Health Care Authority of City of Huntsville v. Madison County

• Decision Date: 22 May 1992
• Citation: 601 So.2d 459
• Parties: HEALTH CARE AUTHORITY OF the CITY OF HUNTSVILLE, d/b/a Huntsville Hospital v. MADISON COUNTY, et al. 1901638.
• Court: Alabama Supreme Court

Page 459

601 So.2d 459

HEALTH CARE AUTHORITY OF the CITY OF HUNTSVILLE, d/b/a Huntsville Hospital v. MADISON COUNTY, et al.

1901638.

Supreme Court of Alabama.

May 22, 1992.

Rehearing Denied July 10, 1992.

James P. Smith and Raymond D. Waldrop, Jr. of Smith & Waldrop, Huntsville, for appellant.

Julian D. Butler of Sirote & Permutt, P.C., Huntsville, for appellees.

PER CURIAM.

This case is before this Court for the second time. The background of this case is set out in Childree v. Health Care Authority of the City of Huntsville, 548 So.2d 419 (Ala.1989). The issue in Childree was whether the State of Alabama, the Department of Mental Health, or Madison County was responsible for paying $700,000 in costs incurred by Huntsville Hospital for the pre-commitment care and treatment of indigent Madison County citizens who had been involuntarily committed to the custody of the Department of Mental Health.

The history of this case is as follows:

"In early 1982, Madison County began placing indigents in Huntsville Hospital for treatment and custodial care. Between February 1982 and August 1984, the probate judge billed the State of Alabama's general fund on behalf of the hospital for more than $400,000 for care and treatment of indigents. The costs were paid by the State from a line item in the general fund appropriations entitled 'court costs not otherwise provided for.' Once payment was received, the probate judge forwarded it to the hospital.

"In August 1984, the State ceased paying these bills--which at that time are alleged to have exceeded more than half the total yearly court costs budgeted for all counties. Prior to the filing of this action, Madison County was the only county submitting such charges and having them paid. The State seeks to recover all amounts paid to Madison County, which it alleges were mistakenly paid. After August 1984, when State funds were no longer forthcoming, Madison County continued (and it continues) to refer indigents to the hospital, where Madison County has incurred $700,000 in unpaid medical bills. Both Madison County and the hospital seek payment of these bills by the State and an injunction forcing the State to continue payments."

Childree, 548 So.2d at 419-20.

The trial court held that the State was required to pay the costs. We reversed and held that the financial responsibility for the costs was on Madison County, stating:

"Our holding in Ex parte Department of Mental Health, 511 So.2d 181 (Ala.1987), compels us to conclude that the ultimate financial responsibility for the treatment offered by Huntsville Hospital rests with Madison County. We held in Department of Mental Health, supra, that the costs of private care of a person in the custody of the Department of Mental Health must be assessed against that person or his/her family, or, in the alternative, the county. In the instant case, these persons are financially incapable of defraying the costs involved for care and treatment. Ala. Const. 1901, Art. IV, § 88 states that '[i]t shall be the duty of the legislature to require the several counties of this state to make adequate provision for the maintenance of the poor'; this places on Madison County the duty of caring for its indigent citizens. We agree with the ... argument that had the Legislature intended for the State general fund to be responsible for these costs [the costs of caring for indigent, mentally ill persons that are involuntarily committed], it would have specifically stated so in Code of Alabama 1975, § 22-21-291 (the Health Care Responsibility Act) and that the private psychiatric treatment of indigent persons awaiting acceptance at a Department of Mental Health facility is not one of the costs contemplated in the 'and all other costs allowable by law shall be paid by the state general fund upon order of the probate judge' language of § 22-52-14."

Childree, 548 So.2d at 421.

We reversed and remanded the case to the trial court. On remand, the Health Care Authority of the City of Huntsville, d/b/a Huntsville Hospital (the "Hospital") submitted bills, including interest, for $1,075,527.34 in psychiatric patient care for involuntarily committed indigent citizens. The Hospital filed a motion to strike the County's answer of November 15, 1989. The facts regarding the motion to strike are as follows: Madison County on November 20, 1986, filed a motion to dismiss the Hospital's complaint. That motion was overruled on December 2, 1986, and the County was allowed 20 days to file an answer. However, it did not do so until almost three years later, on November 15, 1989. The County's belated answer raised, for the first time, the Hospital's failure to comply with the Alabama statutory requirements regarding claims against counties. In ruling upon the Hospital's motion to strike, the trial court stated:

"By this Court's order of December 2, 1986, the defendants [the County] were required to answer the plaintiff's complaint by December 22, 1986. No answer was filed. If an answer containing the affirmative defense of noncompliance with the county statutes of nonclaims had been timely filed, all medical bills for which the plaintiff sought payment which were not already barred could have been salvaged by amending plaintiff's claim to the County. Because defendants failed to assert this affirmative defense in a timely manner, plaintiff was not put on notice with regard to defendants' objections, and therefore, sought neither to cure existing deficiencies nor to handle future claims in a different manner. Consequently, plaintiff's claims which would not have been barred on December 22, 1986 (when defendants' answer was due) have been actually prejudiced by defendants' failure to timely answer, and, subsequent attempt to assert the affirmative defense of noncompliance with the county statute of nonclaims.

"However, the claims at issue in this proceeding began to accrue in 1982. Therefore, many of these claims were barred on December 22, 1986, when defendants' answer was due. Consequently, defendants' delay in answering did not prejudice plaintiff's claims which already would have been barred on December 22, 1986.

"Accordingly, it is ordered, adjudged, and decreed that: (a) with respect to all claims by plaintiff which would not have been barred on December 22, 1986, plaintiff's motion to strike defendants' answer ... is hereby granted; however, (b) with respect to all claims by plaintiff which already would have been barred on December 22, 1986, plaintiff's motion to strike defendants' answer ... is overruled and denied."

The trial court determined that the amount the Hospital could recover was limited by the Alabama Health Care Responsibility Act. The trial court held that the failure to file certain itemized claims barred the Hospital from recovery on those claims. Also, the trial court held that no prejudgment interest was owed to the Hospital. On June 12, 1991, the trial court entered a final judgment in favor of the Hospital in the amount of $551,218.21.

First, the Hospital argues that the trial court erred in computing the sums due to it by limiting the hospital's recovery to that specified in the Alabama Health Care Responsibility Act ("AHCRA") rather than the Hospital's actual charges. The Hospital contends that the parties had stipulated to the amount actually incurred as reasonable and necessary costs and contends that the County should pay that amount. Second, the Hospital argues that the trial court erred in determining that the hospital's failure to file certain itemized claims with Madison County pursuant to § 6-5-20 and § 11-12-5 barred recovery on a substantial portion of all of the accounts. Third, the Hospital argues that the trial court erred in failing to assess any prejudgment interest on the accounts.

The Hospital contends that this Court construed § 22-52-14, Ala.Code 1975 (the statute dealing with the payment of costs in civil commitment proceedings), in pari materia with § 22-21-291, Ala.Code 1975, part of the AHCRA, to determine that Madison County was responsible for the costs of involuntarily committed, indigent Madison County citizens. The Hospital argues that only § 22-21-291 applies and that the remaining sections of the AHCRA, including those sections limiting the amount the Hospital can recover, do not apply. Section 22-52-14 provides, in pertinent part, as follows: "In any commitment proceeding, ... all other costs allowable by law shall be paid by the state general fund upon order of the probate judge...."

Section 22-21-291 provides as follows:

"It is the intent of the legislature to place the ultimate financial obligation for the medical treatment of indigents on the county in which the indigent resides for all those costs not fully reimbursed by other governmental programs or third-party payers."

The hospital argues that the remaining sections of the AHCRA do not apply and, more specifically, that the sections limiting the amounts that may be recovered by the hospital do not apply.

Nowhere in Childree did this Court state that only § 22-21-291 was to be read in pari materia with the involuntary commitment statutes. All of the sections of the AHCRA are applicable to the Hospital, including the portions limiting the Hospital's recovery.

The second issue raised by the Hospital is whether the trial court erred in determining that the Hospital's failure to comply with § 6-5-20 and § 11-12-5, Ala.Code 1975, barred recovery on a substantial portion of the accounts. The Hospital filed three claims with the County, the first on December 15, 1986, the second on May 9, 1989, and the third on July 10, 1990. Thereafter, the Hospital submitted a separate claim to the county as each new commitment patient was discharged.

The requirements that must be met in order to sue a county are set out in §§ 6-5-20, 11-12-5, 11-12-6, and 11-12-8. Those...