Gister v. Am. Family Mut. Ins. Co.

• Decision Date: 11 July 2012
• Docket Number: No. 2009AP2795.,2009AP2795.
• Citation: 2012 WI 86,818 N.W.2d 880,342 Wis.2d 496
• Parties: 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.
• Court: Wisconsin Supreme Court

342 Wis.2d 496

818 N.W.2d 880

2012 WI 86

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.

No. 2009AP2795.

Supreme Court of Wisconsin.

Argued Oct. 7, 2011.

Decided July 11, 2012.

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 & Skow, S.C., New Richmond, for the Wisconsin Association for Justice.

MICHAEL J. GABLEMAN, J.

[342 Wis.2d 500]¶ 1 We review an unpublished, per curiam decision of the court of appeals,¹ reversing a declaratory judgment of the Dane County Circuit Court, Patrick J. Fiedler, Judge.

¶ 2 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 Wisconsin Statutes section 779.80 (“hospital lien statute”). We conclude that the soundest harmonization of the two permits the liens at issue here, and we therefore reverse the court of appeals.

I. BACKGROUND

¶ 3 The relevant facts are undisputed. Jeffrey Mohr negligently ran a stop sign and crashed into a car containing Jaymie Gister and her sons Ethan Gister and Jared Ellis (“Gisters”). Another son of Jaymie Gister, Skylar Gister, ² was also 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. Joseph's Hospital (“St. Joseph's”). As later calculated by St. Joseph's,³ the Gisters received 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.

[342 Wis.2d 502]¶ 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 statute ⁵ 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. PROCEDURAL HISTORY

¶ 5 After St. 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 Wisconsin Administrative Code section DHS 106.03(8)⁶ to either file the liens or bill Medicaid. 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 liens did not constitute “direct charges” upon the Gisters. The circuit court likewise rejected the Gisters' contention that St. Joseph's liens were invalid under Dorr v. Sacred Heart 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”). The Gisters appealed.

¶ 6 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., 2010 WL 4513412 (Wis.Ct.App. Nov. 11, 2010). 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. The court of appeals rejected St. Joseph's argument that Wis. Admin. Code § DHS 106.03(8)(allowing hospitals to either bill Medicaid or join personal injury lawsuits when liability “may be” contested) provided authority for the liens. Id., ¶¶ 18–20. 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 had no bearing on the validity of St. Joseph's liens. Id. Consequently, the court of appeals reversed and remanded the cause to the circuit court with directions to issue an order holding St. Joseph's liens invalid. Id., ¶ 22.

[342 Wis.2d 505]¶ 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. Wangard, 2008 WI 99, ¶ 18, 313 Wis.2d 329, 753 N.W.2d 475. There were no disputed issues of fact at the circuit court, and the circuit court's 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, 181 L.Ed.2d 489 (2011).

IV. STATUTORY INTERPRETATION

¶ 9 We are called upon to interpret and harmonize a variety of statutes and regulations. When conducting such interpretations, we begin with certain background principles in mind. We must give language “its common, ordinary, and accepted meaning, except that technical or specially-defined words or phrases are given their technical or special definitional meaning.” 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

¶ 10 There is no contention here that St. Joseph's liens were 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 treat each contentionin turn and find neither persuasive. In particular, we hold that St. Joseph's liens were fully 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 with the federal requirements. 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 therefore invalid under Wis. Stat. § 49.49(3m)(a). We conclude, to the contrary, that St. Joseph's liens were consistent with federal law and with the plain language of § 49.49(3m)(a). In support of our conclusion, we also show how our interpretation of § 49.49(3m)(a) best harmonizes the provision with related regulations. 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 Although there is no federal cause of action asserted in the case at bar, federal law provides the appropriate framework to analyze the case because it defines many of Wisconsin Medicaid's features and obligations. With that in mind, we begin with an overview of Medicaid and of its provisions for the...