Cox v. Athens Regional Medical Center, Inc., No. A06A0341.

• Decision Date: 26 May 2006
• Docket Number: No. A06A0341.
• Citation: 279 Ga. App. 586,631 S.E.2d 792
• Parties: COX et al. v. ATHENS REGIONAL MEDICAL CENTER, INC.
• Court: Georgia Court of Appeals

279 Ga. App. 586

631 S.E.2d 792

COX et al. v. ATHENS REGIONAL MEDICAL CENTER, INC.

No. A06A0341.

Court of Appeals of Georgia.

May 26, 2006.

COPYRIGHT MATERIAL OMITTED

Cathey & Strain, Dennis T. Cathey, Edward E. Strain III, David A. Sleppy, Cornelia, Vroon & Crongeyer, Bryan A. Vroon, John W. Crongeyer, Atlanta, for appellants.

Bondurant, Mixson & Elmore, Emmet J. Bondurant, Michael B. Terry, Atlanta, Fortson, Bentley & Griffin, J. Edward Allen, Jr., Athens, for appellee.

BLACKBURN, Presiding Judge.

Following the dismissal of their suit against Athens Regional Medical Center, Inc. ("ARMC"), Mercer L. Cox, John Wilson, Kimberly Hogland, Keith Hambrick, and Mary Sue Cox appeal contending that the trial court erred in dismissing their claims for (1) breach of contract, (2) violation of the Georgia Uniform Deceptive Trade Practices Act, (3) unjust enrichment, (4) breach of fiduciary duty, and (5) declaratory and injunctive relief.¹ Appellants' claims stem from their allegation that ARMC, which operates a non-profit hospital charges uninsured patients more than it charges patients covered by insurance or Medicare or Medicaid. For the reasons that follow, we affirm.

In response to Cox's complaint, ARMC filed a motion to dismiss. Because the trial court, without objection, considered a contract between the parties and both parties relied heavily on the contract language before the trial court, ARMC's motion to dismiss was converted to a motion for summary judgment. See OCGA § 9-11-12(b) ("[i]f, on a motion to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment").

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9-11-56(c). A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant.

Matjoulis v. Integon Gen. Ins. Corp.²

So viewed, the record shows that appellants were uninsured patients who received medical treatment from ARMC. Mercer L. Cox was treated for a burn on his hand and charged $941.60; Kimberly Hogland was briefly hospitalized and charged $3,421; Keith Hambrick was treated as an outpatient one afternoon and charged approximately $8,500; Mary Sue Cox was treated briefly in the emergency room and charged approximately $2,386; and John Wilson was charged $10,650.26 for a one-day cardiac catheterization procedure. Appellants allege that these amounts are unduly inflated when compared to the amounts charged to insured patients, who enjoy the benefit of reduced rates negotiated in bulk by insurance companies and government third party payors on behalf of their covered patients.

As a part of the registration process, appellants each signed an admission form routinely provided by ARMC to nonemergency patients. The admission form states: "In consideration of hospital services rendered to the patient, I jointly or severally, do hereby agree to pay Athens Regional Medical Center any and every account presented to me, or us jointly or severally, for said service or services in accordance with the rates and terms of the hospital." The form itself does not provide specific prices charged by the hospital for services or supplies.

ARMC sets rates for hospital services under authority delegated to it by the Hospital Authority of Clarke County under a lease agreement governing the ARMC's lease and operation of the hospital facility. The lease agreement allows ARMC to set hospital rates and enter into agreements with third party insurers and join hospital and provider networks if ARMC deems it appropriate. ARMC provides emergency services to residents of Clarke County regardless of their ability to pay, and provides care to indigent, charity, and other patients who cannot afford to pay for all or a portion of the cost of their health care, based on eligibility standards ARMC adopts. The overall extent of this care is dependent in part on ARMC's ability "to provide such without jeopardizing its ability to serve as the principal hospital provider for the general public of Clarke County." Appellants specifically allege they do not seek free hospital care.

1. Appellants contend that ARMC breached its contract with them by not charging them what they deem a "reasonable" rate, because ARMC's admission form does not set a particular dollar amount for the services rendered. We disagree.

(a) Georgia's Statutory Context for Hospital Rates

At the outset, it is important to recognize statutory context relevant to the rates hospitals charge their patients in Georgia. Under OCGA § 31-7-11(a), hospitals must make available to the public, upon request, certain pricing information, such as the charge for patient care or admission kits, emergency room charges, charges for specific routine and special tests such as chest x-rays and head CAT scans, the average total charges per patient day, the daily room rate of a hospital room, and operating and recovery room charges. The pricing information "shall be composed in a simple clear fashion so as to enable consumers to compare hospital charges and make cost-effective decisions in the purchase of hospital services." Id. Appellants do not allege that this information was unavailable here.

The Georgia Code also authorizes health care insurers to enter into agreements with health care providers such as hospitals, whereby the amount of payment is negotiated on behalf of patients participating in the insurance policy. OCGA § 33-30-23. In providing for this scheme, the General Assembly intended "to encourage health care cost containment while preserving quality of care," presumably by allowing insured patients to benefit from an economy of scale arising from the insurance company's negotiated group rates for hospital services. OCGA § 33-30-21.

At the heart of this case is the notion that those who do not participate in an insurance policy do not benefit from the lower rates hospitals charge insured patients. Appellants do not allege that ARMC has violated any of the statutory schemes noted here; they simply challenge the fairness of charging uninsured patients more than insured patients. In doing so, they ultimately seek judicial intervention in a commercial transaction (for which the legislature has already established a policy favoring price comparison by the patient), whereby judges and juries would be called on to set appropriate prices for hospitals to charge their patients. We do not answer this call, and instead address the legal arguments properly presented before us.

(b) Breach of Contract Claim

"The construction of a contract is a question of law for the court." OCGA § 13-2-1. "Courts are not at liberty to revise contracts while professing to construe them." (Punctuation omitted.) Sosebee v. McCrimmon.³ "[N]o construction is required or even permissible when the language employed by the parties in the contract is plain, unambiguous and capable of only one reasonable interpretation." (Punctuation omitted.) Nguyen v. Lumbermens Mut. Cas. Co.⁴

Here, the contract unambiguously creates an obligation for appellants to pay ARMC for hospital services "in accordance with the rates and terms of the hospital." Appellants argue that because the contract is so worded, the contract creates an open price term for which a "reasonable" price must be substituted by the court. A contract for hospital services does not fall within the scope of Georgia's Commercial Code, and appellants cite to no Georgia authority creating a condition of reasonableness under the facts in this case. Instead, appellants erroneously rely on Reddix v. Chatham County Hosp. Auth.,⁵ and cases similar to it, which focus primarily on evidentiary issues in a collection action brought by a hospital to recover payment for charges on a patient's account. In Reddix, the Court held that where a hospital brought a collection action against a patient, and there was no agreement or proof as to the amount on the patient's account statement, the hospital was required to prove the reasonable amount of the charges for which it seeks reimbursement. Id. at 862-863(4), 216 S.E.2d 680. Here, the amount patients were charged is not in dispute, and the ARMC is a defendant, not a plaintiff, with no burden to prove its damages. Therefore, Reddix, does not apply to the case at bar.

This case is also distinct from Med. Assn. of Ga. v. Blue Cross, etc. of Ga.⁶ That case involved a contract between doctors and Blue Cross under which doctors would be reimbursed for performing procedures according to the "usual, customary and reasonable" fee program, which was set by Blue Cross. After Blue Cross changed its fee program, the court ruled that because the doctors were not allowed access to the method by which Blue Cross set the "usual, customary and reasonable" fees, they were wrongfully prevented from enforcing the contract term and ensuring that Blue Cross paid them the proper amount under the new fee program. Therefore the court held that Blue Cross must make its fee methodology available to the doctors to allow them to determine whether they had been fully compensated for their services.

Here, however, the contract does not specify that the hospital will charge "usual, customary and reasonable" fees; it simply provides that the patients will pay "in accordance with the rates and terms of the hospital." There is no "usual, customary and reasonable" term in the contract, and plaintiffs do not allege that they are being charged anything other than what the hospital normally charges uninsured patients, which is what the contract authorizes the hospital to do. Unlike this case, the dispute in Medical Association was over...