Arizona Supreme Court: Hospitals don't have to return payments from Medicaid patients

Arizona's Medicaid program has won a narrow legal victory in state court regarding its ability to file liens against patients if they were hospitalized due to a personal injury and received a payment from a third party for damages.

The Arizona Supreme Court rejected an argument that hosptials should return payments already collected from patients. At stake were six years of collected payments from patients worth potentially millions of dollars the Arizona Republic reported.

However, the high court has yet to rule on a separate legal issue: Whether such liens are legal at all. Federal law generally prohibits the practice, known as subrogation, against patients enrolled in Medicare and Medicaid.

The use of such liens against patients has drawn controversy in other states. In 2014, St. Luke's Health in Missouri settled class-action litigation stating it filed claims against patients' automobile insurers if they were brought in after being injured in a car accident, even if they had medical coverage. The presumption was that the automobile carrier would make a bigger payout. But if that insurer rejected the claim and the time window to file a medical claim had closed, liens would often be filed against the patient. Attorneys say the practice has occurred in Colorado, Louisiana and other states.

However, states do have the legal option under federal law of collecting Medicaid payments back from enrollees' estates after they die if they received nursing home care or other specialty services. Not every state engages in such collections, but the practice has drawn a fair level of scrutiny.

To learn more:
- read the Arizona Republic article

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