Mcg Health Inc v. Owners Ins. Co., A09A1817.

Citation692 S.E.2d 72,302 Ga.App. 812
Decision Date12 July 2010
Docket NumberNo. A09A1817.,A09A1817.
CourtUnited States Court of Appeals (Georgia)

302 Ga.App. 812
692 S.E.2d 72


No. A09A1817.

Court of Appeals of Georgia.

March 12, 2010.
Certiorari Granted July 12, 2010.

692 S.E.2d 73


692 S.E.2d 74
Hull & Barrett, David E. Hudson, Augusta, for appellant.

Talley, French & Kendall, Michael C. Kendall, Conyers, Nicholson & Revell, Harry D. Revell, Bell & Bell, David B. Bell, Augusta, for appellee.

DOYLE, Judge.

This case arises from the dismissal of a complaint filed by MCG Health, Inc. (“MCG”), against Owners Insurance Company (“Owners”), against which MCG had filed a hospital lien for services provided to Braxton Morgan at the Medical College of Georgia after he was injured in an automobile accident caused by an individual insured by Owners. The trial court granted third-party defendant Morgan's cross-motion for summary judgment, dismissing MCG's complaint. For the reasons that follow, we affirm.

At the time he received treatment at the Medical College of Georgia, Morgan was an active duty member of the United States Army covered by the United States Department of Defense TRICARE health insurance program. MCG had a contract to provide certain services to beneficiaries of the TRICARE program, and the contract provided limitations on MCG's recovery of payment for medical services provided to TRICARE beneficiaries. The total cost of the services provided to Morgan at the Medical College of Georgia was $18,259.61. After Morgan was discharged from the hospital, MCG filed a hospital lien for the full cost of services provided to Morgan pursuant to OCGA § 44-14-470 et seq., against all causes of action against unknown persons liable for Morgan's injuries; MCG did not bill TRICARE at any time before or after filing the hospital lien. After MCG filed the hospital lien, Morgan entered into a release and settlement agreement with Owners for $50,000; however, Owners and its insured did not admit liability for the accident as part of the settlement. In exchange for the sum, Morgan agreed to release all his claims against Owners, to indemnify Owners and its insured, and to settle all valid liens incurred based on the accident from the settlement proceeds, $18,259.61 of which was placed into an escrow account in the event that the hospital lien was determined to be valid.

MCG instituted the action below against Owners in order to collect on its hospital lien. Owners then filed a third-party complaint against Morgan, who then filed an answer, cross-claims against MCG, and a motion to dismiss MCG's complaint for failure to state a claim, arguing that the hospital lien was invalid. MCG also filed a motion for summary judgment.

The trial court granted Morgan's motion to dismiss MCG's complaint for failure to state a claim, but treated the motion as a cross-motion for summary judgment. In its order, the trial court found that the contract between MCG and TRICARE precluded MCG from recovering the cost of Morgan's services from Owners (1) because the section of the contract relied upon by MCG to establish its right to file the hospital lien conflicted with other parts of the contract and with federal statutes and regulations governing TRICARE, which were made part of the contract; (2) because the contract required MCG to submit a bill to TRICARE for reimbursement prior to taking other steps for reimbursement; and (3) because balance billing a TRICARE beneficiary, which the court determined would effectively occur if MCG

692 S.E.2d 75
was able to collect under its hospital lien, was prohibited by the contract and by federal statute.

1. As an initial matter, Morgan has filed a motion to dismiss MCG's appeal, arguing that the order is not immediately appealable because it dismissed MCG's claim, but Morgan's cross-claims remain pending below. While it is true that Morgan's cross-claims remain pending, the trial court treated Morgan's motion to dismiss as a cross-motion for summary judgment, and an order granting partial summary judgment is immediately appealable even if the trial court has not certified the order for immediate review.1 Accordingly, Morgan's motion to dismiss is without merit, and we have jurisdiction to review the appeal.

2. Generally, a hospital has the right to file a lien for reasonable charges against any cause of action accruing to an injured person to whom the hospital provided care.2 OCGA § 44-14-470(b) makes clear that the lien is not against the treated individual and only attaches to the individual's available causes of action. Moreover, “[n]o release of the cause or causes of action or of any judgment thereon or any covenant not to bring an action thereon shall be valid or effectual against the lien ... unless the holder thereof shall join therein or execute a release of the lien.” 3 Nevertheless, a contract between the treated individual's health insurer and the health care provider may preclude a hospital from seeking recovery through the statutory lien process.4

3. MCG argues that the trial court erred in granting summary judgment to Morgan because specific provisions of the TRICARE manual allow MCG to forgo payment from TRICARE and instead seek full payment from Owners via Georgia's hospital lien statute.

This Court reviews de novo the trial court's grant of partial summary judgment.5 “The construction of a contract is a question of law for the courts, ... as is the existence or nonexistence of an ambiguity in a contract....” 6 If the terms of a contract are clear, the court looks only to the contract to find the parties' intent.7 “If the contract is ambiguous in some respect, the court must apply the rules of contract construction to resolve the ambiguity.” 8

Viewing the evidence in the light most favorable to MCG,9 the record shows that Section 17 of the contract between MCG and TRICARE, labeled “No Liability to Beneficiaries for Charges,” states:

[MCG] hereby agrees that in no event, including, but not limited to nonpayment by [Humana Military Healthcare Services, Inc. (“HMHS”)] or the Government, HMHS insolvency or breach of this Agreement,
692 S.E.2d 76
shall [MCG] bill, charge, collect a deposit from, seek compensation, remuneration, or reimbursement from, or have any recourse against Beneficiaries, or persons other than HMHS acting on their behalf, for Covered Services provided pursuant to this Agreement.10 This provision shall not prohibit collection of fees for any non-covered service and/or Copayments in accordance with the terms of the Beneficiary's coverage and this Agreement.
Nothing in this Agreement shall be construed to limit [MCG]'s rights under OCGA § 44-14-470 et seq. [MCG] shall have the right to seek to recover its charges, to the extent that said charges exceed what Health Plan or Payor pays [MCG] pursuant to this Agreement, incurred as a result of Hospital's providing Hospital Services to Members and which charges are the liability of a third party. The parties further agree that payment by Health Plan or Payor to [MCG] does
not extinguish [MCG]'s lien or in any way limit [MCG]'s rights under OCGA § 44-14-470, et seq., except that the amount of the [MCG]'s lien shall not include the amount of any payment(s) by Health Plan or Payor to [MCG] on behalf of a Member.

[MCG] further agrees that (I) this provision shall survive termination of this Agreement regardless of the cause giving rise to termination and shall be construed to be for the benefit of the Beneficiary, (II) this provision supersedes any oral or written contrary Agreement now existing or hereafter entered into between [MCG] and Beneficiary or persons acting on their behalf, and (III) this provision shall apply to all employees and subcontractors of [MCG].11

The contract also specifically made part of the agreement “[t]he Provider Handbook and the statutes, regulations[,] and manuals applicable to the TRICARE program....”

Chapter 11, Section 5, paragraph 5.5.2 of the TRICARE manual states:

It is important to note that prior to submission of a TRICARE claim, the hospital is not precluded from seeking recovery of its billed charge 12 directly from the liable third party or insurer, including auto or home owners insurance, no-fault auto or uninsured motorist coverage. However, the hospital may not bill the beneficiary without filing a TRICARE claim. Once a TRICARE claim is filed, the hospital may not seek recovery of any amount, other than the applicable beneficiary deductible and cost-share, from the beneficiary, the third party, or the liability insurer because of the limitations imposed by the TRICARE participation requirements.13

The trial court determined that this section, while it appeared to support MCG's position, actually addressed collection from a beneficiary's other insurers (rather than a liable third party's insurers) because 10 USC § 1095 defines third party payor as a contractually obligated payor, not as a tortfeasor. Moreover, the trial court determined that the second sentence of Section 5.5.2 precluded MCG from recovering any sum until it first billed TRICARE, and that by billing TRICARE, MCG would be precluded from attempting to recover under the hospital lien statute.

The trial court's conclusion, however, is incorrect based on the manual's earlier definition of “Third Party Liability (TPL) Recovery.” Section 5, paragraph 2.1 of the manual explains that a “third party will be an individual (or an entity) liable for tort damages to the injured TRICARE beneficiary. Recovery may be obtained from the third party and/or from a liability insurance carrier covering

692 S.E.2d 77
the third party.” Thus, it is clear that within the context of the manual, including paragraph 5.5.2, the use of the term “liable third party” includes a tortfeasor's liability insurer and is not limited to entities with contractual relationships with the beneficiary. Moreover, 10 USC § 1095 limits its definition of “third-party pay[o]r” to that section of the U.S.Code.14

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5 cases
  • MCG Health, Inc. v. Kight, A13A1149.
    • United States
    • United States Court of Appeals (Georgia)
    • 22 Noviembre 2013
    ...construed as a waiver or preclusion of the Hospital's lien rights under OCGA § 44–14–470 et seq. In MCG Health, Inc. v. Owners Ins. Co., 302 Ga.App. 812, 692 S.E.2d 72 (2010), this Court held that, because no debt was owed to the hospital under the contract between the hospital and the inju......
  • Mcg Health Inc. v. Owners Ins. Co.., S10G1142.
    • United States
    • Supreme Court of Georgia
    • 18 Marzo 2011 state a claim for which relief could be granted. The Court of Appeals affirmed the decision in MCG Health, Inc. v. Owners Ins. Co., 302 Ga.App. 812, 692 S.E.2d 72 (2010). We granted certiorari to consider whether the Court of Appeals erred in its construction of OCGA § 44–14–470. We now ......
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    • United States
    • Supreme Court of Georgia
    • 24 Enero 2011
    ...state a claim for which relief could be granted. The Court of Appeals affirmed the decision in MCG Health, Inc. v. Owners Insurance Co., 302 Ga. App. 812 (692 SE2d 72) (2010). We granted certiorari to consider whether the Court of Appeals erred in its construction of OCGA §44-14-470. We now......
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    • United States District Courts. 8th Circuit. Western District of Arkansas
    • 29 Septiembre 2017
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