Ohio Appellate Court Affirms Dismissal of Uninsured Patient's Claims
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.
Because defendant failed to demonstrate that FRMC breached any contractual duty it owed to her, defendant’s claim for breach of duty of good faith and fair dealing also failed as a matter of law.
Dismissal of defendant’s unjust enrichment claim was affirmed because the Appellate Court concluded the claim was too speculative. Defendant paid nothing for the services rendered. The sole basis for the unjust enrichment claim was an account receivable owed to FRMC. The potential that FRMC might eventually get paid some amount was insufficient to support a claim for unjust enrichment.
Lastly, the Appellate Court rejected Defendant’s claim for violations of the OCSPA. The Appellate Court reasoned that the mere fact that defendant believed the charge was unfair does not demonstrate an unfair or deceptive act under the OCSPA. Finally, with respect to Defendant’s claim that the charges were unconscionable, the Appellate Court noted that unconscionability applies to “similar” transactions by “like” customers. Because uninsured patients are not like insured patients, the Appellate Court concluded that Defendant’s unconscionability claim under the OCSPA failed as a matter of law.
The Appellate Court’s decision leaves unanswered the question of what constitutes a reasonable charge to uninsured patients. While many hospitals have voluntarily adopted discounts from full charges for uninsured patients, many hospitals have elected not to adopt mandatory uninsured discounts. The Appellate Court’s reluctance to attempt to delve into what a reasonable charge should be is consistent with a growing number of courts that have simply refused to attempt to answer the question while suggesting that the question is better left to State and Federal legislatures and regulatory agencies. As a result, in those States where legislatures and regulatory bodies have not set forth parameters for permissible charges to uninsured patients, similar lawsuits will likely continue.
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