On Friday, October 7th, the Wisconsin Supreme Court heard arguments in a Gister v. American Family Mutual Insurance Company, 2009AP2795. The case examines whether a charitable hospital that is required by law to provide emergency medical services to all persons, including the uninsured, may enforce a hospital lien pursuant to Wis. Stat. § 779.80 on a Medicaid recipient’s personal injury settlement as an alternative to billing Medicaid.

The circuit court had ruled that the hospital could do so. The decision was reversed in the Court of Appeals, which relied on Dorr v. Sacred Heart Hospital, 228 Wis. 2d 425, 597 N.W.2d 462 (Ct. App. 1999). Dorr held that when the contract between an HMO and hospital contains a hold harmless provision, the hospital may not file a hospital lien against an HMO’s patient’s property because the HMO patient is not indebted to the hospital for the medical services provided. Likewise, a Medicaid patient is not indebted to the hospital for the medical services provided, and therefore the lien provision is not available to the hospital in the present case.

On appeal, Saint Joseph’s of Sheboygan argues that the Court of Appeals decision contravenes Congress’s intent that Medicaid should be the payer of last resort. The hospital contends that it is well-settled that hospitals may bill either Medicaid or file a lien on proceeds that may be paid by third party tortfeasors and that a debt does exist for which Medicaid benefits are not authorized because the settlement proceeds are available to pay for medical costs. Plaintiffs contend that neither federal or state law permit the filing of a hospital lien in these circumstances and that the Court of Appeals reliance on the Dorr decision is correct.

The Health Law team at von Briesen will monitor the progress of the case, including the Wisconsin Supreme Court’s decision, which is anticipated by spring.