SZD Health Law Scan : Health Care Lawyers & Attorneys : Schottenstein Zox & Dunn Law Firm : Strategic Planning, Managed Care, Insurance : Columbus, Cleveland, Cincinnati, Central Ohio

In the latest in a long line of cases in Ohio and elsewhere involving uninsured patients who sued hospitals alleging excessive and unconscionable charges, on September 30, 2008, the Court of Appeals of Ohio, Sixth Appellate District, issued a Decision and Judgment in Firelands Regional Medical Center v. Jennifer R. Jeavons, 2008-Ohio-5031, affirming the trial court’s dismissal of the defendant’s counterclaims.

The case started as a simple collection matter.  Firelands Regional Medical Center (“FRMC”) brought a claim against an uninsured patient seeking compensation for services rendered on three separate dates of service.  Thereafter, FRMC amended its claim to add two additional dates of services and sought a total of $2,878.96, plus interest.

In response to FRMC’s complaint, the defendant admitted she received services but claimed that the rates charged were “far in excess of the reasonable, usual and customary rates for the services rendered.”  The defendant also filed a purported “class-action counterclaim” alleging that she is a member of a class of uninsured patients that received care at FRMC from 1989 to present that were all charged excessive rates by FRMC.  The claims alleged in the counterclaim include: (1) declaratory and injunctive relief claims; (2) breach of contract; (3) unjust enrichment; (4) breach of duty of good faith and fair dealing; and (5) violations of the Ohio Consumer Sales Practices Act (“OCSPA”).

The trial court granted FRMC’s Motion to Dismiss.  On appeal, defendant raised two assignments of error asserting that the trial court improperly dismissed the counterclaim and improperly denied defendant’s motion for reconsideration of the same.

With respect to the breach of contract claim, the defendant alleged on appeal that FRMC engaged in an anticipatory breach of the contract when it filled in the price term of the contract with an unreasonable sum.  The Court of Appeals rejected this argument and refused to engage in any determination of what constitutes a reasonable fee.  Citing the decision of the United States Third Circuit Court of Appeals in DiCarlo v. St. Mary Hosp. (3rd Cir 2008, 530 F.3d 255), the court stated “[A] Court could not possibly determine a “reasonable charge” for hospital services without wading into the entire structure of providing hospital care and the means of dealing with hospital solvency.”  In addition to rejecting the idea that a court could or should determine what constitutes a reasonable charge for hospital services, the court also noted that defendant never offered any evidence regarding what she considered a reasonable charge. 

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On October 3, 2008, Congress passed and President Bush signed the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 as part of the Emergency Economic Stabilization Act of 2008 (the bailout bill).  It amends the Mental Health Parity Act of 1996 (29 U.S.C.A. § 1185a). 

According to the new legislation, if an employer’s group health plan provides mental health and substance use disorder benefits (“mental health benefits”), then it may not discriminate in its coverage between those benefits and the medical and surgical benefits.   The plan may not have higher deductibles, copayments, coinsurance, or out-of-pocket expenses for mental health services.  Neither may the plan have more restrictive treatment limitations, such as limitations on the frequency of treatment, number of visits, days of coverage, or other limits on the scope or duration of treatment.  Also, if the plan provides coverage for medical and surgical benefits provided by out-of-network providers, then it must similarly cover mental health benefits provided by the out-of-network providers.  The law applies to employers health plans with more than 50 enrolled employees.

Congress had previously tried to pass this legislation on multiple occasions in 2007 and 2008, but had yet to overcome disagreements between the House and Senate versions, partly revolving around paying for the costs of the legislation.  In the end, the new legislation contains no provision to directly pay the estimated $3.4 billion dollar cost of the new legislation.  In the context of a $700,000,000,000 bailout, however, Congress was apparently no longer concerned.

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In the heat of a Presidential Campaign, especially one of this historical importance, it is not surprising that political commentators focus on the differences between the candidates' views.  But when it comes to health care reform, especially now that the economy will make it harder for the victor to fix the financial part of the problem, it might make sense to consider what Democratic candidate Barack Obama and Republican candidate John McCain can agree to.

At a recent  Washington, D.C. program, Peter Leibold, Executive Vice President/CEO of the American Health Lawyers Association, identified 10 areas of agreement among the candidates when seeking solutions to the problems of cost control and increased quality:

1.   Governmentally supported pooling mechanisms for catastrophic illness

2.   Payment mechanisms that encourage quality of care

3.   Support for information technology use by health care providers

4.   Promoting coordinated care and disease management

5.   Increased funding for research and public health

6.   Provider cost transparency

7.   Promoting healthy lifestyles

8.  Allowing re-importation of drugs and quicker release of generics

9.   Portable health insurance

10. Greater attention to treatment of cancer and autism

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