St. Joseph's Hosp. v. Arizona Health Care Cost Containment System

• Decision Date: 23 April 1996
• Docket Number: CA-CV,No. 1,1
• Citation: 916 P.2d 499,185 Ariz. 309
• Parties: ST. JOSEPH'S HOSPITAL and Medical Center, an Arizona corporation, Plaintiff-Appellee, v. ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM, an agency of the State of Arizona; Leonard Kirschner, M.D., as Director of the Arizona Health Care Cost Containment System Administration; and Maricopa County Health Plan, a department of Maricopa County, a political body of the State of Arizona, Defendants-Appellants. 94-0269.
• Court: Arizona Court of Appeals

Page 499

916 P.2d 499

185 Ariz. 309

ST. JOSEPH'S HOSPITAL and Medical Center, an Arizona corporation, Plaintiff-Appellee, v. ARIZONA HEALTH CARE COST CONTAINMENT SYSTEM, an agency of the State of Arizona; Leonard Kirschner, M.D., as Director of the Arizona Health Care Cost Containment System Administration; and Maricopa County Health Plan, a department of Maricopa County, a political body of the State of Arizona, Defendants-Appellants.

No. 1 CA-CV 94-0269.

Court of Appeals of Arizona,

Division 1,

Department C.

April 23, 1996.

Richard M. Romley, Maricopa County Attorney by William F. Molner, Deputy County Attorney, Phoenix, for Defendant-Appellant Maricopa County Health Plan.

Johnston Maynard Grant and Parker, P.L.C. by Catherine Dodd, Phoenix, for Defendant-Appellant Arizona Health Care Cost Containment System.

Gammage & Burnham, P.L.C. by Richard B. Burnham and Cameron C. Artigue, Phoenix, for Plaintiff-Appellee.

OPINION

FIDEL, Judge.

This case arises from the denial by the Maricopa County Health Plan ("MCHP")--an Arizona Health Care Cost Containment System ("AHCCCS") contract provider--of a reimbursement claim submitted by St. Joseph's Hospital and Medical Center ("St. Joseph's") for emergency treatment and hospitalization of an MCHP member. MCHP denied reimbursement because St. Joseph's failed to give MCHP timely notice that it was treating a member of the MCHP plan. The AHCCCS director upheld the denial of reimbursement on administrative review, but the superior court reversed the agency's decision on administrative appeal. On further appeal to this court, we examine the reasons for, and consequences of, St. Joseph's inability to give timely notice. We also examine an AHCCCS rule that permits denial of reimbursement as a consequence of untimely notice, and we consider the factors bearing upon the just exercise of the discretion afforded by that rule.

BACKGROUND

Jose Luera Sanchez ¹ was struck by a motorcycle on June 30, 1989, and admitted to St. Joseph's Hospital as a level I trauma patient, requiring the highest level of emergency care. The patient carried two forms of identification; an Arizona Driver's License identified him as "Jose Luera Sanchez," and a resident alien visa (green card) identified him as "Luera Sanchez, Jose." Both documents combined the patient's father's surname, "Luera," with his mother's surname, "Sanchez." He had signed both cards "Jose Luera," and both contained the birth date March 6, 1929.

When a patient's AHCCCS membership or eligibility is not known, a health-care provider furnishing services to him must contact AHCCCS administration to determine whether the patient is enrolled in an AHCCCS plan. Arizona Administrative Code ("A.A.C.") Rule 9-22-308(B). St. Joseph's did so within thirty minutes of the patient's arrival. If the patient is enrolled, the "provider must notify the member's contractor within 12 hours of the time the member registers for services." A.A.C. Rule 9-22-210(B). The AHCCCS verification unit could not find any record for the patient.

The parties dispute whether St. Joseph's gave AHCCCS the paternal surname "Luera." Neither St. Joseph's nor AHCCCS personnel remember the call. Although St. Joseph's witness testified that St. Joseph's probably gave the full name "Jose Luera Sanchez," the AHCCCS employee who took the call testified that she recorded only "Jose Sanchez." The AHCCCS witness added that she was Hispanic, understood the traditional order of Hispanic surnames, and would have looked for "Jose Luera" if St. Joseph's had given the full name. It is undisputed that St. Joseph's gave the correct birth date.

When a health-care provider in the position of St. Joseph's discovers that an apparently eligible patient is not registered with an AHCCCS plan, the provider may file a priority application with the county eligibility office in the patient's county of residence. A.A.C. Rule 9-22-308(B). Promptly after its call to AHCCCS, St. Joseph's phoned Maricopa County's eligibility office to request a priority application. Meanwhile, St. Joseph's proceeded to give necessary care.

On July 19, 1989, Maricopa County, acting upon the priority application, found the patient eligible for AHCCCS. But at approximately the same time, the patient's roommate told St. Joseph's that the patient was already enrolled in AHCCCS and a member of MCHP. After confirming the roommate's information in a second phone call to the AHCCCS verification unit, St. Joseph's notified MCHP that its patient was already an MCHP member and was receiving ongoing hospital care.

MCHP approved and paid $1,939.00 for services that St. Joseph's provided after the notification date of July 20, 1989, but denied reimbursement for $34,652.79 in services provided between June 30 and July 19. St. Joseph's filed grievances with AHCCCS, which were informally denied, and then proceeded to formal hearing before an AHCCCS hearing officer.

The hearing officer found that St. Joseph's had given only the maternal surname "Sanchez," not the paternal surname "Luera" or the full name "Luera Sanchez." But the hearing officer also found that, even if St. Joseph's had given the name "Luera" or "Luera Sanchez," AHCCCS would have been unable to identify him as an AHCCCS enrollee because the patient was incorrectly listed within computer records. The AHCCCS records were mistaken in two respects: "Luera" was spelled "Luira," and the birth date was recorded as March 29, 1920, not March 6, 1929. The mistaken data had been given to AHCCCS by Maricopa County.

Nonetheless, the hearing officer denied St. Joseph's reimbursement, reasoning:

A batter who is thrown out at first base cannot complain that second base is missing. It simply does not matter what information AHCCCS had on hand because the Hospital did not prove that it had reached the stage whereby AHCCCS was required to give it correct information.

The AHCCCS director adopted the hearing officer's recommendation, and, after exhausting the administrative process, St. Joseph's sought judicial review.

The superior court rejected the AHCCCS finding that St. Joseph's provided only the last name "Sanchez" and not the patient's full name. The superior court also found the denial of payment arbitrary and capricious in light of mistakes in AHCCCS records that would have prevented AHCCCS from locating the patient in its system even if St. Joseph's had provided the paternal surname. The court ordered MCHP to pay St. Joseph's full charges incurred prior to July 2, 1989, when the patient was first available for transport to a county facility, and to pay the lesser charges that MCHP would have incurred from July 2 to July 20, had the patient been transferred to a county facility. The court ordered AHCCCS to pay the balance of St. Joseph's charges. From that judgment, AHCCCS and MCHP both appeal.

DISCUSSION

As a preliminary matter, we accept, as the superior court should have accepted, the administrative finding that St. Joseph's provided only the name "Sanchez" in its initial call to AHCCCS. The superior court lacked any proper basis to substitute its judgment for the agency's on this pure issue of fact. "In appeals taken under the Administrative Review Act, neither this court nor the superior court weighs the evidence." Havasu Heights Ranch and Dev. Corp. v. Desert Valley Wood Prod., Inc., 167 Ariz. 383, 387, 807 P.2d 1119, 1123 (App.1990). Here, the superior court did just that.

We will affirm the superior court's judgment, however, if it is correct for any reason. See City of Phoenix v. Geyler, 144 Ariz. 323, 330, 697 P.2d 1073, 1080 (1985). We therefore examine the agency's evaluation of the fact that, because of inaccuracies in the AHCCCS records, it would have made no difference for St. Joseph's to provide the full name "Luera Sanchez."

We begin by observing that the agency had discretion to excuse St. Joseph's flawed effort to give timely notice of its patient's name. The AHCCCS notice rule provides:

[N]onproviders furnishing emergency services to members who are enrolled with a prepaid capitated contract provider must notify the...