HMO 208799 (07/07/2023)
Recipient not liable for service denied prior authorization

DHA Case No. HMO 208799 (Wis. Div. of Hearings and Appeals July 7, 2023) (DHS) ↓ Download PDF

A Medicaid recipient cannot be held personally liable for a service requiring prior authorization unless he has notice of the prior authorization denial before provision of the service. In this unusual case with no findings of fact, the petitioner appealed after his Medicaid HMO denied a claim from a health care provider, concerned that he would be held liable for the bill. ALJ Brian Schneider noted, as a conclusion of law, that the petitioner could not be held liable.

Reading between the lines, I believe the issue is that a prior authorization was required and ultimately denied, but the provider went ahead with the procedure in the meantime.

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Preliminary Recitals

Pursuant to a petition filed May 17, 2023, under Wis. Stat., § 49.45(5)(a), to review a decision by the Division of Medicaid Services regarding Medical Assistance (MA), a hearing was scheduled on July 6, 2023, by telephone.

The issue for determination is whether petitioner can be held liable for medical bills under MA rules.



Petitioner’s Representative:
Atty. Garett T. Pankratz
Hale, Skemp, Hanson, Skemp & Sleik
PO Box 1927
La Crosse, WI 54602-1927

Department of Health Services
1 West Wilson Street, Room 651
Madison, WI 53703
By: Michelle Rocca
Division of Medicaid Services
PO Box 309
Madison, WI 53701-0309

Brian C. Schneider
Division of Hearings and Appeals


Petitioner is eligible for MA and receives benefits through the Anthem Blue Cross HMO. He filed this appeal after receiving a letter from the HMO informing him that a claim by Gunderson Medical Center for inpatient care was denied, to the extent of some $7,770. Petitioner filed this appeal with the concern that he would be held liable for the bill.

Two Wisconsin Administrative Code provisions apply here from §DHS 104.01(12):

(b) Freedom from having to pay for services covered by MA. Recipients may not be held liable by certified providers for covered services and items furnished under the MA program, except for copayments or deductibles under par. (a), if the patient identifies himself or herself as an MA recipient and shows the provider the MA identification card.

(c) Prior authorization of services. When a service must be authorized by the department in order to be covered, the recipient may not be held liable by the certified provider unless the prior authorization was denied by the department and the recipient was informed of the recipient’s personal liability before provision of the service. In that case the recipient may request a fair hearing. Negligence on the part of the certified provider in the prior authorization process shall not result in recipient liability.

I included subsection (c) because there was a suggestion that prior authorization was involved. Also important here is this subsection from §DHS 106.04:

(3) NON-LIABILITY OF RECIPIENTS. A provider shall accept payments made by the department in accordance with sub. (1) as payment in full for services provided a recipient. A provider may not attempt to impose a charge for an individual procedure or for overhead which is included in the reimbursement for services provided nor may the provider attempt to impose an unauthorized charge or receive payment from a recipient, relative or other person for services provided, or impose direct charges upon a recipient in lieu of obtaining payment under the program, except under any of the following conditions:

(a) A service desired, needed or requested by a recipient is not covered under the program or a prior authorization request is denied and the recipient is advised of this fact before receiving the service;

(b) An applicant is determined to be eligible retroactively under s. 49.46(1)(b), Stats., and a provider has billed the applicant directly for services rendered during the retroactive period, in which case the provider shall, upon notification of the recipient’s retroactive eligibility, submit claims under this section for covered services provided during the retroactive period…; or

(c) A recipient in a nursing home chooses a private room in the nursing home and the provisions of s. DHS 107.09(4)(k) are met.

The upshot of the above is that, regardless of the dispute between the HMO and Gunderson, petitioner himself cannot be billed for or be found liable for payment of the disputed bill. I will dismiss the appeal because, as of this date, Gunderson has not billed petitioner for the services, so there is nothing for me to order. I will note that petitioner is not liable as a conclusion of law.

Conclusions of Law

Petitioner, as an MA recipient covered under the program by the Anthem Blue Cross HMO, cannot be held liable, or be billed for, services provided by Gunderson Medical Center whose payment are denied as not medically necessary by the HMO.



That the petition for review is hereby dismissed.

[Request for a rehearing and appeal to court instructions omitted.]

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