Florida Hospitals Face Glenn Close-Like Threat

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Remember the evil Glenn Close character in Fatal Attraction?  We were sure Michael Douglas had drowned her in the bathtub, but she popped up again, still alive and scary as all get-out.

Class actions by uninsured patients against hospitals are like that character.  For a couple of decades now, hospitals have been thinking that the issue has been resolved: that it’s not illegal to charge uninsured patients the sticker price—i.e., the chargemaster price—while giving insurers significant discounts.

But like Glenn Close rising from the bathtub, the issue just won’t die.  Its latest incarnation is Herrera v. JFK Medical Center, in the Middle District of Florida.  The plaintiffs sued HCA and three of its Florida hospitals, alleging breach of contract and violation of the Florida Deceptive Unfair Trade Practices Act (FDUTPA), claiming that they were charged unreasonably high amounts for emergency radiology services: 65 times as much as Medicare and commercially insured patients.  As usual in such cases, they sought class certification.

The plaintiffs claimed the hospitals violated FDUTPA by incorporating chargemaster prices by reference into the patient financial agreement.  The court expressed its “serious doubts” that the claim could prevail but nevertheless ruled that they could try.

The plaintiffs also alleged breach of contract based Florida’s Personal Injury Protection (PIP) statute, which provided coverage for at least part of their hospital bills.  That statute says that a hospital “may charge the insurer and injured party only a reasonable amount . . . .”

The court rejected the defendants’ argument that only the insurer, not the insured, has a cause of action under the PIP statute.  So the defendants lost their motion to dismiss.

The only silver lining for the defendants was the court’s ruling that with claims of this sort, “individual issues predominate.”  Therefore, class certification was denied.

The citation is Case No. 8:14-cv-02327-JSM-TBM (Feb. 20).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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