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Baker v. PHC-Minden, L.P.

Supreme Court of Louisiana

May 5, 2015

PRENTISS BAKER AND SHERYL WIGINTON, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED
v.
PHC-MINDEN, L.P. D/B/A MINDEN MEDICAL CENTER

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[Copyrighted Material Omitted]

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ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, SECOND CIRCUIT, PARISH OF WEBSTER.

REVERSED; JUDGMENT OF THE DISTRICT COURT REINSTATED AND REMANDED.

For Applicant: Robert Elton Arceneaux, HOFFOSS DEVALL, LLC; Claude P. Devall, Jr., John Lee Hoffoss, Jr., LABORDE LAW FIRM; Derrick G. Earles, MARTZELL & BICKFORD; Scott R. Bickford, Lawrence J. Centola, THE LAW OFFICE OF KIRBY KELLY; Kirby Dale Kelly, Harold Dean Lucius, Jr..

For Respondent: Kurt Stephen Blankenship, Robert Irby Baudouin, BLUE WILLIAMS, LLP.

KNOLL, JUSTICE. GUIDRY, Justice, additionally concurs and assigns reasons.

OPINION

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[2014-2243 La. 1] KNOLL, JUSTICE

We granted this writ application to resolve a conflict among the appellate courts of this state on the issue of whether a class action is the superior method for adjudicating actions brought pursuant to the Health Care Consumer Billing and Disclosure Protection Act, La. Rev. Stat. § 22:1871 et seq. (" Balance Billing Act" ). Baker v. PHC-Minden, L.P., 14-2243 (La. 1/16/15), 157 So.3d 1113. Across the

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state, plaintiffs are filing these actions against health care providers from whom they sought treatment following automobile accidents and with whom their health care insurers had contracted reimbursement rates for the services rendered. At issue is the legality of these providers' policy of collecting or attempting to collect the undiscounted rate from the insured if a liability insurer may be liable, implemented through the filing of medical liens against plaintiffs' lawsuits and settlements pursuant to the health care provider lien statute, La. Rev. Stat. § 9:4752. A review of the jurisprudence reveals plaintiffs in the Third Circuit Court of Appeal proceed pursuant to our class action provisions, while plaintiffs in the Second Circuit Court of Appeal have been denied class certification. After reviewing the record and the applicable law, we find the class action is superior to any other available method for a fair and efficient adjudication of the common controversy over the disputed [2014-2243 La. 2] billing and lien practices. Accordingly, we reverse the judgment of the court of appeal, Second Circuit. Finding all other requirements for class certification properly met, we reinstate the judgment of the trial court.

FACTS

On July 13, 2011, plaintiffs Prentiss Baker,[1] Sheryl Wiginton, and Judyette Allen filed this class action proceeding, alleging PHC-Minden, L.P. d/b/a Minden Medical Center (" Minden" ) engaged in unlawful billing practices by billing them in an amount in excess of the agreed upon rate negotiated between the hospital and plaintiffs' respective insurers. Specifically, plaintiffs alleged Minden had a collection policy in effect since at least 2000 for billing insured patients involved in automobile accidents where a third party was liable for the crash. This collection policy was implemented across-the-board, regardless of the health insurance issuer involved, through the following actions:

1. Upon admission or soon thereafter, Minden collected information from the patient about the offending driver's liability insurance and the patient's own automobile insurance;
2. If the patient did not know the information upon admission, Minden sent a form letter to the patient requesting the patient get the liability insurance information and contact Minden with that information;
3. Once the liability insurance information was obtained or the patient's attorney was known, Minden would send a lien pursuant to La. Rev. Stat. § 9:4752 to the liability insurer and the patient's attorney seeking to collect from the patient's damage settlement the full and undiscounted rate.
4. If the time delays were such that Minden was close to running out of time to file with the patient's health insurance, Minden would only then file a claim with the health insurance company, but not before it first asserted its lien on the patient's settlement through the liability insurance company and the patient's attorney.

[2014-2243 La. 3] Even if Minden filed a claim with and received payment through the health insurance company, Minden still allegedly attempted to collect the full rate from the patient's settlement through the patient's attorney and the liability insurer using medical liens. Plaintiffs allege hundreds of other patients have been subjected to this collection policy, which they argue violates

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the Balance Billing Act. Below is a summary of the specific manner in which the collection policy was allegedly applied to the named plaintiffs individually.

Prentiss Baker

On January 31, 2007, Baker was admitted to Minden's emergency room for injuries sustained in an automobile accident in Minden, Louisiana, and incurred medical expenses in the undiscounted amount of $1,394.56. At the time of treatment, Baker was insured under a Mail Handlers Benefit Plan (" Mail Handlers" ) health insurance policy. On February 7, 2007, Baker's medical bill was sent by Minden to Mail Handlers for payment. Because he was involved in an automobile accident, Minden also sent a letter to Baker asking for information regarding any automobile insurance that might have been available. On February 23, 2007, the hospital received a letter from Baker's attorney, Kirby Kelly, requesting an itemized bill. The record reveals Minden quoted the full, undiscounted amount and also placed a lien against the proceeds of the lawsuit filed by Baker in which he sought damages, including medical expenses, from the adverse driver.

On June 19, 2007, Mail Handlers sent Minden a denial of the claim stating it had not received a copy of the plan reimbursement agreement. The hospital followed up by telephone, and Mail Handlers stated Baker had not returned the necessary subrogation forms; therefore, it denied the claim. Baker then called [2014-2243 La. 4] Minden on July 12, 2007, and indicated the bill was being turned over to State Farm, the third party insurer, and they would take care of the bill.

After apparently settling the lawsuit, Kirby Kelly's office called Minden on August 20, 2007, and inquired into whether the hospital would reduce the bill by 50%. Ultimately, the hospital agreed to reduce the bill by 20% and accepted $1,115.72 as payment in full. The remaining balance was written off as a loss by Minden.

Sheryl Wiginton

Wiginton presented at Minden's emergency room on March 31, 2008, for injuries sustained in an automobile accident in Minden, Louisiana, and incurred medical expenses in the undiscounted amount of $2,087. At the time of treatment, Wiginton was insured under a Blue Cross Blue Shield of Louisiana (" Blue Cross" ) health insurance policy.

On April 7, 2008, Minden billed Blue Cross for her medical treatment. Blue Cross issued an explanation of benefits setting forth the patient's liability of $505.66, which was the copayment plus the deductible. However, the record indicates Wiginton paid $100 upon arrival at the emergency room, thus the balance of her liability was $405.66. She later paid $200 for a total payment by her of $300. As per its collection policy, the hospital also filed a lien against the proceeds of her lawsuit for the full undiscounted amount.

Wiginton's attorney, Kirby Kelly, called Minden on November 20, 2008, and informed Minden his office was going to send a check for Wiginton's medical bills in the amount of $1,773.95. Minden received this check on December 3, 2008, and a note was made by Minden to refund the patient all monies except her responsibility (deductible) under the insurance policy. Nevertheless, a clerical error was made on the part of Minden whereby it never reimbursed Wiginton's [2014-2243 La. 5] payments. It was not until three years later, and after the instant lawsuit was filed, that Minden realized its error and sent a check to Wiginton in the amount of $1,568.29.

Judyette Allen

Allen was involved in an automobile accident on July 8, 2010, in Minden, Louisiana,

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and presented at the Minden emergency room, seeking medical attention. After being treated for her injuries, Allen incurred medical expenses in the undiscounted amount of $2,756.95. At the time of treatment, Allen was also insured under a Blue Cross health insurance policy. However, Blue Cross was never billed for Allen's medical treatment. Instead, on July 14, 2010, a copy of the bill and a lien for the full, undiscounted rate was sent by Minden to State Farm, the third party insurer. Soon thereafter, and after apparently being advised of the lien, Allen called Minden and informed the hospital she was going to begin making payments on her account until the lawsuit settled with the party at fault.

In due time, State Farm settled the lawsuit pertaining to medical payments and sent a check to Allen's attorney, Kirby Kelly. Although Minden's name was on the check, the record indicates Kirby Kelly refused to forward payment to the hospital until the liability portion of the lawsuit also settled. Because the liability portion of the suit did not settle for some time, Allen again began to make payments on the bill. Ultimately, Allen paid a total amount of $480.

Approximately one year later, on September 12, 2011, Allen called Minden and asked that Blue Cross be billed for the medical expenses. Blue Cross eventually paid Minden $573.27 in February of 2012, and the hospital refunded Allen her payment of $480.

As a result of these allegedly illegal billing practices, plaintiffs claim Minden is liable unto petitioners and to those similarly situated for:

[2014-2243 La. 6] (1) repayment of all overpayments;
(2) mental anguish, worry and concern caused by wrongful collection practices and collections;
(3) loss of profits or use;
(4) out-of-pocket expenses;
(5) emotional distress;
(6) all other damages allowed by law; and
(7) penalties, attorney fees, costs, and expenses.

Seeking class certification, plaintiffs filed a motion to certify class on September 28, 2011. Minden opposed class certification on various grounds. First, Minden argued it cannot be found to have violated the Balance Billing Act for the years 2000 through 2003 since the law was not in existence during that time period, only having taken effect on January 1, 2004. Second, because each plaintiff's situation was resolved differently, Minden took issue with a broad and over-encompassing class definition.

After a hearing on the plaintiffs' motion, the trial court granted class certification. In a lengthy opinion, the trial court recognized the class should only extend back to January 1, 2004, given the effective date of the Balance Billing Act, but otherwise granted class certification. The trial court also found merit in defendant's argument the different circumstances pertaining to the individual plaintiffs was an obstacle to creating a blanket class and reasoned, therefore, subclasses should be formed in accordance with the Third Circuit decision in D ...


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