Bielar v. Washoe Health Sys., Inc.

• Decision Date: 11 July 2013
• Docket Number: No. 57924.,57924.
• Citation: 129 Nev. Adv. Op. 49,306 P.3d 360
• Parties: Penny BIELAR, Appellant, v. WASHOE HEALTH SYSTEMS, INC., A Nevada Corporation; and Washoe Medical Center, Inc., A Nevada Corporation, Respondents.
• Court: Nevada Supreme Court

306 P.3d 360

129 Nev. Adv. Op. 49

Penny BIELAR, Appellant,

v.WASHOE HEALTH SYSTEMS, INC., A Nevada Corporation; and Washoe Medical Center, Inc., A Nevada Corporation, Respondents.

No. 57924.

Supreme Court of Nevada.

July 11, 2013.

Durney & Brennan, Ltd., and Peter D. Durney, Reno, for Appellant.

Lewis & Roca, LLP, and David C. McElhinney, Scott S. Hoffman, and S. Paul Edwards, Reno, for Respondents.

Before PICKERING, C.J., HARDESTY and SAITTA, JJ.

OPINION

By the Court, HARDESTY, J.:

Under NRS 439B.260(1), hospitals generally must reduce charges by 30 percent to inpatients who lack insurance “or other contractual provision for the payment of the charge by a third party,” are not eligible for public medical payment assistance, and arrange within 30 days of discharge to pay the hospital bill.¹ The predominant issue for determination in this appeal is whether a settlement agreement with a third-party tortfeasor who allegedly caused the injuries necessitating the medical services is another “contractual provision for the payment of the charge by a third party” rendering the inpatient ineligible for the 30 percent statutory discount. Because we conclude that a patient's eligibility is determined at the commencement of hospital services, a later settlement agreement with a third party for the payment of such services does not disqualify the patient for the statutory discount.

FACTS AND PROCEDURAL HISTORY

Appellant Penny Bielar was involved in an automobile accident in 2002, and she received treatment for her injuries at respondent Washoe Medical Center, Inc., in April 2003, May 2003, and February 2005. For her treatment in April and May 2003, Bielar signed the hospital's Conditions of Admission and/or Treatment at Washoe Medical Center (COA) form. By the terms of the COA, Bielar granted a statutory lien to Washoe Medical on any settlement proceeds she obtained from the tortfeasor under NRS 108.590 “to the extent of the value of medical/ [h]ospital services rendered.” (Emphasis added.) She also signed an Inpatient Payment Arrangements (IPA) form, agreeing to “pay the balance in full as result of lien (in the settlement).” The IPA also stated that Bielar may “qualify for the 30% discount under NRS 439B.260,” if she made payment arrangements within 30 days of discharge and held no insurance benefits.

In January 2005, Bielar signed a second COA form for additional inpatient treatment she was to receive in February 2005, granting Washoe Medical a second statutory lien. It is undisputed that Bielar had no health insurance at the time of her treatments and was ineligible for coverage under any state or federal programs. At trial, Bielar testified that it was her intent to pay the hospital bills with the money she received from the settlement proceeds recovered from her personal injury claim.

Bielar sued the trucking company that allegedly caused her accident; the company's insurer was Great West Casualty Company. In May 2003 and March 2005, respondents Washoe Health Systems, Inc., and Washoe Medical ² filed in the action two separate notices of NRS 108.590 liens ³ against Bielar and Great West for Bielar's medical expenses incurred at Washoe Medical. The 2003 lien amounted to approximately $32,000, and the 2005 lien amounted to approximately $94,000.

In May 2005, Bielar settled her case against the trucking company. Great West agreed to pay Bielar $1.3 million, and in exchange, Bielar “agree[d] to indemnify and hold harmless [Great West] from any and all liens by healthcare providers, ... known or unknown due to the [accident].” According to Great West, the settlement payment “was to include all elements of damages” and Bielar's counsel “was going to resolve the liens.” Great West also understood that “$500,000 of that sum was for past, present, and future medicals.” Great West sent Bielar's counsel a lump-sum check for $1.3 million.

Subsequently, Washoe Medical sued Great West for satisfaction of the 2003 and 2005 liens. And, because Bielar had a contractual obligation to indemnify Great West, she tendered to Washoe Medical all money that it asserted was due on the liens.

Bielar then filed a complaint against Washoe Medical, disputing the amount of medical charges she incurred for treatment she received at the hospital. She asserted eight claims sounding in contract and tort. Her underlying arguments were twofold: first, she claimed that Washoe Medical failed to reduce their charges by 30 percent as required by NRS 439B.260(1); and second, she claimed that Washoe Medical charged her an unreasonable amount for the goods and services she received and/or improperly charged her for goods and services she did not receive.

Both parties eventually filed motions for summary judgment. Bielar sought a ruling from the district court that she qualified for a discount of the charges under NRS 439B.260. Washoe Medical contended that Bielar lacked standing to bring her lawsuit because the settlement agreement qualified as a “contractual provision for the payment of the charge by a third party” under NRS 439B.260(1)(a). Washoe Medical further argued that Bielar was ineligible for the discount under NRS 439B.260(1) because the two liens attached only to the settlement proceeds paid by Great West and Bielar failed to satisfy NRS 439B.260(1)(c) by making reasonable arrangements within 30 days after discharge to satisfy her hospital bill.

The district court denied Bielar's motion and granted Washoe Medical's motion, holding that the settlement agreement was a “contractual provision for the payment of the charge by a third party” within the meaning of NRS 439B.260(1)(a). It further held that Bielar lacked standing to bring her lawsuit, reasoning that she was not damaged by Washoe Medical's refusal to discount the liens because the debt attached to the settlement proceeds paid by Great West and, thus, the settlement proceeds used to satisfy that debt belonged to Great West. Bielar appealed this order.

This court entered an order reversing the district court's order. See Bielar v. Washoe Health Sys., Inc., Docket No. 50859, ––– Nev. ––––, 281 P.3d 1155 (Order of Reversal and Remand, June 23, 2009). This court held that Bielar had standing to assert her NRS 439B.260(1) discount claim as she presented sufficient facts to establish a logical nexus between her and her claim and an interest in its adjudication. Additionally, this court remanded the matter for further proceedings after determining that undeveloped issues remained concerning “the reasonableness of the hospital lien amount”; “whether [Great West] and Bielar intended the gross settlement amount to pay the entire non-discounted hospital lien”; and “whether Bielar's assignment of any potential tort recovery affects the statutory discount.” In a subsequent order, this court clarified that the undeveloped issues “address the statutory interpretation issue on appeal” and stated that on remand “the district court should determine how these issues affect Bielar's claim to the NRS 439B.260 discount.” Id. (Order Denying Rehearing and Clarifying Order, September 2, 2009).

On remand, Bielar argued that the COA's assignment clause was unconscionable as a matter of law and did not affect the statutory discount. She also argued that her eligibility for the statutory discount was unaffected by the settlement agreement because she was uninsured at the time of the rendition of her treatments. Washoe Medical maintained that the COA affected Bielar's ability to request the statutory discount and that she was not entitled to the statutory discount based on the settlement agreement.

In July 2010, the district court entered an order on remand. Although it declined to address Bielar's contention that the COA's assignment clause was unconscionable, the district court did conclude that the execution of the assignment clause did not deprive Bielar of eligibility for the statutory discount. Moreover, it held that whether the parties intended for the settlement proceeds to pay the full lien amount had no material effect regarding the application of NRS 439B.260. Finally, it held that the reasonableness of the lien amount was irrelevant to its determination of Bielar's eligibility for the statutory discount. However, the district court once again reasoned that Bielar was ineligible for the statutory 30–percent discount because her settlement agreement constituted an “other contractual provision for the payment of the charge by a third party” under NRS 439B.260(1)(a). It also found that Bielar was “clearly entitled to challenge the reasonableness of the lien amount under NRS 108.590.” Accordingly, the district court dismissed Bielar's claims for the statutory discount and proceeded to trial on the remaining accounting claim challenging the general reasonableness of the lien amount.

A jury trial was held on Bielar's accounting claim, during which she presented two witnesses. Dr. Gerard Anderson, a healthcare finance expert, testified that Medicare payments plus 25 percent represents the ceiling of hospital billing reasonableness. He also testified that Washoe Medical realized a 185–percent profit margin on Bielar's total bill, whereas the overall profit margin for the hospital industry is about 5 percent. Finally, he testified that hospitals do not disclose their master billing files to the public, so a person cannot determine the reasonableness of a medical charge by comparing the price for goods and services offered at different hospitals. Additionally, Paula Polek, a billing auditor, testified that Bielar was overcharged approximately $3,800.⁴

At the conclusion of Bielar's case in chief, Washoe Medical moved for judgment as a matter of law pursuant to NRCP 50(a)(1). The district court granted the motion and subsequently entered an order in February 2011. It found that the evidence presented at trial demonstrated that Bielar intended for the settlement proceeds to pay the full amount of the...