MCG Health, Inc. v. Kight

• Citation: 750 S.E.2d 813,325 Ga.App. 349
• Decision Date: 22 November 2013
• Docket Number: No. A13A1149.,A13A1149.
• Parties: MCG HEALTH, INC. v. KIGHT.
• Court: United States Court of Appeals (Georgia)

325 Ga.App. 349

750 S.E.2d 813

MCG HEALTH, INC.

v.KIGHT.

No. A13A1149.

Court of Appeals of Georgia.

Nov. 22, 2013.

Reconsideration Denied Dec. 10, 2013.

Hull Barrett, David E. Hudson, Augusta, for Appellant.

Nicholson Revell, Sam G. Nicholson, Harry Duff Revell, Augusta, for Appellee.

ANDREWS, Presiding Judge.

MCG Health, Inc. appeals from the trial court's ruling on summary judgment that the hospital lien it filed pursuant to OCGA § 44–14–470 et seq. for hospital care furnished to Christopher Kight was void, and from the award of attorney fees and expenses of litigation to Kight pursuant to OCGA § 13–6–11. For the following reasons, we reverse.

MCG Health (the Hospital) operates a hospital under the name MCG Medical Center. On March 21, 2007, the Hospital filed a lien pursuant to OCGA § 44–14–470 et seq. for hospital care furnished to Kight from February 4 to February 20, 2007, for hospital charges in the amount of $36,177.68. It is undisputed that the hospital care was furnished to Kight for injuries he sustained in an automobile accident in which Kight was a passenger in a car driven by an allegedly intoxicated driver (the tortfeasor), and that the Hospital furnished the care pursuant to a contract with Kight's managed health care insurer, Blue Cross/Blue Shield (Blue Cross).

Pursuant to OCGA § 44–14–470(b), the lien for hospital care furnished to Kight was a lien "upon any and all causes of action" accruing to Kight on account of the injuries that necessitated the care. In December 2007, after Kight received an offer from the tortfeasor to settle his cause of action for the injuries, Kight demanded that the Hospital cancel its lien against the cause of action because, based on payments agreed to by the Hospital and Blue Cross under their contract, there were no unpaid charges owed to the Hospital for care furnished to Kight. Kight contended that, because no debt was owed the Hospital under the contract, the Hospital was precluded from asserting a lien under OCGA § 44–14–470(b). After the Hospital failed to cancel the lien, Kight brought an action against the Hospital in March 2008 (for declaratory and equitable relief) claiming that, when the lien was filed, there were no unpaid charges for care furnished by the Hospital under the contract; seeking a ruling that the lien was invalid and void; and also seeking the award of attorney fees and expenses pursuant to OCGA § 13–6–11. The Hospital answered and Kight subsequently moved for partial summary judgment. On September 24, 2008, the Hospital filed an amended lien pursuant to OCGA § 44–14–470 et seq. The amended lien stated that it "supercedes the previous lien ... only as to the total charges presently owed" and that the Hospital furnished care to Kight "from February 4, 2007 to February 20, 2007, resulting in unpaid charges in the amount of $863.10." After filing the amended lien, the Hospital amended its answer and filed a counterclaim against Kight in December 2009 stating that the Hospital furnished Kight additional care for his injuries in February, March, and April of 2007; that Kight owed the Hospital for unpaid deductibles and co-pays in the amount of $863.10 for the care; and seeking a judgment in the amount of $863.10 to enforce the lien as amended against Kight's cause of action against the tortfeasor.

After Kight moved for summary judgment, the Hospital also moved for summary judgment on its counterclaim and on Kight's claims. In February 2010, the trial court entered an order granting partial summary judgment in favor of Kight on his claims seeking declaratory and equitable relief; ruling that the hospital lien filed on March 21, 2007, was invalid and "void ab initio"; directing the clerk to cancel the lien; and ruling that the Hospital was not entitled to use the lien to collect any unpaid deductibles or co-pays sought in its counterclaim. The trial court denied Kight's motion for summary judgment on his claim for attorney fees pursuant to OCGA § 13–6–11, and denied the Hospital's motion for summary judgment on all issues. In June 2012, the trial court entered an order (pursuant to consent of the parties) dismissing with prejudice Kight's remaining counts in the complaint (except the count seeking attorney fees and expenses), and ruling that Kight owed the Hospital the $863.10 amount sought in its counterclaim for unpaid deductibles and co-pays, but with payment deferred until resolution of Kight's claim for attorney fees and expenses. In August 2012, the trial court appointed a special master to conduct a hearing and rule on Kight's claim for attorney fees and expenses pursuant to OCGA § 13–6–11, and on October 9, 2012, after an evidentiary hearing, the special master awarded Kight attorney fees in the amount of $40,950 and expenses in the amount of $3,376.60. On October 29, 2012, the trial court entered its final judgment in the case adopting the special master's award subject to a set-off in the amount of $863.10 in favor of the Hospital.

1. The Hospital contends that the trial court erred by granting partial summary judgment in favor of Kight on his claims that the hospital lien filed on March 21, 2007, pursuant to OCGA § 44–14–470(b) was invalid and void on the basis that, when the lien was filed, there was no debt owed to the Hospital for the care furnished to Kight under the contract with Blue Cross.

Kight was a member of the Blue Cross managed health care insurance plan, and the hospital care furnished to Kight for injuries he suffered in the accident was covered under a contract between the Hospital and Blue Cross. Under the contract, the Hospital agreed to discount its billed charges for covered hospital care and accept the discounted amount as "payment in full" for the covered care provided to Blue Cross members. The contract allowed the Hospital to bill Kight directly for deductibles and co-pays owed by Kight to the Hospital, but the Hospital agreed under the contract not to balance-bill Kight for the difference between the Hospital's billed charges and the discounted amount due under the contract.

The record shows that, after the automobile accident, Kight initially received hospital care for the period from February 4, 2007, until he was discharged on February 8, 2007. Under the contract with Blue Cross, the Hospital's billed charges during that period were initially stated as $35,294.49 but were subsequently adjusted to show billed charges of $34,794.49. Pursuant to the contract, the Hospital "wrote off" $23,603.81 of the charges for that period resulting in a discounted amount due to the Hospital under the contract of $11,190.68, plus $500 in deductibles or co-pays owed to the Hospital by Kight. On March 6 and 7, 2007, the Hospital received insurance payments in the amount of $11,690.68 in full payment of amounts due under the contract for that period—$10,000 from the tortfeasor's medical payments insurance coverage (which was considered primary insurance under the contract) and $1,690.68 from Blue Cross. The payment of $1,690.68 from Blue Cross included $500 retained by the Hospital to cover deductibles or co-pays owed by Kight. A subsequent audit resulted in a refund to Blue Cross in November 2007 and recognized that Kight was still responsible for deductibles or co-pays for the care provided from February 4 to February 8. But at the time the Hospital filed the lien on March 21, 2007 (for hospital care furnished from February 4 thru February 20) the Hospital's records reflected that no amounts were owed under the Blue Cross contract for initial care provided from February 4 to February 8.

Subsequent to February 8, Kight received additional care furnished by the Hospital for his injuries. On February 15, 2007, Kight received care resulting in billed charges of $294 discounted to $119.98 and paid by Blue Cross on March 30, 2007, and a deductible or co-pay owed by Kight of $85.82. On February 20, 2007, Kight received care resulting in billed charges of $345.39 discounted to $141.12 and paid by Blue Cross on March 30, 2007, and a deductible or co-pay owed by Kight of $100.66. On February 27, 2007, Kight received care resulting in billed charges of $252 discounted to $141.12 and paid by Blue Cross on March 30, 2007, and a deductible or co-pay owed by Kight of $35.28. On March 2 to March 15, 2007, Kight received care resulting in billed charges of $1,124.45 discounted to $629.58 and paid by Blue Cross on April 30, 2007, and a deductible or co-pay owed by Kight of $157.40. And on April 3 to April 5, 2007, Kight received care resulting in billed charges of $599.60 discounted to $335.78 and paid by Blue Cross on May 16, 2007, and a deductible or co-pay owed by Kight of $83.94. Accordingly, for hospital care furnished from February 4 to April 5, 2007, Kight owed the Hospital a total of $863.10 in deductibles or co-pays, the same amount the Hospital sought from Kight in its counterclaim, and the same amount that the trial court awarded to the Hospital in the consent order on the counterclaim and in the final judgment.

Pursuant to OCGA § 44–14–471(b), the Hospital filed the lien on March 21, 2007, stating "the amount claimed to be due for the hospital ... care" ($36,177.68); stating "the dates of admission and discharge of the patient" (from February 4 to February 20, 2007) for the furnished care; and showing that the lien was filed, as required, "within 75 days after the person has been discharged ..." As shown above, when the Hospital filed the lien, the amount still owed to the Hospital under the Blue Cross contract for care furnished from February 4 to February 20 was $261.10 in unpaid discounted payments due from Blue Cross, and $186.48 in unpaid deductibles or co-pays due from Kight. During that period, there were also unpaid "write-offs" from the Hospital's billed charges: $23,603.81 written off for treatment furnished from February 4 to February 8, and $378.29 written off for additional treatment furnished between February 8 and ...