Abbott v. Banner Health Network

239 Ariz. 409, 372 P.3d 933 (2016)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

Ds are health care providers who treated Ps injured by third parties. Ds were paid by Ps' insurer, the Arizona Health Care Cost Containment System (AHCCCS), which had negotiated reduced rates with the Hospitals. Ds then recorded liens against Ps pursuant to A.R.S. § 33-931 and A.R.S. § 36-2903.01(G) for the difference between the amount typically charged for their treatment and the reduced amount paid by AHCCCS. In order to receive their personal injury settlements with the third parties, Ps settled with Ds by paying negotiated amounts to release the liens. Ps did not settle with Ds and sued to set aside the accord and satisfaction agreements and to recover the amounts paid to release the liens. Ds moved to dismiss the complaint for failing to state a claim because the parties had reached an accord and satisfaction. Ps claimed that the accord and satisfaction agreements were unenforceable because they lacked a proper subject matter and consideration. They argued that federal law preempted the state law which authorized the liens. Ps claimed the agreements violated public policy, had an improper purpose, and lacked consideration. Ps claimed that Provider Participation Agreements between the Hospitals and AHCCCS required Ds to 'comply with all federal, State and local laws, regulations, standards, and executive orders governing the performance of duties under this Agreement' which prohibited the liens as 'balance billing.' The trial court concluded that the accord and satisfaction agreements were 'final and binding regardless of the validity of the underlying claims.' Ps appealed. The court of appeals held that the accord and satisfaction agreements were void because federal law preempts the Arizona laws allowing the liens, there was not a 'good faith dispute about the enforceability of the liens,' and the accord and satisfaction agreements lacked both proper subject matter and consideration. Ds appealed.