Admin. Code DHS § 106.04(3), entitled "Non-liability of recipients." It provides, in relevant part, that a hospital may not "attempt to impose an unauthorized charge or receive payment from a recipient, relative or other person for services provided, or impose direct charges upon a recipient in lieu of obtaining payment under the program . . . ." 5 No. ¶76 For the same reason, the distinguish Dorr is unavailing. 2009AP2795.awb majority's attempt to The majority explains that the Dorrs were not liable for the cost of their services because, as members of contractual an HMO, they immunity. were protected Majority governing Wisconsin's Medicaid op., program by ¶39. statutory Here, likewise and the provides law that Medicaid recipients are immune from liability for the cost of services they receive. ¶77 The Dorr case squarely addresses the issue at hand in this case. There is no legally significant difference between the effect of the statutory and contractual immunity at issue in Dorr and the immunity at issue in this case. Based on the reasoning in Dorr, "no hospital lien can be filed against [a Medicaid recipient's] property because the [recipient] is not indebted to the hospital for the medical services provided." See id., ¶43 (quoting Dorr, 228 Wis. 2d at 435). B ¶78 The majority's analysis also overlooks a second important principle underlying Wisconsin's Medicaid program. In a situation like this be liable for services where a provided third-party to hospital has two billing options. can attempt to recover personal injury lawsuit. its a tortfeasor may Medicaid recipient, the It can bill Medicaid, or it charges by joining the Gisters' The law governing Wisconsin's Medicaid program does not authorize any third option. 6 No. ¶79 2009AP2795.awb The hospital's two options are clearly set forth in Wis. Admin. Code § DHS 106.03(8), which provides in relevant part: Personal Injury and Workers Compensation Claims. If a provider treats a recipient for injuries or illness sustained in an event for which liability may be contested or during the course of employment, the provider may elect to bill [Medicaid] for services provided without regard to the possible liability of another party or the employer. The provider may alternatively elect to seek payment by joining in the recipient's personal injury claim or workers compensation claim . . . .4 (Emphasis added.) Additionally, these two options are clearly set forth in a handbook produced by the Department of Health Services to explain the program to health care providers.5 ¶80 There are advantages and disadvantages to both of the hospital's options. If the hospital chooses the first option and bills Medicaid, its recovery of a portion of its bill is certain, but the hospital will receive reimbursement at a 4 Wisconsin Admin. Code § DHS 106.03(8) goes on to explain that the hospital cannot attempt to receive payment both from Medicaid and from the recipient's personal injury claim. 5 See DHFS, All Provider Coordination of Benefits: Medicaid and BadgerCare Information for Providers, at 21, available at https://www.forwardhealth.wi.gov/kw/pdf/all_coord.pdf. The handbook explains: Providers may choose to seek payment from worker's compensation or civil liabilities. Providers may receive more than the Medicaid-allowed amount from the settlement; however, in some cases the settlement may not be enough to cover all costs involved. Providers are not required to seek payment from worker's compensation or civil liabilities, instead of Wisconsin Medicaid, because of the time involved to settle these cases. . . . 7 No. reduced rate hospital as determined chooses the by a second Medicaid option 2009AP2795.awb formula.6 If the lawsuit is and the successful, the hospital may recover a larger portion of its charges. Nevertheless, tortfeasor may take reaching months or a settlement years. with the Additionally, the hospital's recovery is by no means guaranteed, especially when the tortfeasor has inadequate insurance. ¶81 Although the majority acknowledges that the hospital has but two options under the law, it embraces a third option. It permits the hospital to impose a lien on settlement money the Medicaid recipient recovers from the tortfeasor. ¶82 by the The option embraced by the majority is not authorized law governing Wisconsin's Medicaid program. When a statute or code provision sets forth specific options, courts frequently assume that any option that was omitted was intended to be excluded.7 The majority discards this canon of construction and concludes that, although just two options are set forth in the law governing Medicaid, three options are allowed. ¶83 The majority's justification for allowing the hospital to pursue a third option is based on the premise that there is 6 If the hospital choses the first option, the Department of Health Services will bear the responsibility of attempting to recoup those expenses from the tortfeasor. See Wis. Stat. § 49.89(2)-(3). 7 See FAS, LLC v. Town of Bass Lake, 2007 WI 73, ¶27, 301 Wis. 2d 321, 733 N.W.2d 287 (discussing the maxim "expressio unius est exclusio alterius," which means "the express mention of one matter excludes other similar matters not mentioned."). 8 No. 2009AP2795.awb no difference between joining a lawsuit and imposing a lien on the money recovered from that lawsuit. In both cases, the majority contends, "the money being sought originates from the same source (American Family), goes to the same recipients (the Gisters and St. Joseph's), and is designated for the same purpose (to satisfy the medical expenses incurred by the Gisters after the accident)." Majority op., ¶37. Because "it is permissible for St. Joseph's to pursue the funds by joining the lawsuit," the majority concludes that "it is therefore permissible for St. Joseph's to pursue the funds through liens." Id. ¶84 This premise is false. Imposing a lien on the Gisters' future settlement money is quite different from joining the Gisters' personal injury lawsuit. ¶85 If the hospital were to join the Gisters' personal injury suit as a subrogated plaintiff, it would bear certain responsibilities as a party to a lawsuit. It would be required to actively participate in the lawsuit by attending hearings, engaging in discovery, and negotiating possible settlements. ¶86 the Further, the hospital's entitlement to a portion of settlement would be subject to various common law principles, such as the made whole doctrine established in Rimes v. State Farm Mutual Automobile Insurance Co., 106 Wis. 2d 263, 272, 316 N.W.2d 348 (1982). Under Rimes, "one who claims subrogation rights, whether under the aegis of either legal or conventional subrogation, is barred from any recovery unless the [injured plaintiff] is made whole," and "[i]t is only when there 9 No. 2009AP2795.awb has been full compensation for all the damage elements of the entire cause whole." of action that Id. at 275. the [injured plaintiff] is made Accordingly, if the hospital joined the Gisters' personal injury lawsuit, it would not be entitled to any compensation until the Gisters were fully compensated for all of their damages. ¶87 The importance of hospital's the imposing a lien. attorney differences between well understands joining a the lawsuit and During oral argument, he explained: "Absent the availability of a lien, . . . you would be talking at best a subrogated interest which of course would be extinguishable at a hearing pursuant to this court's decision in Rimes. . . . I would argue that a lien under 779.80 is a priority right that is not susceptible to elimination under Rimes."8 ¶88 Unfortunately, distinctions. the majority fails to grasp these By permitting the hospital to bow out of the litigation process and impose a lien on the Gisters' settlement money, the majority arguably allows the hospital to avoid the costs of engaging in litigation and common law principles such as the made whole doctrine. In a case like this where the hospital's charges are substantial and the available insurance proceeds are limited, the hospital could absorb a majority of 8 Because the majority fails to grasp any distinction between joining a lawsuit and imposing a lien, it does not grapple with any potential consequences of its decision. Aside from this brief mention during oral argument, the parties did not brief or argue whether a hospital lien would be susceptible to elimination under Rimes, and that question has not been decided by the court. 10 No. the settlement, leaving the Gisters and other 2009AP2795.awb health care providers, such as doctors, without any recovery. ¶89 I conclude that the Gisters are entitled declaration that the hospital's liens are invalid. majority's analysis cannot be squared with the to a Because the principles underlying Wisconsin's Medicaid program, I respectfully dissent. ¶90 I am authorized to state that CHIEF JUSTICE SHIRLEY S. ABRAHAMSON and JUSTICE N. PATRICK CROOKS join this dissent. 11 No. 1 2009AP2795.awb
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