Opposition Brief — St. Joseph's Hospital & Medical Center v. Maricopa County

5 eis *, Suprema Court, US

Nf } K }

CZ) 41] TLEL

No. 89-1855 i JUN 26 199

TOSEPH F. SP AMO

L, JR.

i

~

CLERK

In The 1 Se an —

Supreme Court of the United States

October Term, 1989

ST. JOSEPH'S HOSPITAL AND MEDICAL CENTER,

Petitioner,

Vv.

MARICOPA COUNTY,

Respondent.

Opposition to Petition For

Writ of Certiorari

To The

Arizona Court of Appeals

Brief for Respondent

Gordon J. Goodnow, Jr.

Counsel of Record

Deputy County Attorney

Maricopa County Attorney's Office

First American Title Building

111 West Monroe, 16th Floor

Phoenix, Arizona 85003

(602) 262-8541

Counsel for Respondent

i

QUESTION PRESENTED

Whether Arizona State statutes and

regulations which Mandate that income and

resources of all members of the household

be counted to determine eligibility for

medical care at County expense constitute a

taking of a private hospital's property

without just compensation or a denial of

the hospital's right to due process.

ii

TABLE OF CONTENTS

Page

Question Presented . ; ‘ i

Table of Contents ° , ‘ ii

Table of Authorities ‘ ‘ iii

Statutes, Regulations and

Constititional Provisions ; 1

Statement of the Case ‘ ‘ 2

Summary of Argument . . . 6

Argument. ° . ° ° 9

I. The Provisions Of A.R.S.§

11-297(B) (2) Under Which Maricopa

County Denied St. Joseph's

Hospital's Claim, Do Not Create

An Unconstitutional Taking Of

Private Property Without Just

Compensation ° ° 10

II. There Was No Violation of

Due Process ‘ : ‘ 25

Conclusion J “ ‘ ‘ 28

Appendix . ‘ ; ‘ ° A-1

iii

TABLE OF AUTHORITIES

Cases: Page(s)

Armstrong, et al. v. United States

of America, 364 U.S. 40, 80 S.Ct.

1563, 4 L.Ed. 1554 (1960) ‘ 22

F.C.C. v. Florida Power Corp.,

480 U.S. 245 107, S.Ct. 1107, 94

L.Ed.2d 282 (1987). : . 22

Guerrero v. Copper Queen Hospital,

112 Ariz. 104, 537 P.2d 1329

(1975) ‘ ; ; ; ; 17,18

Penn Central Transportation Co.

v. City of New York, 438 U.S. 104,

98 S.Ct. 2646, 59 L.Ed.2d 631

(1978) ; . ; ; ; 14

Pennel et al. v. San Jose, et al.,

485 U.S. 1, 108 S.Ct. 849 99 L.Ed.

2d 1 (1988) . > . ‘ 21,25

St. Joseph's Hospital and Medical

Center v. Maricopa County, 130 Ariz.

239, 635 P.2d 527 (App. 1981) . 20

St. Joseph's Hospital and Medical

Center v. Maricopa County,163 Ariz.

132, 786 P.2d 983 (App. 1989) . 2

United States Department of

Agriculture, et al. v. Murry, et al.,

Sin Use. SOS, 93 S.Ct. 2832, 37

L.Ed.2d 767 (1973) . ° ° 9

Village of Belle Terre, et al. v.

Boraas, et al., 416 U.S. 1, 94 S.Ct.

1536, 39 L.Ed.2d 797 (1974) 8,26

Statutes:

11-291

11-297 ° :

11-297(B)(2) .

11-297.01 .

11-297.01(B) ;

Arizona Compilation of Rules

and Regulations:

R9-22-307 . ‘

iv

No: 89-1855

In The

Supreme Court of the United States

October Term, 1989

ST. JOSEPH'S HOSPITAL AND MEDICAL CENTER,

Petitioner,

Ve

MARICOPA COUNTY,

Respondent.

Opposition to Petition For

Writ of Certiorari

To The

Arizona Court of Appeals

Brief for Respondent

STATUTES, REGULATIONS AND

CONSTITUTIONAL PROVISIONS

In addition to the statutes and

constitutional provisions cited by the

Petitioner, other statutes and regulations

which the case involves are: Arizona

2

Revised Statutes Annotated (A.R.S) §§ 11-

291, 11-297.01 and Arizona Compilation of

Rules and Regulations (A.C.R.R.) R9-22-307.

Copies are attached in the appendix. In

addition, copies of A.R.S. § 11-297,

defining indigency, and the case at bar,

St. Joseph's Hospital v. Maricopa ;

County, 163 Ariz. 132, 786 P.2d 983

(App. 1989), are attached.

STATEMENT OF THE CASE

This case basically involves a

complaint about eligibility guidelines for

free indigent health care benefits at

government expense. The complaining party,

however, is not the patient, who was found

to be ineligible, but the private hospital

-which treated him for nearly two months and

sought to be paid by Maricopa County for

treatment rendered to the ineligible

patient, under the legal fiction that all

of his care was "“emergency" care. The

ieee

3

patient, Donald Neu, had been suffering

from terminal cancer. He had been

hospitalized previously at St. Joseph's

Hospital as well.

St. Joseph's Hospital argued that Mr.

Neu was a legally defined indigent, and

therefore was eligible for free medical

care under emergency circumstances pursuant

to A.R.S. § 11-297.01 (see appendix).

According to A.R.S. § 11-297(B)(2)' (see

appendix), an "indigent" was a person who

had no more than $3,333.00 annual income

(husband and wife) and who:

does not have resources of all

persons in the household,

including but not limited to

equity in a house or car, with a

net worth in excess of thirty-

thousand dollars, with no more

than five-thousand dollars cash

or other liquid assets.

In the case of the patient's

household, it was undisputed that the

' Now amended.

4

household owned resources which were vastly

in excess of the resource limits. These

included part ownership of a shopping

center, a home with equity several times

the total allowable limit, clear title toa

Cadillac, a jeep, a truck, a house trailer

and a joint checking account containing

$1,200.00. The patient, Mr. Neu, claimed

that the bulk of this was his wife's

separate property, and that he was

indigent. The Neus married in 1971 and the

listed property was acquired thereafter.

The Neus continued to live together in one

household through the years from 1971 until

Mr. Neu's hospitalization. Because the Neu

household assets exceeded the statutory

limits for indigency, Maricopa County found

Mr. Neu ineligible for care at its expense.

St. Joseph's sued Maricopa under

A.R.S. § 11-297.01, seeking reimbursement

for care rendered to Mr. Neu over

rete Roads dw 0 hie

to ord

5

approximately a two month period. The

trial court granted summary judgment in

favor of Maricopa, finding that the Neus

were statutorily ineligible for care at

County ezpense. Division One, Department

"D" of the Arizona Court of Appeals

affirmed the trial court ruling, holding

that the statute which defines indigency,

A.R.S. § 11-297, rendered both Mr. Neu and

his wife ineligible based upon the

household's assets, which included Mrs.

Neu's separate property. The Court also

held that the statute, A.R.S. § 11-297,

does not violate due process and does not

constitute an unconstitutional taking of

property. Finally, the Court held that St.

Joseph's was not entitled to restitution

Since the County had no duty to provide

care in the first place. Only the

constitutional issues (taking of property

6

and due process) are pursued by the

Petitioner in this Court.

SUMMARY OF ARGUMENT

Respondent Maricopa County is required

by Arizona statutes (A.R.S. §§ 11-291, 297,

297.01 -- copies attached in appendix) to

provide free medical care to legally

defined indigents. "Indigents" are defined

by A.R.S. § 11-297(B)(2) as households

having income less than $3,333.00 per year,

for a married couple, and resources below

$30,000 in value.

The Neu household, consisting of the

patient and his wife, had resources well in

excess of $30,000. As noted above, this

included a partial interest in a shopping

center, an expensive home, three vehicles

with clear title, a trailer and a checking

account, among other things. Therefore,

under the terms of A.R.S. § 11-297(B) (2),

the Neu household fails to qualify as

a eee ca Taree

4

"indigent" and, therefore, Maricopa County

is not responsible for paying Mr. Neu's

hospital bill. The bill, totaling

approximately $50,000, was incurred over a

period of two months while Mr. Neu was

treated for cancer.

Even if Maricopa County were

responsible for Mr. Neu's care, as an

indigent, it would: sete-be liable for much.

if any, of his care at St. Joseph's, since

A.R.S. § 11-297.01(B) only requires payment———____

by a county for emergency care rendered to

a legally defined indigent.

There was no taking of private

property without just compensation. In

fact, there was no taking “whatsoever. The

hospital merely treated a patient and took

its chances on being paid, oe as

hospitals do each day when they accept

patients who are not eligible for indigent —

8

health care, or who do not have adequate

health insurance.

The Supreme Court, the Arizona Court

of Appeals and the Petitioner recognize

that lines must be drawn to determine

eligibility for social benefit programs.

Village of Belle Terre, et al. v. Borass,

oe ai., £16 U.S. 1, 94 3.Ce. 2336, 29

L.Ed.2d 797 (1974). That is simply what

the Arizona Legislature did in drafting

A.R.S. § 11-297(B)(2). The line was drawn

based upon a rational basis and for good

reasons. The Petitioner does not like

where it was drawn, since it does not allow

for payment of its. bill. However,

dissatisfaction with where the line is

drawn is different from suffering a taking

of property. There was no taking in this

case, nor was there a duty to treat or pay

for treatment to this middle class patient.

9

Likewise, there was no violation of

due process. The statute and administra-

tive regulations are designed ffor a

rational purpose and they are permissible.

Line-drawing for social benefits and the

use of the category of "households" are

widely accepted concepts in a large number

of local, state and federal benefit

programs. United States Department of

Agriculture, et al. v. Murry, et al., 413

U.S. 508, 93 S.Ct. 2832, 37 L.Ed.2d 767

(1973).

There are no constitutional bases for

granting a Petition for Certiorari.

Consequently, the petition should be

denied. }

ARGUMENT

The Petitioner bases its request for

review on two grounds, taking of private

property and due process. These grounds

are discussed below. Based upon the

10

discussion which follows, Responde: ~

Maricopa County asserts that the petition

should be denied.

I. The Provisions Of A.R.S.

Maricopa County Denied st.

Joseph's Hospital's Claim, Do Not

Create An Unconstitutional Taking

Of Private Property Without Just

Compensation.

The Petitioner, St. Joseph's Hospital

(St. Joseph's), asserts at page four of its

petition that it is not challenging the

eligibility standards themselves. Nor does

it object to the general concept of

"drawing a line" where a patient qualifies

or is ineligible for care at County

expense. Yet it is these same statutory

eligibility guidelines in A.R.S. § 11-

297(B)(2) and regulatory guidelines in

A.C.R.R. R9-22-307 (see appendix) that

clearly exclude the Neus from eligibility.

Therefore, it is incorrect to state that

_— ,

a3

the Petitioner is not attacking the actual

eligibility standards.

St. Joseph's dbnoterines the Arizona

statutory eligibility standards as if they

were somehow designed with Donald Neu

specifically in mind, in order to determine

him ineligible for care at Maricopa

County's expense and to deny the hospital

its rightful payment of his bill. The

reality is the opposite, however. The

Legislature of the State of Arizona, and

the Arizona Department of Health Services,

through administrative regulations, created

a number of criteria for determining

whether patients qualified as legally

indigent or not. One of these criteria was

whether or not a "household" earned a

certain amount of income or possessed a

certain level of resources. A.R.S. § 11-

297(B)(2). In the case of Donald Neu, his

wife's claimed separate property made the

12

household's income and resources well in

excess of the allowable eligibility limit,

where the Legislature decided to draw the

line. The same would have resulted had

Donald Neu owned separate property, or had

Mr. and Mrs. Neu owned all of the resources

which they possessed on an equal basis;

both of them (the household) would have

been ineligible since they were not

indigent. They were not indigent under

statute (A.R.S. § 11-297), nor were they

indigent in fact.

On the other hand, had the totality of

the household's income and resources met

the statutory standards, it would not have

mattered whether the income and resources

were separate or community property, nor

would it matter if one person in the

household earned all of the money or held

all of the property. What matters under

the eligibility statute is the amount held

13

by the household, not who earns it or

controls it.

St. Joseph's characterizes the Neu

family's ineligibility for having excess

assets at page five as a presumption that

Mr. Neu was "able to pay the hospital on

the basis of property he did not own and

could not control, and which was legally

beyond the reach of St. Joseph's." This

inaccurately slants the facts to suit the

hospital. Donald Neu was not eligible.

Neither was his wife. The household had

Clear title to several vehicles’ and

recreational items like a trailer, as well

as an expensive house and aé_=e shopping

center. These are not the kind of people

(the "poorest of the poor") that the

Legislature had in mind to pay for when it

adopted A.R.S. § 11-297 and its income

limits ($3,300.00 annual married couple's

income) and asset limits ($30,000.00).

14

St. Joseph's cites Penn Central

Transportation Co. v. City of New York, 438

U.S. 104, 98 S.Ct. 2646, 59 L.Ed.2d 631

(1978), at page four of the petition, for

the proposition that there is no single

"set formula" for determining when justice

and fairness call for government payment

for economic injuries. Obviously, the

analysis depends on the particular

circumstances in each case. Clearly the

circumstances in the case of the Neus do

not mandate taxpayer payment of a medical

bill incurred over two months by an upper

middle class or higher economic class

family.

The Supreme Court in Penn Central,

supra at 59 L.Ed. 648, stated:

A “taking” may more readily be

found when the interference with

property can be characterized as

physical invasion by government

{citations omitted] than when

interference arises from some

public program adjusting the

WRB BING wie PY on

15

benefits and burdens of economic

life to promote the common good.

The Court held that there was no

taking of property when the New York City

landmarks law barred Grand Central Station

Terminal from building a high-rise over the

terminal. Likewise, there was no taking in

the case at bar, as the Court of Appeals

for the State of Arizona has ruled.

St. Joseph's Hospital, as a "non-

profit" institution seems unusually

preoccupied with its finances. Yet the

fact that the Legislature allows private

hospitals to operate as "non-profit"

corporations, with preferential tax

treatment is another policy line that the

Legislature claims to draw between profit

making businesses, which are held to one

standard, and not for-profit businesses

that are held to another. The fact that

private hospitals are required to treat

certain low income people who are not poor

16

enough to qualify for care at government

expense is merely one of the conditions

that goes with the otherwise favorable

treatment they receive.

St. Joseph's complains at page three

that the Court of Appeals was in error at

pages 8-9 of its opinion when it spoke of

the rational basis for the Legislature

including a spouse's separate property ina

household's’ property. Yet the Court

recognized at page eight that:

In some cases, spouses will no

doubt decline to pay. It is not,

however, irrational that the

Legislature expect that those

possessing sufficient separate

assets will voluntarily pay for a

spouse's necessary medical care.

The system St. Joseph's proposes

-- that separate assets be

excluded -- would create an

economic disincentive for those

with adequate assets to provide

for the health needs of an

indigent spouse. This,

apparently, is not the policy the

Legislature has chosen to adopt.

The Court also noted at page six of

the opinion that the Legislature recently

17

amended the statute in question to exclude

the first $75,000.00 of a spouse's separate

property from the indigency calculation:

From this action, we can infer

that the Legislature was aware of

the County's policy to include

all separate property in the

calculation.

* ” *

- ». « the Legislature now clearly

requires that a spouse's separate

property -- albeit only that

which exceeds $75,000.00 -- be

included in the indigency

calculation. The Legislature was

obviously aware of community

property principles when it first

enacted § 11-297(B) (2). i. as

intended community property

principles to temper the

eligibility calculation, it could

have expressly done _ so, as

evidenced by the recent

amendment.

St. Joseph's makes much of a presumed

distinction between emergency and elective

care arguing that it can exclude non-paying

patients in the latter case, but that it

must treat patients in the former case

under the doctrine of Guerrero v. Copper

18

Queen Hospital, 112 Ariz. 104, 537 P.2d

1329 (1975). Maricopa County will ignore,

for the moment, the question of how a two-

month long hospital stay, followed by a

discharge home, can all be emergency care.

Beyond this, for all emergency patients

whose income ($2,500.00 single; $3,330.00

married) or sacets ($30,000.00) exceed the

eligibility limits, private hospitals will

still be required to treat these low income

people with no real expectation of

recovering their costs. Therefore, the

distinction between the two classes is not

that great in reality. It is puzzling to

say that an emergency patient with

indigency-qualifying resources of

$29,999.00 is not involved in a taking,

while a similar patient with $30,001

dollars in resources also is not involvea

in a taking. Under Guerrero v. Copper Queen

Hospital, supra, St. Joseph's would be

19

compelled to treat both patients without

regard to their ability to pay. Yet in the

first case, the County would only be

required to pay a reduced or discounted

amount by statue (A.R.S. § 11-297; see

appendix)’, whereas in the second case the

patient alone would be responsible for

payment of his or her bill and would most

probably be unable to pay even a portion of

it. Either way, the hospital does not

receive its full fee. Yet St. Joseph's is

apparently untroubled by that "line

drawing," but is upset at the well-off Neus

being deiied eligibility.

st. Joseph's states, inaccurately,

that "the Court of Appeals has previously

recognized the validity of the hospital's

‘ In 's Hospital v. Maricopa

County, 138 Ariz. 127, 673 P.2d 325 (App.

1983), Judge Kleinschmidt, writing for the

Court of Appeals, rejected St. Joseph's

statutory interpretation that the hospital

was entitled to its full billed rates,

rather than the statutorily reduced rate.

20

taking argument," citing St. Joseph's

Hospital and Medical Center v. Maricopa

County, 130 Ariz. 239, 635 P.2d 527 (App.

1981). The hospital admits that then-Judge

O'Connor, writing for the Court, found no

taking with reduced statutory payment to

hospitals. Yet it goes on to create the

incorrect impression that the Court somehow

implied that there was a taking under the

circumstances described by the hospital in

the instant case. This was not the case.

In fact, the case at bar is the first of

the line of hospital suits against

Arizona's counties to rule on the

constitutional taking issue, to the

knowledge of Maricopa County. The passage

referred to by St. Joseph's is dicta

contained in a discussion of a

Massachusetts case. It is not applicable

here. 7

21

St. Joseph*s—atso=etites—Pennell, er

al. v. San Jose, et al., 485 U.S. 1, 108

S.Ct. 849 99 L.Ed.2d 1 (1988). However,

the holding of that—case supports Maricopa

County's position. The Supreme-Court ruled

that the city's rent control ordinance was

not facially unconstitutional. The

ordinance had a “hardship to tenant"

provision which affected whether a landlord

could raise rent. The Court held that it

was premature to find any taking, but that

the ordinance did not violate the due

process or equal protection clauses on its

face. Moreover, the Court held that, in

takings cases particularly, consti-

tutionality of statutes should only be

decided based upon the actual factual

circumstances of each case. Finally, the

Court held that "statutes regulating the

economic relations of landlords and tenants

are not per se takings," Pennell, supra, at

22

pages 854-858, quoting F.C.c. v. Florida

Pow Corp., 480 U.S. 245 107, S.Ct. 1107,

94 L.Ed.2d 282 (1987). Furthermore, the

Court stated at pages 857-858:

We have consistently affirmed

that states have broad power to

regulate housing conditions in

general and the landlord-tenant

relationship in particular

without paying compensation for

all economic injuries that such

regulation entails. (Citing

Loretto v. Teleprompter Manhattan

CATV. Corp., 458 U.S. 419, 102

S.Ct. 3164, 73 L.Ed.2d 868

(1982)).

The Petitioner cites Armstrong, et al.

v. United States of America, 364 U.S. 40,

80 S.Ct. 1563, 4 L.Ed. 1554 (1960). a

case involves a contractor for boats ina

contract with the U.S. government. The

Supreme Court held that materialmen had a

lien on the boat hulls and had a

compensable property interest.

However, while holding that there was

a taking of liens, the Court also held at

80 S.Ct. 1568 that:

23

It is true that not every

destruction or injury to property

by governmental action has been

held to be a "taking" in the

constitutional sense. Omnia

Commercial Co. v. United States,

261 U.S. 502, 508-510, 43 S.Ct.

437, 67 L.Ed. 773 (1960).

The Court distinguished at page 1569

between a compensable taking and a mere

"consequential incidence" of ae valid

regulatory measure. Finally, Justices

Harlan, Frankfurter and Clark dissented,

finding no taking.

As the Court of Appeals correctly

stated at pages 9-10 of the opinion before

this Court:

In reality, St. Joseph's claim is

that the indigency calculation

together with the requirement

that the hospital must treat all

emergency patients constitutes a

taking. The logical extension of

this argument, as the County

points out, is that anytime the

hospital is unable to collect on

its emergency bill the County (or

State) must pay. (Emphasis

added).

24

The Court of Appeals stated at page

twelve, “obviously, these regulations are

not tantamount to a complete condemnation

of the hospital." Furthermore, it noted at

page eleven that:

The State's interest in the

indigency calculation also is

legitimate. As discussed earlier

in this opinion, the Legislature

must "draw lines" in order to

allocate scarce resources.

Indeed, the Court notes at page

thirteen:

Here the regulations fall far

short of that which is

traditionally considered an

unconstitutional taking. The

State has not "invaded" the

hospital but has simply required

hospitals, as a condition of

doing business in Arizona, to

accept patients without regard to

their ability to pay. The State

or County will reimburse the

hospital for the care extended to

qualified indigents. For all

patients who do not qualify as

indigent, the hospital must look

to the patient for reimbursement.

Based upon the foregoing, the Court of

Appeals was correct in its interpretation

23

of the law, finding that no taking

occurred.

II. There Was No Violation Of

Due Process.

So long as they are rationally related

to a legitimate state interest, economic

regulations are acceptable, Pennell, et al.

¥. 236 22 Seas Jeaee. of a)... 665 U.6. 1,

108 S.Ct. 849 99 L.Ed.2d 1 (1988).

The Court of Appeals for the State of

Arizona held in this case at 786 P.2d 986-

987:

We cannot agree that including

a spouse's separate property as a

legislative exercise in line-

drawing lacks sufficient

rationality to satisfy the

requirements of due process. St.

Joseph's argues that the

inclusion of separate property

creates an irrebuttable and

irrational presumption that an

indigent whose household assets

exceed the limit can afford

health care. In some cases,

spouses will no doubt decline to

pay. It is not, however,

irrational that the legislature

expect that those possessing

sufficient separate assets will

voluntarily pay for a spouse's

necessary medical care the system

26

St. Joseph's proposes -- that

separate assets be excluded --

would create a disincentive for

those with adequate assets to

provide for the health needs of

an indigent spouse. This,

apparently, is not the policy the

legislature has chosen to adopt.

The reasoning of the U.S. Supreme

Court when speaking of equal protection is

equally applicable to due process. Village

of Belle Terre, et al. v. Boraas, et al.,

416 U.S. 1, 94 &.Ct. 1536, 39 L.Ed.2d 797

(1974):

We deal with economic and social

legislation where legislatures

have historically drawn lines

which we respect against the

charge of violation of the Equal

Protection Clause if the law be

" 'reasonable, not arbitrary’ "

(quoting F.S. Royster Guano Co.

v¥. Virginia, 253 U.S. 412, 415,

40 S.Ct. 560, 561, 64 L.Ed. 989)

and bears "a rational relation-

ship to a [permissible] state

objective." Reed v. Reed, 404

0.8. 33, 76, Be Geet. Zoek. 354,

30 L.Ed.2d 225.

It is said, however, that if two

unmarried people can constitute a

"family," there is no reason why

three or four may not. But every

line drawn by a legislature

27

leaves some out that might well

have been’ included.? That

exercise of discretion, however,

is a legislative, not a judicial,

function. 416 U.S. at 1540.

Just as the Legislature decided to

give St. Joseph's certain tax advantages as

a non-profit corporation, it also decided

to "draw the line" at a certain level of

resources for a household that would

qualify or disqualify its members from

eligibility. This has been done by the

3 Mr. Justice Holmes made the point a

half century ago. "When a legal distinction

is determined, as no one doubts that it may

be, between night and day, childhood and

maturity, or any other extremes, a point

has to be fixed or a line has to be drawn,

or gradually picked out by successive

decisions, to mark where the change takes

place. Looked at by itself without regard

to the necessity behind it the line or

point seems arbitrary. It might as well or

nearly as well be a little more to one side

or the other. But when it is seen that a

line or point there must be, and that there

is no mathematical or logical way of fixing

it precisely, the decision of the

legislature must be accepted unless we can

say that it is very wide of any reasonable

mark." Louisville Gas & Electric Co. v.

Coleman, 277 U.S. 32, 41, 48 S.Ct. 423, 72

L.Ed.770 (dissenting opinion).

28

Legislature, as is its right. ac.

Joseph's

is unhappy with the result, its

remedy is through the Legislature, not the

Courts.

For

Maricopa

Petition

CONCLUSION

the reasons set forth above,

urges the Court to deny the

for Certiorari filed by St.

Joseph's Hospital.

June 22,

Respectfully submitted,

Maricopa Coynty Attorney's Office

Counsel of Record

Deputy County Attorney

First American Title Building

111 West Monroe, 16th Floor

Phoenix, Arizona 85003

Counsel for Respondent

1990

APPENDIX

—- . mat So oe Le ee ee ae)

OPINION BELOW

|

| wo. 1

St. Joseph's Hospital | CA-CIV 88-047

and Medical Center, | Court of Appeals

an Arizona corporation | of Arizona

Plaintiff-Appellant, | Division l,

| Department D.

| Sept. 7, 1989.

| Review Denied

|

|

|

!

Feb. 26, 1990

Vv.

Maricopa County, a

body politic,

Defendant~-Appellee.

Gammage & Burnham

by Richard B. Burnhan, Curtis Ullman and

Tracey L. Fletcher, Phoenix,

for plaintiff-appellant.

Richard E. Romley,

Maricopa County Atty.

by Gordon J. Goodnow, Jr.,

Deputy County Atty., Phoenix,

for defendant~appellee.

OPINION

SHELLEY, Judge.

This case deals with the statute that

defines indigency for purposes of public

health assistance. We hold that the

statute must be construed to render a

patient ineligible for public assistance if

his spouse owns separate property that

exceeds the maximum set by the statute. We

also hold that the statute, so construed,

does not offend due process and does not

work an unconstitutional taking of

property.

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BACKGROUND

Donald Neu was admitted as an emer-

gency patient to St. Joseph's Hospital and

Medical Center in April of 1985, and he

remained hospitalized there for almost two

months, incurring charges of over $50,000,

of which he paid only a small part. St.

Joseph's sought reimbursement of most of

the balance due from Maricopa County, and

the county refused to pay, claiming that

Neu was not eligible for assistance.

For the purposes of this appeal,

eligibility for county health care is

determined under the version of A.R.S. §

11-297(B)(2) that was in effect in 1985.

An indigent was then defined as a resident

of the county whose income does not exceed

a specific level, and

[djoes not have resources of all

persons in the household, in-

cluding but not limited to equity

in a house or car, with a net

worth in excess of thirty

thousand dollars, with no more

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than five thousand dollars cash

or other liquid assets.

A.R.S. § 11-297(B)(2) (1985 Ariz.Sess.Laws

ch.316, § 5).'

Donald Neu's assets at the time of his

hospitalization totaled substantially less

than $30,000. His wife owned, as her sole

and separate property, the home in which

they lived, a part interest in a shopping

center, and some automobiles. Because the

value of Mrs. Neu's separate property

exceeded the statutory maximun, Maricopa

County determined that Donald Neu was not

'A.R.S. § 11-297(b)(2) has been

subsequently amended, increasing the

limitation on resources from $30,000 to

$50,000. 1986 Ariz.Sess.Laws ch. 380 § 2.

The statute was again amended to add:

For an individual applicant who is married,

any separate property of the applicant's

spouse that does not exceed seventy-five

thousand dollars shall not be included in

determining the net worth of resources of

the applicant. 1988 Ariz.Sess.Laws ch. 3, §

1. All textual references to A.R.S. § 11-

297(B) (2) are to the 1985 version, unless

otherwise noted.

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_—_—

"indigent" and was therefore not eligible

for county health services. Maricopa

County denied St. Joseph's claim for

reimbursement of Donald Neu's

hospitalization charges.

St. Joseph's sued the county on its

claim, and the trial court, agreeing with

the county's position, granted summary

judgment in its favor.

On appeal, we consider the following

questions:

A. Statutory Interpretation:

Whether the separate property of

a spouse can be considered in

determining an individual's

indigency pursuant to A.R.S. §

11-297 (B) (2);

B. Due Process: Whether A.R.S. §

11-297(B)(2) is arbitrary and

denies Donald Neu and ie St.

Joseph's due process;

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Se Unconstitutional Taking:

Whether Maricopa County's failure

to reimburse St. Joseph's for

emergency services is an

unconstitutional taking of pri-

vate property without just com-

pensation; and

D. Restitution: Whether St.

Joseph's is entitled to recover

from Maricopa County for services

rendered under a theory of

restitution.

We decide each of these issues in favor of

Maricopa County.

THE SEPARATE PROPERTY OF A SPOUSE MAY

BE CONSIDERED IN DETERMINING INDIGENCY

The parties agree that the medical

expenses of a spouse are not collectable

out of the separate property of the other

spouse. Donald Neu's medical expenses were

payable only out of the community income

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‘and assets and Donald's separate property.

For the purpose of this opinion, we accept

that as the law.°

To be eligible for county health care

benefits, a person must have income below a

specified level and may not have "resources

of all persons in the household" in excess

of $30,000 with not more than $5,000 in

cash or other liquid assets. A.R.S. § 1l-

297(B) (2). hocexdine to St. Joseph's,

Arizona community property principles and

public policy require that the phrase

"resources of all persons in the household"

in § 11-297(B)(2) be construed to include

only assets actually available to the

patient or his creditors. So construed,

*We note that in California, a spouse's

separate property may be reached to satisfy

debts incurred for the other spouse's

"necessaries of life." Cal.Civ.Code

5120.140(a) (1) (West Supp. 1989); In re

Higgason's Marriage, 110 Cal.Rptr. 897, 10

Cal.3d 476, 516 P.2d 289 (1973). There is

no comparable civil statute in Arizona.

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the statute would require the county to

reimburse the hospital for Neu's care.

(1] Eligibility statutes, the hospital

argues, must be liberally construed with

the dual purposes of delivering health care

to tho;e who cannot afford it and

protecting a private hospital's right to

receive reimbursement from the county. It

cites a number of Arizona decisions for

this premise. Although we acknowledge the

underlying principle, none of the cases

cited offer specific guidance in determin-

ing whether "resources of the household"

must be construed to exclude a spouse's

separate property when the plain language

of A.R.S. § 11-297(B)(2) states otherwise.

‘Fi St. Joseph's also cites cases

from other jurisdictions for the

proposition that welfare statutes or regu-

lations cannot preempt community property

principles. See Harper v. New Mexico Dept.

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of Human Services, 95 N.M. 471, 623 P.2d

985 (1980); Duran v. New Mexico Dept. of

Human Services, 95 N.M. 196, 619 P.2d 1240

, ne

(App.1980); see also Purser v. Rahm, 104

Wash.2d 159, 702 P.2d 1196 (1985), cert.

dismissed, 478 U.S. 1029, 107 S.Ct. 8, 92

L.Ed.2d 763 (1986), all holding that the

uniform federal regulation, which was meant

to apply to all states (both community and

non-community property), had to be

interpreted in the context of local law.

These decisions shed little light on how

the specific problem before us is to be

resolved. In this’ case, the same

legislature which has codified our com-

munity property law enacted A.R.S. § 11-

297.

St. Joseph's also cites Herrera v.

Health & Social Services, 92 N.M. 331, 587

P.2d 1342 (App.1978), which held that the

word “income," as used in New Mexico's

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eligibility statute, had to be interpreted

in light of that state's community property

law. The upshot was that since half the

patient's income belonged to his wife under

community property principles, he was under

the maximum limit to qualify for public

assistance. The problem is that in the

context of the New Mexico statute,

"income," was 2@ more ambiguous term than

the phrase, "resources of all persons in

the household," with which we deal here.

In our opinion, this phrase, "re-

sources of all persons in the household,"

unmistakably indicates an intent to include

a spouse's separate property. No

limitation of the type of resources --

separate or community -- is expressed in

the statute. To construe it otherwise

would require reading into the statute

something that the legislature did not put

there. This, we ought not do. City of

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Phoenix, v. Donofrio, 99 Ariz. 130, 133,

407 P.2d 91, 93 (1965).

As noted in footnote 1 to this opin-

ion, the legislature has recently amended

the relevant statute to exempt the first

$75,000 of the spouse's separate assets

from the indigency calculation. From this

action, we can infer that the legislature

was aware of the county's policy to include

all a property in the calculation.

The amendment does not reveal whether the

county's policy comported with the

legislature's intent under the old statute.

The amendment is either a liberalization of

the qualification guidelines, or a

restriction of it, depending on one's

viewpoint. In either case, the legislation

now clearly requires that a spouse's

separate property -- albeit only that which

exceeds $75,000 -- be included in the

indigency calculation. The legislature was

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obviously aware of community property

principles when it first enacted § 11-

297(B) (2). If it intended community

property principles to temper the eligi-

bility calculation, it could have expressly

done so, as_ evidenced by the recent

amendment.

THE STATUTE DOES NOT OFFEND

DUE PROCESS

We turn to St. Joseph's argument that

the statute, as we construe in he arbi-

trary, capricious, ahd violative of the due

process clauses of the state and federal

constitutions.

[3] Economic regulations need only be

rationally related to a legitimate state

interest. Arizona Downs v. Arizona

Horseman's Found, 130 Ariz. 550, 555, 637

P.2d 1053, 1058 (1981). See also Comment,

Economic Substantive Due Process in

Arizona; A Survey, 20 Ariz.St.L.J. 327

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(1988). St. Joseph's acknowledges this

well-settled principle but claims that the

inclusion of a spouse's separate property

in the indigency calculation is irrational.

We disagree.

[4]. As St. Joseph's acknowledges, the

legislature may and must draw financial

eligibility lines somewhere. Under current

eligibility criteria, a married couple can

earn no more than $3,333 per year to

qualify as_ indigent. This line is

necessarily arbitrary, and, we realize, not

realistically calculated to provide

adequate health care for any but the poor-

est of the poor. Those who make more than

$3,333 per year and cannot afford medical

care are simply on their own, except in one

respect -- if they present themselves at a

hospital for emergency treatment, they

cannot be turned away. See Thompson v. Sun

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City Comm. Hosp., 141 Ariz. 597, 602, 688

P.2d 605, 610 (1984).

As we have already observed, St. Jo-

seph's acknowledges that the legislature

must "draw the line somewhere." st. a

seph's admits that the county is not re-

quired to reimburse the hospital for those

emergency patients who do not qualify under

the basic indigency guidelines. However,

it, challenges a detail in the legislature's

drawing of the line when it contends that

the legislature so unreasonably narrows its

Prospects of reimbursement as to violate

due process when the legislature includes

within the calculation of household assets

available to the patient the separate

Property of the patient's spouse.

We cannot agree that including a

Spouse's separate property as a legislative

exercise in line-drawing lacks sufficient

rationality to satisfy the requirements of

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due process. St. Joseph's argues that the

inclusion of separate property creates an

irrebuttable and irrational presumption

that an indigent whose household assets

exceed the limit can afford health care.

In some cases, spouses will no doubt

decline to pay. It is not, however,

irrational that the legislature expect that

those possessing sufficient separate assets

will voluntarily pay for a_ spouse's

necessary medical care. The system St.

Joseph's proposes -- that separate assets

be excluded -- would create a disincentive

for those with adequate assets to provide

for the health needs of an indigent spouse.

This, apparently, is not the policy the

legislature has chosen to adopt.

We turn to St. Joseph's next argument,

that the system effects an unconstitutional

taking of its property without just

compensation.

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THE STATUTE IS NOT AN UNCONSTITUTIONAL

TAKING OF THE HOSPITAL'S PROPERTY

[5] St. Joseph's asserts that if a

patient's indigency is determined by

including the separate property of his

Spouse, which cannot be reached by a

private hospital for the payment of

hospital bills, the statute violates the

"taking" clauses of the state and federal

constitutions. it posits that the private

property taken was the use of its services,

facilities, and supplies, because, in

Arizona, hospitals must provide emergency

treatment regardless of the person's

ability to pay. Thompson, 141 Ariz. at

602, 688 P.2d at 610. We disagree.

In reality, St. Joseph's claim is that

the indigency calculation, together with

the requirement that the hospital must

treat all emergency patients, constitutes a

taking. The logical extension of this

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argument, as the county points out, is that

any time the hospital is unable to collect

on its emergency bill, the county (or

state) must pay. ‘St. Joseph's cites a

mischievous footnote in St. Joseph's

Hospital v. Maricopa County, 130 Ariz. 239,

635 P.2d 527 (App. 1981). That footnote

referred to the suggestion made by a

Massachusetts court in an earlier case,

that if a hospital were requested to accept

indigents and the public’ authorities

refused to pay, such might constitute a

taking. The suggestion was mere dicta.

Traditional eminent domain cases shed

some light on the question. The typical

eminent domain cane: invotwes the taking or

regulation of real property which

diminishes or destroys the value of that

property to the owner and provides a direct

benefit to the state. This case is

atypical because the benefit -- emergency

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health care -- inures to the patient

directly. The only fiscal benefit the

state enjoys is that it does not have to

pay for the patient's care, unless the

patient qualifies as indigent. There is

some authority for the proposition that the

government must pay for an unconstitutional

taking of the property, even if it is

another who derives the benefit. See Ivey

Vv. United States, 88 F.Supp. 6, 8

(E.D.Tenn. 1950). In any event, the

eminent domain analysis provided in

property-use-regulation cases will be our

guide.

As we stated in Corrigan v. City of

Scottsdale, 149 Ariz. 553, 720 P.2da 528

(App. 1985) aff'd in relevant part, 149

Ariz. 538, 720 P.2d 513 (1986):

There are no set formulas

for determining at which point a

regulation effects a taking of

property .. . Rather a two step

process is required. First, we

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must determine WwW e a

legitimate state interest is

substantially advanced by the

ordinance at issue... Second, we

focus on whether the ordinance

und ¢) t) icall

Ultimately the issue is whether

the public at large, rather than

a few landowners should bear the

burden of an exercise of police

power.

Id. 149 Ariz. at 560, 720 P.2d at 535

(citations omitted) (emphasis added). See

also Ranch 57 v. City of Yuma, 152 Ariz.

218, 225-26, 731 P.2d ai3, 120-21

(App.1986).

he Legitimate State Interest.

In this case, we deal with the

operation of two regulations that

purportedly effect a taking. The first is

a regulation developed by case law -- that

hospitals are required to accept emergency

patients without regard to their ability to

pay. We think it is beyond discussion that

this requirement advances a legitimate

state interest. As our supreme court state

in Thompson:

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‘If a person, seriously hurt,

applies for .. . aid at an

emergency ward .. . a refusal

might well result in worsening

the condition of the injured

person, because of the time lost

in a useless attempt to obtain

medical aid.'

_141 Ariz. at 602 n.3, 688 P.2d at 610 n.3

(citations omitted).

The state's interest in the indigency

calculation also is’ legitimate. As

discussed earlier in this opinion, the

legislature must "draw lines" in order to

allocate scarce re.ources. Including

separate property in a household's

resources for indigency purposes encourages

family members to. use their private

resources to pay for medical care rather

than allowing that burden to fall on public

coffers. Therefore, we answer the first

question posed in Corrigan affirmatively

and turn to the second prong.

Ze Denial of Economic Use.

Obviously, these regulations are not

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tantamount to a complete condemnation of

the hospital. The questions for the court

then is whether the regulation is so severe

as to deny the owner a reasonable economic

use of the property and whether, in justice

and fairness, the burden should fall on the

hospital or on the public as a whole. Penn

Central Transp. Co. v. City of New York,

438 U.S. 104, 123-24, 98 S.Ct. 2646, 2659,

57 L.Ed.2d 631, 648 (1978); Ranch 57, 152

Ariz. at 226-27, 731 P.2d at 121-22.

The Penn Central Court, noting that

this determination is essentially an ad hoc

factual inquiry, identified several

Significant factors. The first factor

mentioned in Penn Central is the economic

impact of the regulation on the plaintiff,

particularly the extent that the regulation

has interfered with the plaintiff's

"investment-backed expectations." a 438

U.S. at 123-24, 98 S.Ct. at 2659. We have

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absolutely nothing in the record to

indicate the extent to which’ these

regulations have effected St. Joseph's

profitability. We know that St. Joseph's

is unable to collect on the Neu account,

totaling $50,006.45. We do not ‘ai what

percentage of that figure is expected

profit, nor do we know the impact these

regulations have had on the hospital's

overall profitability. Presumably, these

"bad debts" are absorbed by the hospital as

a cost of doing business and are ultimately

passed on to the consumer. St. Joseph's

has not provided us- with adequate

information upon which we could determine

that it has suffered economic hardship

tantamount to an unconstitutional taking.

Bs Governmental Action.

Another factor mentioned in Penn

Central is the "character of the

governmental action." The Court explained:

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A 'taking' may more readily be

found when the interference with

property can be characterized as

a physical invasion by

government, . . . than when

interference arises from some

public program adjusting the

benefits and burdens of economic

life to promote the common good.

Id. (citation omitted). Here, the

regulations fall far short of that which is

traditionally considered an

unconstitutional taking. The state has not

"invaded" the hospital but has simply

required hospitals, as a condition of doing

business in Arizona, to accept emergency

patients without regard to their ability to

pay. The state or county will reimburse

the hospital for the care extended to

qualified indigents. For all patients who

do not qualify as indigent, the hospital

must look to the patient for reimbursement.

The regulation mandating emergency

care benefits the common good (not only the

poor or uninsured) because no one can be

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denied emergency care for failing to

provide .proof of insurance or credit

worthiness. The aspect of the regulation

that denies families county-funded health

care if one spouse possesses assets in

excess of the statutory limit also benefits

the common good, because it encourages

families to pay for services rendered for

family members rather than allowing that

burden to fall on state coffers.

Having reviewed the relevant factors,

we cannot find that, in the case of Donald

Neu, this regulatory scheme amounts to an

unconstitutional taking of the hospital's

property.

_ RESTITUTION

[6] As a final issue for appeal, St.

Joseph's contends it should be able to

collect from the county on a theory of

restitution. Appellant cites to sections

114 and 115 of the Restatement of

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Restitution in support of its theory. The

fatal flaw in appellant's argument is that

for the county to be liable for Donald

Neu's emergency care under a restitution

theory, it must have had a duty to provide

that care. St. Joseph's claims that the

county's duty arises from A.R. S. § 11-291,

which requires the county to provide

medical care to the indigents. As we have

determined earlier in this opinion, the

county had no duty to provide care for

Donald Neu, because he did not qualify as

an indigent. Because the county had no

duty, it is also not liable in restitution.

CONCLUSION

For the foregoing reasons, the

decision of the trial court is affirmed.

KLEINSCHMIDT, P.J., and FIDEL,

J., concur.

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ARTICLE 7. MEDICAL FACILITIES AND

Cc e) NDIGENTS

Cross References

Income tax deduction, nursing care

institution costs, see §43-1062. Income

tax exemption, maintaining person in

nursing or supervisory care institution,

see §43-1023.

§11-291. Hospitalization and medical care

of indigent sick.

Text oof section effective until

October 2, 1983.

A. Except as provided in §36-183.01

and title 36, chapter 29, the board of

supervisors has the sole and exclusive

authority to provide for the

hospitalization and medical care of the

indigent sick in the county, including

long-term care and home health services as

defined in §46-151, paragraph 3, to

indigent persons and indigent persons under

the supervision of a county corrections

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agency. Counties shall not be required to

provide services specified in title 36,

chapter 29 to persons eligible for care

under title 36, chapter 29 who meet all

requirements for such care. The board may

employ physicians and other’ persons

necessary to accomplish the purpose of this

section.

B. In carrying out the powers and

duties prescribed by §11-251, paragraph 5,

and subsection A of this section, the board

may contract with any qualified person to

provide all or a part of the services

required. Such contracts may be for a term

of not more than ten years. All contracts

for the operation of a county hospital for

a term of more than two years shall let to

the best responsible bidder after

advertising for sealed bids in a newspaper

andy by notice posted in three or more

public places in the County at least ten

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days before awarding the contract. The

board may reject any and all bids. Amended

by Laws 1981, 4th S.S., Ch. 1, §1; Laws

1982, Ch. 314, §; Laws 1982, Ch. 319, §1.

Section 36-2901 et seq.

For text of section effective October

2, 1982, see §11-291, post.

§11-291. Hospitalization and medical care

of indigent sick

Text of section effective October 2, 1983

A. Except as provided in §36-183.01

and title 36, chapter 29, the board of

supervisors has the sole and exclusive

authority to provide for the

hospitalization and medical care of the

indigent sick in the county, including

long-term care and home health services as

defined in §36-151, paragraph 3, to

indigent persons and indigent persons under

the supervision of a county corrections

agency. Counties shall not be required to

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provide services specified in title 36,

chapter 29 to persons eligible for care

under title 36, chapter 29 after the

persons have been determined eligible

pursuant to the county eligibility

provided. Except as provided in §§ 36-2908

and 36-2909, until the final eligibility

determination has been made and all

applicable notice provisions have been

complied with, the county shall provide

services for indigent persons who are in

fact eligible for care as required by Laws

1981, 4th special session, chapter 1, §16.

A county may condition the provision of

nonemergency care to a person who is

otherwise eligible for county services on

the completion by the person, or by a

representative of the person on his behalf,

of an application for eligibility for the

Arizona health care cost containment system

pursuant to title 36, chapter 29. The

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board may employ physicians and other

persons necessary to accomplish the purpose

of this section.

B. In carrying out the powers and

duties prescribed by §11-251, paragraph 5,

and subsection A of this section, the board

may contract with any qualified person to

provide all or a part of the services

required. Such contracts may be for a term

of not more than ten years. All contracts

for the operation of a county hospital for

a term of more than two years shall be let

to the best responsible bidder after

advertising for sealed bids in a newspaper

and by notice posted in three or more

public places in the county at least ten

days before awarding the contract. The

board may reject any and all bids. Amended

by Laws 1983, Ch. 304, §2, eff. Oct. 2,

1983. 1 Section 36-2901.

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For text of section effective until October

2, 1982, see §11-291, ante.

A-31

ARTICLE 7. MEDICAL FACILITIES AND

CARE OF INDIGENTS

Cross References

Income tax deduction, nursing care

institution costs, see §43-1062. Income

tax exemption, maintaining person in

nursing or supervisory care institution,

see §43-1023.

§11-291. Hospitalization and medical care

of indigent sick.

A. Except as provided in §36-183.01

and title 36, chapter 29,' the board of

Supervisors has the sole and exclusive

authority to provide for the

hospitalization and medical care of the

indigent sick in the county, including

long-term care and home health services as

defined in §36-151, paragraph 3, to

indigent persons and, to the extent that

such expenses are not covered by a third

party payor, to indigent persons under the

supervision of a county corrections agency.

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For the purposes of this subsection, "third

party payor" does not include the Arizona

health care cost containment system.

B. Counties shall not be required to

provide services specified in title 36,

chapter 29 to persons eligible for care

under title 36, chapter 29 after the

persons have been determined eligible

pursuant to the county eligibility process.

Except as provided in §§ 36-2908 and 36-

2909, until the final eligibility

determination has been made and all

applicable notice provisions have been

complied with, the county shall provide

services for indigent persons who are in

fact eligible for care as required by § 11-

291.01. A county may condition the

provision of nonemergency care to a person

who is otherwise eligible for county

services on the completion by the person,

or by a representative of the person on his

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behalf, of an application for eligibility

for the Arizona health’ care cost

containment system pursuant to title 36,

chapter 29. Beginning October 1, 1985, a

county shall determine whether a person is

eligible or ineligible for care provided

pursuant to § 11-291.01 no later than it

determines whether a person is eligible or

ineligible for care pursuant to title 36,

chapter 29.

c. The board may employ physicians

and other persons necessary to accomplish

the purpose of this section.

D. In carrying out the powers and

duties prescribed by section 11-251,

paragraph 5, and subsection A of this

section, the board may contract with any

qualified person to provide all or a part

of the services required. Such contracts

may be for a term of not more than ten

years. All contracts for the operation of

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a county hospital for a term of more than

two years shall be let to the best

responsible bidder after advertising for

sealed bids in a newspaper and by notice

posted in three or more public places in

the county at least ten days’ before

awarding the contract. The board may

reject any and all bids.

E. For purposes of this section

hospitals which render care to the indigent

sick shall be reimbursed by the board of

supervisors until October 1, 1987 as

prescribed in § 36-2903.01, subsection I or

J.

F. The county is entitled to a lien

for the charges for hospital or medical

care and treatment of an injured person for

which it is responsible pursuant’ to

subsection A of this section, on any and

all claims for damages accruing to the

person to whom hospital or medical service

A-35

is rendered, or to the legal representative

of such person, on account of injuries

giving rise to such claims and which

necessitated such hospital or medical care

and treatment. Recovery of charges

pursuant to this subsection shall be ina

manner as nearly as possible the same as

the procedures prescribed in § 36-2915.

G. Except as provided in §§ 36-2908

and 36-2909, the county shall reimburse an

ambulance company for the transportation to

a hospital of a person in a medical

emergency situation if that person's

medical care is a county responsibility

pursuant to § 11-291.01 and subsection A of

this section and if such transportation is

requested by a health care professional

licensed under the provisions of title 32,

chapter 13, 15, 17 or 25,* by a paramedic

or emergency medical technician certified

pursuant to title 36, chapter 21.1,° or by

A-36

a law enforcement officer or fire fighter.

The county shall reimburse the ambulance

company for services on a capped fee-for-

service basis not to ental the maximum

amount determined by the administration

pursuant to § 36-2904, subsection B.

Amended by Laws 1981, 4th S.S., Ch. 1, § 1;

Laws 1982, Ch. 314, § 1; Laws 1982, Ch.

319, § 1; May 5, 1984; Laws 1985, Ch. 316,

§ 1, eff. May 10, 1985.

1. Section 36-2901 et seq.

2. Section 32-1401 et seq., 32-1601 et

seq., 32-1801 et seq. or 32-2501 et seq.

3. Section 36-2201 et seq.

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Arizona Revised Statutes Annotated

11-297. Hospital treatment; application;

affidavit; indigency standards;

erroneous determinations;

definitions

A. Except in emergency cases when

immediate hospitalization or medical care

is necessary for the preservation of life

or limb no person shall be _ provided

hospitalization, medical care or outpatient

relief under this article without first

filing with the board or supervisors of the

county in which he resides a statement in

writing, subscribed and sworn to under

oath, that he is an indigent as defined by

subsection B of this section.

B. For the purposes of this section,

an "indigent" is a resident of the county

who:

1. Does not have an annual income in

excess of:

(a) Two thousand five hundred

dollars, for one individual.

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(b) An additional thirty-three and

one-third per cent of the base identified

in subdivision (a) of this paragraph if

living with a dependant member of the

family household, or if married and living

with a spouse.

(c) An additional seventeen percent

of the base identified in subdivision (a)

of this paragraph for each additional

dependent member of the family household.

Annual income shall be calculated by

multiplying by four the applicant's income

for the three months immediately prior to

the application for eligibility for the

Arizona health care cost containment system

pursuant to title 36, chapter 29.

2. Does not have resources of all

persons in the household, including but not

limited to equity in a house or car, with a

new worth in excess of thirty thousand

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dollars, with no more than five thousand

dollars cash or other liquid assets.

3. Has not, within three years prior

to filing an application for eligibility

for the Arizona health care cost

containment system pursuant to title 36,

chapter 29, transferred on real or

personal property with intent to render

himself eligible for such system.

C. For the purposes of subsection B

of this section, each applicant shall

provide a statement of the amount of

personal and real property in which the

applicant has an interest, a statement of

all income which the applicant received

during the three months immediately prior

to the application, and a statement of any

personal and real property assigned or

transferred by the applicant within a three

year period immediately prior to filing an

application for eligibility for the Arizona

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health care cost containment system

pursuant to title 36, chapter 29 and any

further information determined through

rules and regulations by the director of

the Arizona health care cost containment

system administration.

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A.R.S. § 11-297.01 -- Relevant portions of

the statute are identical to the statute

effective May 10, 1985 and in the previous

version.

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Arizona Revised Statutes Annotated

§ 11-297.01. Care at private or university

hospital

A. An indigent patient qualified for

care under the terms of this article may be

placed in a private hospital or hospital

operated by a university:

1. When the county does not maintain

a county hospital.

2. When the county hospital is too

overcrowded to accommodate the patient.

3. When the patient requires a

service provided by a private nospital or

hospital operated by a university that is

not provided by the county hospital.

B. Subject to the same reimbursement

level limitation as prescribed in § 36-

2903.01, subsection I or J, the county

shall be liable for payment of all costs

retroactive to the inception of treatment

incurred by a private hospital or hospital

operated by a university arising from

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emergency treatment and medical care

-administered at such hospital for a patient

qualified for such care and treatment under

the provisions of this article on

compliance with subsection cC of this

section and in either of the following

circumstances:

1. When the emergent condition of the

patient is such that is it deemed medically

inadvisable to transport the patient from

the private hospital or hospital operated

by a university for further treatment.

2. When the county does not move the

patient from the private hospital or

hospital operated by a university within

twelve hours after being notified by the

private hospital or hospital operated by a

university authorities of the location and

condition of the patient.

C. To be entitled to recover pursuant

to this section a private hospital or

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hospital operated by a university shall

give the county oral or written notice of

the location, name, address and condition

of the patient within twelve hours after

the time the patient is admitted for

treatment, unless the hospital demonstrates

that the patient or another person acting

on behalf of the patient submitted evidence

of insurance coverage to the hospital which

was later determined to be invalid for. the

purpose for which the patient was admitted

and the hospital documents in the patient's

records that evidence of insurance was

submitted. If a hospital fails to give

notice within the twelve hour period, the

hospital is entitled to payment from the

county for treatment which is rendered to

the patient from the time notice is

actually given to the county until the time

the patient is discharged or transferred to

ancther facility.

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Amended by Laws 1984,

May 5, 1984; Laws 1985,

May 10, 1985.

Ch.

Ch.

372,

316,

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Arizona Administrative Code

R9-22-307. AHCCCS family household and

relationship

A. For the purposes of AHCCCS, the

following individuals shall be included on

one AHCCCS application and_ shall be

considered one family household. Except as

indicated in B. and Cc. of this Section,

individuals listed below shall reside in

one common- residence. Categorically

eligible persons shall not be considered

part of the indigent or medically needy

family household.

1. All married couples, regardless of

age, living together without dependent

children.

2 All married couples, and their

natural or adoptive dependant children; all

natural and adoptive children of a natural

or adoptive dependent child(ren) of either

one or both spouses.

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$. A married individual, without

dependent children and not living with

spouse. Natural or adoptive parents or

specified relatives shall not be considered

part of this family household.

4. A married individual, not living

with his or her spouse; and, his or her

natural or adoptive dependent children and

any children of a natural or adoptive

dependent child. Natural or adoptive

parents or specified relatives shall not be

considered as part of this family

household.

5. A separated or divorced individual

without dependent children. Natural or

adoptive parents or specified relatives

shall not be considered as part of this

family household.

6. A divorced or separated

individual, and his or her natural or

adoptive dependent children and any

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children of a natural or adoptive dependent

child. Natural or adoptive parents or

specified relatives shall not be considered

as part of the family household.

7. An unmarried adult or emancipated

minor without any dependent children.

8. An unmarried adult(s) or

emancipated minor and his or her or their

natural or adoptive dependent children and

any children of the natural or adoptive

dependent child. Unmarried persons without

common dependent children shall be a

separate AHCCCS family household.

9. A specified relative and the

dependent children who live together in one

common residence. A dependent child shall

be considered on the application of the

specified relative.

B. A dependent child, absent from the

home because of Arizona school attendance

or because of residing in an Arizona

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residential facility due to a disabling

condition, shall be considered a member of

the family household unless the school or

facility is located out of state or the

dependent child is residing with the other

parent. If the child is residing with the

other parent, the child shall be included

on the application of the parent with whom

the child resides.

C. Spouses separated solely because

one is residing in a licensed nursing care

institution, licensed supervisory care

facility, or certified adult foster care

facility, because of a mental or physical

disabling condition verified by doctors

orders, shall apply together as one family

household on a single AHCCCS application.

D. A minor who is not emancipated or

expressly emancipated shall only be

approved for AHCCCS on an application

submitted by:

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1. Parents, or

2. Specified relative, or

3. Legal guardian, or

4. Authorized agency appointed

through court proceedings as established by

A.R.S. § 8-538, et seq.

E. Relationship of family household

members shall be established and verified

prior to the eligibility determination

according to requirements specified in R9-

22-327.

12/31/84 Supp. 84-6

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