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Administrative – Medicaid – Reimbursement – Ambulance/Emergency Services – Rates



Healthkeepers Inc. v. Richmond Ambulance Authority. (Lawyers Weekly No. 001-081-11, 15 pp.) (Gregory, J.) No. 10-1508, April 25, 2011; USDC at Richmond, Va. (Spencer, J.) 4th Cir. Click here for the full text of the opinion.

Holding: In this Medicaid reimbursement case, the 4th Circuit holds that ambulance services are “emergency services” under 42 U.S.C. § 1396u, and defendant Richmond Ambulance Authority is not entitled to set its own rates for the ambulance services it provides members of plaintiff Healthkeepers’ Medicaid program.

This dispute concerns what rate Healthkeepers must pay the Authority when the Authority provides emergency transportation services to Healthkeepers’ Medicaid enrollees. Healthkeepers is a private, for-profit corporation that operates as a commercial HMO (health maintenance organization) as well as an MCO (managed care organization). In Virginia, it offers a managed care plan to Medicaid-eligible persons under a contract between Healthkeepers and the Department of Medical Assistance.

Since a 2001 state court ruling, Healthkeepers has been paying the Authority’s rates for services rendered by the Authority to Healthkeepers’ Medicaid-eligible enrollees.

The central question here is how, if at all, the 2007 Medicaid Amendments affect the requirement that Healthkeepers continue to pay the Authority’s rates. When Healthkeepers filed a suit in federal court, seeking a declaratory judgment that the Medicaid Amendment covers the services the Authority provides to Healthkeepers’ Medicaid enrollees, the district court granted summary judgment in favor of the Authority. We reverse.

After finding that emergency services in § 1396u-2(b)(2)(D) is defined by § 1396u-2(b)(2)(B), we turn to whether the services provided by the Authority fit that definition.

The district court, relying in part on various dictionary definitions, determined that the plain meaning of “outpatient” services does not encompass ambulance services. We disagree and find that ambulance services are encompassed in the term outpatient emergency services. The term outpatient is not defined within the statute.

This court finds that the term “outpatient emergency services” encompasses patients being treated outside of the hospital as long as the medical provider and type of service fall within the definition of emergency services.

The services provided by the Authority go to the very heart of the language highlighted in a subsection of the definition. The Authority provides services necessary to evaluate or stabilize an emergency medical condition. Therefore, we find that outpatient services must encompass ambulance services. A contrary finding would require the Authority to seek pre-approval from Healthkeepers before rendering life saving emergency services in order to be reimbursed. This result is incongruous with the Balanced Budget Act of 1997 which sought to eliminate the need for pre-approval.

The plain meaning of the word outpatient and the structure of the statute support a finding in favor of Healthkeepers. The district court erred in granting summary judgment to the Authority and failing to grant summary judgment to Healthkeepers.

Reversed and remanded, with instructions to enter judgment for Healthkeepers.

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