Howard v. Willis-Knighton Medical Center

• Decision Date: 08 March 2006
• Docket Number: No. 40,634-CA.,40,634-CA.
• Citation: 924 So.2d 1245
• Parties: Brandi HOWARD, et al., Plaintiffs-Appellants v. WILLIS-KNIGHTON MEDICAL CENTER, Defendant-Appellant.
• Court: Court of Appeal of Louisiana — District of US

924 So.2d 1245

Brandi HOWARD, et al., Plaintiffs-Appellants v. WILLIS-KNIGHTON MEDICAL CENTER, Defendant-Appellant.

No. 40,634-CA.

Court of Appeal of Louisiana, Second Circuit.

March 8, 2006.

Rehearing Denied April 5, 2006.

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Peters, Ward, Bright & Hennessy, by J. Patrick Hennessy, Alan Stegall, Shreveport, Simon, Fitzgerald, Cooke, Reed & Welch, by Keith M. Welch, Shreveport, for Plaintiffs-Appellants Brandi Howard, Donna Atkins, Bessie Tyler and Tana Ashcraft.

Pugh, Pugh & Pugh, L.L.P., by Lamar P. Pugh, Shreveport, Fulbright & Jaworski, L.L.P., by R. Jeffrey Layne, Marcy Hogan Greer, Health One, by James F. Beatty, Jr., for Defendant-Appellant Willis-Knighton Med. Center.

Adams and Reese, LLP, by Gregory D. Frost, Baton Rouge, for Amicus Curiae.

Before WILLIAMS, STEWART and MOORE, JJ.

MOORE, J.

This appeal arises from an interlocutory order in a class action certification proceeding in which the trial court certified two of four subclasses the plaintiffs sought to certify as members of a more broadly defined class of all patients whom Willis-Knighton Medical Center ("WKMC") provided medical treatment for injuries caused by the fault of a third party tortfeasor and filed statutory liens on any judgment or settlement proceeds to which these patients might be entitled. Plaintiffs contend that the standard rates of medical charges are unreasonable. Both sides have appealed: the plaintiffs appeal the denial of certification of two of the subclasses of "uninsured patients," and the defendant appeals the grant of certification of the two subclasses of "insured patients." We affirm.

Facts

The plaintiffs filed this action in January of 2001 alleging improper and illegal billing practices by WKMC.¹ Plaintiffs sought class certification of the action alleging that they are the victims of WKMC's unreasonable charges and collection processes that utilize Louisiana's hospital lien statute, La. R.S. 9:4752 ("Lien Statute"). The unifying connection among class members is that each class member received medical treatment at WKMC for injuries in an accident caused by the fault of a third party and WKMC placed liens against any judgment or settlement proceeds available to the class member from third-party insurers to obtain payment of the treatment charges. Unlike the theories of recovery in the federal cases noted above,² the plaintiffs' theory of recovery appears to be based on an alleged violation of R.S. 9:4752, which gives hospitals "a privilege for reasonable charges or fees on the net amount payable by judgment or settlement by the tortfeasor or his insurer to an injured party, his heirs, or legal representatives." (Emphasis ours). Both the insured and uninsured plaintiffs allege that the hospital's undiscounted rates for medical treatment generated from their "chargemaster"³ are not reasonable. The putative subclasses of medically insured plaintiffs allege that WKMC wrongly charged them the full chargemaster rates instead of discounted charges pursuant to their health insurance with insurers who have contractual agreements with WKMC that provide for discounted charges. The putative subclasses of uninsured patients simply contend that the chargemaster rates are unreasonable.

Hence, the plaintiffs were initially divided into two groups: those who had medical insurance and those who were uninsured when they were treated at WKMC for injuries caused by the fault of a third party. These two groups are each further subdivided into two groups: those who paid their charges in full by virtue of the Lien Statute, and those for whom charges are still pending and subject to liens. The results of these subdivisions are the following four subclasses of plaintiffs who seek the following relief:

(1) First Subclass: Uninsured individuals who paid all WKMC charges by virtue of the Lien Statute. The members of this class seek a judgment awarding an amount equal to the difference between the reasonable charges for services rendered and what they actually paid, plus legal interest.

(2) Second Subclass: Uninsured individuals who have received demands from WKMC through the Lien Statute but have not yet paid. The members of this class seek a judgment declaring the reasonable charges or fees due to WKMC and limiting WKMC's recovery to same, and enjoining WKMC from continuing its current collection practice.

(3) Third Subclass: Insured individuals who paid WKMC through the Lien Statute and the charges were greater than the reimbursed amount authorized by their health insurer. The members of this class seek a judgment awarding the total amount collected by WKMC plus legal interest.

(4) Fourth Subclass: Insured individuals who received demands from WKMC through the Lien Statute for more than the reimbursement amount of their health insurers but have not yet paid. The members of this class seek a judgment declaring that WKMC violated the Lien Statute by not billing the injured parties' health insurers, and enjoining WKMC from continuing that practice.

WKMC opposed the plaintiffs' motion for certification of the four subclasses. After an evidentiary hearing, the trial court denied certification of the first and second class — the two uninsured groups — on grounds that the defendant offered uncontroverted evidence that the charges reflected on WKMC's chargemaster are reasonable, and further concluded that it is a "novel and untested theory" that a court should determine what constitutes reasonable charges rather than market forces or the legislature.

The court certified the third and fourth subclasses, finding that the members of these classes were covered by health insurance, and therefore, provider agreements. These agreements provide that they will pay less than 100% of the chargemaster rate, and yet the members were charged and billed 100% of the chargemaster rate and collection was made or attempted through the Lien Statute. The common question, the court concluded, is whether the Lien Statute allows WKMC to bill and collect chargemaster rates instead of the lower provider agreement rates.

The court stated that the evidence showed that the class of insureds is so numerous that joinder is impractical, the issue is common to the class, and the claims of the representatives appointed are typical of the claims of the class. Further, the class is defined objectively in terms of ascertainable criteria such that determining its constituency is not problematic.

The court also found that prosecution of separate actions would create a risk of inconsistent adjudications. Finally, it found that the class action is superior to any other available method for the fair and efficient adjudication of the controversy. It appointed plaintiffs Donna Atkins and Bessie Tyler to serve as class representatives.

Both sides appealed those certification rulings that they opposed.

Discussion

Under Louisiana law, in order to meet class certification requirements, plaintiffs must meet all of the requirements of La. C.C.P. art. 591(A) and fall within one of the subsections of 591(B). Defraites v. State Farm Mut. Auto. Ins. Co., 03-1081 (La.App. 5 Cir. 1/27/04), 864 So.2d 254, writ denied, 2004-0460 (La.8/12/01), 869 So.2d 832; Edmonds v. City of Shreveport, 39,893 (La.App. 2 Cir. 8/31/05), 910 So.2d 1005. Article 591 states in pertinent part:

A. One or more members of a class may sue or be sued as representative parties on behalf of all, only if:

(1) The class is so numerous that joinder of all members is impracticable.

(2) There are questions of law or fact common to the class.

(3) The claims or defenses of the representative parties are typical of the claims or defenses of the class.

(4) The representative parties will fairly and adequately protect the interests of the class.

(5) The class is or may be defined objectively in terms of ascertainable criteria, such that the court may determine the constituency of the class for purposes of the conclusiveness of any judgment that may be rendered in the case.

B. An action may be maintained as a class action only if all of the prerequisites of Paragraph A of this Article are satisfied, and in addition:

(1) The prosecution of separate actions by or against individual members of the class would create a risk of:

(a) Inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or

(b) Adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or

(2) The party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or

(3) The court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to these findings include:

(a) The interest of the members of the class in individually controlling the prosecution or defense of separate actions;

(b) The extent and nature of any litigation concerning the controversy already commenced by or against members of the class;

(c) The desirability or undesirability of concentrating the litigation in the particular forum;

(d) The difficulties likely to be encountered in the management of a class action;

(e) The practical ability of individual class members to pursue their claims without class certification;

(f) The extent to which the relief plausibly demanded on behalf of or against the class, including the vindication...