Lacey Robinett, Individually and on behalf of all others similarly situated Plaintiff - Appellant
Shelby County Healthcare Corporation, doing business as Regional One Health, doing business as Regional Medical Center; Avectus Healthcare Solutions LLC Defendants - Appellees
Submitted: January 11, 2018
from United States District Court for the Eastern District of
Arkansas - Jonesboro
SMITH, Chief Judge, MELLOY and SHEPHERD, Circuit Judges.
Robinett appeals the district court's grant of judgment
on the pleadings to Shelby County Healthcare Corporation
("the Med") and Avectus Healthcare Solutions, LLC.
Robinett contends that the district court erroneously
concluded that the federal and Arkansas Medicaid laws do not
bar a medical services provider from billing patients
directly until and unless the provider bills Medicaid. We
Robinett was severely injured in an automobile accident in
Arkansas. Another vehicle's driver was at fault. An air
ambulance transported Robinett to the Med, the nearest trauma
center, in Memphis, Tennessee, for immediate treatment. As a
general condition of admission, the Med requires its patients
to assign to the facility all of their health,
hospitalization, and other insurance benefits. At the time of
her admission, Robinett was a Medicaid recipient. The Med had
an agreement with Arkansas Medicaid to provide services to
Medicaid beneficiaries from Arkansas. However, subsequent to
treating Robinett, the Med chose not to bill Arkansas
Medicaid for its services. Instead, pursuant to Tenn. Code
Ann. § 29-22-101, the Med pursued a lien against
Robinett's third-party claim against the tortfeasor
"for all reasonable and necessary charges for hospital
care, treatment and maintenance."
the accident, Robinett filed suit against the other driver
who caused the wreck. She settled her damages claim with the
at-fault driver's insurance company and received $100,
000 in compensation. The Med billed Robinett for $23, 750.54,
the amount the Med claimed she owed for its medical services.
Because Robinett was Medicaid eligible under Arkansas law,
the Med could have billed Arkansas Medicaid but chose to bill
Robinett directly instead. The Med contracted with Avectus as
a collection agent to recover the charges from Robinett. In
response to the collection effort, Robinett filed a class
action suit against the Med and Avectus, alleging that both
federal and Arkansas Medicaid laws prohibited the Med from
directly billing Medicaid beneficiaries. The Med moved for
judgment on the pleadings. The district court ruled for the
Med and Avectus, concluding that they had "gambled on
Robinett's potential recovery from a third party, and
won." Robinett v. Shelby Cty. Healthcare Corp.,
No. 3:16-cv-00188-DPM, 2017 WL 417197, at *1 (E.D. Ark. Jan.
31, 2017). Robinett appeals.
contends the district court misapplied both federal and
Arkansas Medicaid law when it granted judgment on the
pleadings in favor of the Med and Avectus. "We review
the grant of judgment on the pleadings de novo, viewing the
facts in [Robinett's] complaint as true and granting all
reasonable inferences in her favor." McIvor v.
Credit Control Servs., Inc., 773 F.3d 909, 912 (8th Cir.
2014) (citing Poehl v. Countrywide Home Loans, Inc.,
528 F.3d 1093, 1096 (8th Cir. 2008)).
Patient Billing Under Federal Medicaid Laws
contends that federal law bars direct patient billing. She
grounds her argument on 42 U.S.C. § 1396a(a)(25)(C),
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 .
. ., or (II) the amount by which the amount payable for that
service under the plan . . . exceeds the total of the amount
of the liabilities of third parties for that service . . . .
interprets the provision to prohibit a Medicaid services
provider from all direct patient billing. The district court
disagreed, citing to 42 U.S.C. § 1396a(a)(25)(B), (H),
and (I)(ii). Based on its interpretation of those provisions,
the district court concluded that §
1396a(a)(25)(C)'s prohibition of direct patient billing
only comes into effect once a provider has opted to bill and
to accept payment from Medicaid. Although we have not had the
occasion to interpret the provision, several of our sister
circuits have concluded that § 1396a(a)(25)(C) has a
much narrower scope than Robinett suggests. We agree. See
Mader v. United States, 654 F.3d 794, 800 (8th Cir.
2011) (en banc) ("We ...