Court Revives Class Allegations in Billing Practices Suit

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By Mary Anne Pazanowski

April 26 — A federal appeals court April 26 reinstated class allegations in a lawsuit alleging medical providers charged unreasonable fees for some emergency services.

The U.S. Court of Appeals for the Eleventh Circuit, in an unpublished opinion, said a federal district court should have allowed limited discovery on whether issues common to a large group of potential plaintiffs would predominate over any questions unique to the individuals in the action, rather than disallowing class certification.

The case involves an issue that is growing: whether medical providers should be stopped from charging allegedly unreasonable amounts for emergency services when they know those claims won't be paid by no-fault insurers, thus rendering the patients liable for the overlap. The billing practices are known as surprise or balance billing.

This putative class action was brought against HCA Holdings Inc. and three of its Florida hospitals, alleging that the hospitals charged unreasonable fees for emergency radiological services. The U.S. District Court for the Middle District of Florida struck the plaintiffs' class action allegations, effectively denying class certification (40 HCDR, 3/2/15).

PIP Coverage Limits

Florida law requires motor vehicle owners to have personal injury protection, or PIP, insurance coverage. Once an insurer pays the $10,000 policy limit, however, the insured become responsible for any remaining expenses.

The plaintiffs alleged that the defendant hospitals charged PIP-covered patients unreasonable fees for radiological services. In some cases, they said, the fees charged were 65 percent higher than the usual and customary fees charged for similar services.

The plaintiffs asserted violations of Florida's Deceptive and Unfair Trade Practices Act and breach of contract. The district court refused to dismiss the complaint, but struck the class allegations after finding that the key issues, namely the reasonableness of the hospitals' charges and damages incurred by each plaintiff, “would be highly individualized in nature.”

Common Questions

Class certification is appropriate when questions of law or fact common to the class members predominate over questions that affect only individuals. The district court said this requirement hadn't been met in this case.

The Eleventh Circuit disagreed, saying it wasn't apparent on the face of the plaintiffs' complaint that individualized issues would predominate. The parties, the court said, presented conflicting interpretations of the issues and evidence that would be required to establish liability and damages for the whole class.

The court said discovery “could reveal that it is relatively easy to determine that these rates are unreasonable across the board without having to analyze differences between hospitals or patients.” Moreover, it said, the presence of individualized damages issues didn't necessarily prevent a finding that common issues in the case predominate.

The court said its opinion shouldn't be read to suggest how the district court should rule on the certification question. It held only that the lower court should have allowed discovery instead of striking the class allegations.

Judges Beverly B. Martin, Julie E. Carnes and R. Lanier Anderson III issued the per curiam opinion.

Cohen Milstein Sellers & Toll PLLC represented the plaintiffs. Carlton Fields Jorden Burt PA and Buchanan Ingersoll & Rooney PC represented the hospitals.

To contact the reporter on this story: Mary Anne Pazanowski in Washington at mpazanowski@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

For More Information

The opinion is at http://src.bna.com/eru.