Uninsured patient sues hospital
INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Uninsured patient sues hospital
Gene Moran, who was a patient at Huntington Beach Hospital three times in 2013, sued defendants Prime Healthcare Management, Inc.; Prime Healthcare Huntington Beach, LLC; Prime Healthcare Services, Inc.; and Prime Healthcare Foundation, Inc. (collectively the defendants), under various theories in 2013.
In the appellate court’s prior opinion, it found that while most of Moran’s claims lacked merit, he had sufficiently alleged facts supporting standing to claim that the amount that self-pay patients were charged was unconscionable, and the court reversed the trial court’s dismissal of the case.
Moran’s sixth amended complaint included both the allegations regarding unconscionability and a new theory of the case. The new allegations asserted that the defendants had violated the Unfair Competition Law (UCL) and the Consumer Legal Remedies Act (CLRA) by failing to disclose Evaluation and Management (EMS) fees charged in the emergency room through signage or other methods. The complaint sought relief under both the old and new theories for violations of the UCL, CLRA, and for declaratory relief.
The defendants moved to strike the allegations regarding EMS fees, arguing that their disclosure obligations were defined by statute. The trial court agreed and struck the allegations from the sixth amended complaint. Moran appealed.
Both parties agreed that this case was appealable under the “death knell” doctrine relating to putative class actions. The court agreed that exercising appellate jurisdiction was appropriate in this case.
To the extent the court treated the case, as Moran specifically requested, under the same standard of review as a demurrer, it found no error. Moran chose to combine his two theories of liability, unconscionability and failure to disclose the EMS fees, in a single cause of action. Accordingly, the court said, the motion to strike was proper.
The Payers’ Bill of Rights, effective July 1, 2004, was adopted to “provide patients, health plans and health care purchasers with more information about charges for hospital care. The author states that this bill will also discourage hospitals from playing games with hospital pricing in a way that gouges private payers and patients.”
As adopted, hospitals were required to (1) “make a written or electronic copy of its charge description master available, either by posting an electronic copy of the charge description master on the hospital’s Internet Web site, or by making one written or electronic copy available at the hospital location” and (2) “post a clear and conspicuous notice in its emergency department, if any, in its admissions office, and in its billing office that informs patients that the hospital’s charge description master is available in the manner described in subdivision (a).”
The Payers’ Bill of Rights included other requirements in furtherance of its goal of price transparency. As amended, hospitals were also required to file their chargemasters annually with the Office of Statewide Health Planning and Development (OSHPD), and to list their 25 most common outpatient procedures and the average prices with OSHPD, which publishes that information on its website.
Additionally, at the request of a person without insurance, hospitals must provide written estimates of expected charges, but this provision does not apply to emergency services. The exception for emergency care reflects a careful balancing of transparency on the one hand and not discouraging uninsured patients from seeking necessary emergency care on the other.
Similarly, federal law applicable to hospitals participating in Medicare, under the Emergency Medical Treatment and Active Labor Act (EMTALA), prohibits delaying treatment of an emergency room patient to inquire about payment or insurance coverage.
Moran contended that the trial court “effectively” found an “implied safe harbor” for the defendants. The appellate court did not find that the trial court’s order wrongfully “implied” a safe harbor. It simply found that no duty existed to post Moran’s requested signage.
Given that both the state and federal governments have thoroughly considered patients’ need for price transparency about hospital charges, the court found that, as a matter of law, the hospital’s policy of not providing additional signage or other warnings about the EMS fee did not state a claim for unfair, unlawful, or fraudulent conduct within the UCL.
Moran’s declaratory relief claim with respect to the EMS fee, like his UCL and CLRA claims, relied entirely on the idea that the hospital was required to take steps beyond what was required by state law to inform him of those fees. The court disagreed.
According to the court, none of the contentions Moran raised about the trial court’s purportedly faulty order constituted reversible error.
Moran’s request for judicial notice was granted. The court’s order striking certain portions of the complaint was affirmed. The defendants are entitled to their costs on appeal.
Moran v. Prime Healthcare Management, Inc.—California Courts of Appeal, Fourth Appellate District—August 7, 2023—No. G060920.
