PHOENIX (CN) – Arizona is using its Medicaid program unconstitutionally to place liens against recipients of medical care benefits, according to a state class action.
The class claims Arizona made “erroneous, false, mistaken and/or fraudulent statements and representations of fact and law” to Medicaid recipients, including that the state may “assert a lien and collect monies from all funds a recipient recovers against a third-party, without any limitations or restrictions.”
Arizona calls its Medicaid program the Arizona Health Care Cost Containment System. It serves 1 million to 1.5 million Arizonans, “of which a significant number of recipients are citizens who receive acute and continuing medical care,” according to the complaint in Maricopa County Court.
Under federal law, AHCCCS’s right of limited recovery “can only be asserted against the third-party that may have caused the harm giving rise to the payment of medical treatment,” according to the complaint.
But the state told Medicaid recipients that it was entitled to “a portion of all sums a recipient has collected or may collect from a third-party tortfeasor, without any limitations or restrictions,” according to the complaint.
AHCCCS is limited under federal law to recovery of money paid for medical services “based upon a discrete formula applied to a discrete portion of the funds a recipient may obtain from a third-party tortfeasor,” the class claims.
But they says that AHCCCS “obtained and retained money that should have been paid over to the plaintiffs” when it collected a percentage of the insured parties’ “third-party recovery without drawing any mathematical distinction between the sums recovered for past medical expenses and sums recovered for all other losses.” Federal law prevents the program from pursuing recovery against its recipients, the three named plaintiffs say.
Lead plaintiff Ashleigh Turner-Justice says that class members did not know that money had wrongfully been taken from them because AHCCCS “concealed the facts giving rise to these causes of action in the past, and it continues to do so presently, by making representations that it is entitled to assert a lien against sums of money recovered by the plaintiffs from third-parties to which it is not entitled to make a claim.”
The class includes “Medicaid recipients who have paid the defendant sums in excess of what the defendant is entitled to recover and/or recipients who are currently being requested to pay sums in excess of what the defendant is entitled to recover via the law, and that the conduct of the defendant AHCCCS had prevented these plaintiffs from learning of facts that would cause them to know that they had suffered a cognizable injury.”
Turner-Justice says AHCCCS demanded that she reimburse it “the full amount of money it paid for medial expenses to date” after it learned she received a financial settlement from a third-party after spinal cord injury.
The class seeks declaratory judgment, compensatory damages and costs. It is represented by Larry Cohen and Jo Ann Niemi with the Anapol Schwartz Law Firm of Scottsdale.