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Andrews v. Samaritan Health System12/11/2001
on statute, A.R.S. § 33-932?
6. Are voluntary payments made by Smith and Weirick subject to reimbursement as funds converted by the hospitals?
4
STANDARD OF REVIEW
"Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law." Orme Sch. v. Reeves, 166 Ariz. 301, 305, 802 P.2d 1000, 1004 (1990). We review both the propriety of summary judgment and issues of statutory interpretation de novo. Arizona Health Care Cost Containment Sys. v. Bentley, 187 Ariz. 229, 231, 928 P.2d 653, 655 (App. 1996) (citation omitted).
DISCUSSION
I. THE VALIDITY OF THE HOSPITALS' MEDICAL LIENS
Plaintiffs argue that, under the hospitals' contracts with their insurers, their care was paid in full leaving no debt upon which the hospitals could base medical liens. The hospitals respond that the balance of the customary charges, after payment by the insurers, constitutes the "debt" supporting the medical liens. We agree with the hospitals.
In Arizona, a lien "is a charge or encumbrance upon property to secure the payment or performance of a debt, duty, or other obligation. . . . In the absence of an obligation to be secured there can be no lien." Matlow v. Matlow, 89 Ariz. 293, 297-98, 361 P.2d 648, 651 (1961) (citations omitted). Section 33-931(A) provides:
Every [health care provider] is entitled to a lien for the customary charges for care and treatment or transportation of an injured person, on all claims of liability or indemnity except health insurance for damages accruing to the person to whom the services are rendered, or to that person's legal representative, on account of the injuries that gave rise to the claims and that required the services.
These facts present an issue of first impression in Arizona. Plaintiffs cite several cases from other jurisdictions to support a claim that when a health care provider accepts an insurer's payment as "payment in full," the debt is extinguished and there is no basis for asserting a medical lien. See Satsky v. United States, 993 F. Supp. 1027, 1029 (S.D. Tex. 1998); N.C. ex rel. L.C. v. A.W. ex rel. R.W., 713 N.E.2d 775, 776 (Ill. App. 1999); Dorr v. Sacred Heart Hosp., 597 N.W.2d 462, 468, 471-72 (Wis. App. 1999); Wright v. First Nat'l Bank in Albuquerque, 941 P.2d 498, 500-02 (N.M. 1997). While each of the above cases found that no debt existed to support a lien because the provider accepted the insurer's payment as "payment in full," those cases are distinguishable in two ways.
First, the contracts in each of the above cases failed to reserve the providers' right to recapture the difference between the contract payments and the customary charges. See id. Conversely, the instant contracts each contained language stating that the hospitals accepted the plaintiffs' insurer's payment as "payment in full," and all but Markland's expressly reserved the right to recapture the difference between any payments made by the insurer and the providers' customary charges. Unlike the contracts in the cases from other jurisdictions, this reservation clearly qualifies the "payment in full" language and sets forth the hospitals' expectation to recover their customary charges when possible.
Second, and more importantly, by virtue of A.R.S. § 33-931, medical liens automatically arise following treatment. The statute states that a provider "is entitled to a lien for the customary charges for care and treatment . . . of an injured person" without specifying further action by the hospitals. A.R.S. § 33-931(A). This conclusion is evidenced in the perfection st
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