Sacred Heart Health Servs., Inc. v. Yankton Cnty.

• Decision Date: 18 November 2020
• Docket Number: #29153
• Citation: 951 N.W.2d 544
• Court: South Dakota Supreme Court
• Parties: SACRED HEART HEALTH SERVICES, INC., dba Avera Sacred Heart Hospital, Plaintiff and Appellant, v. YANKTON COUNTY, South Dakota, Defendant and Appellee.

951 N.W.2d 544

SACRED HEART HEALTH SERVICES, INC., dba Avera Sacred Heart Hospital, Plaintiff and Appellant,

v.YANKTON COUNTY, South Dakota, Defendant and Appellee.

#29153

Supreme Court of South Dakota.

CONSIDERED ON BRIEFS AUGUST 24, 2020

OPINION FILED November 18, 2020

ROBERT R. NELSON, Sioux Falls, South Dakota, Attorney for plaintiff and appellant.

DOUGLAS M. DEIBERT of Cadwell, Sanford, Deibert & Garry, LLP, Sioux Falls, South Dakota, Attorneys for defendant and appellee.

GILBERTSON, Chief Justice

[¶1.] Sacred Heart Health Services, Inc., d/b/a Avera Sacred Heart Hospital (Hospital), filed a declaratory judgment action against Yankton County (County) seeking a declaration of the County's liability and reimbursement for charges for the medical care and treatment of patients subject to an emergency hold, under SDCL chapter 27A-10. The parties filed cross-motions for summary judgment. The circuit court entered a memorandum decision in favor of the Hospital. The County objected and filed a motion to reconsider. After a second hearing on the motions for summary judgment, the circuit court issued a second memorandum decision in favor of the County and entered a corresponding order and judgment. The Hospital appeals. We affirm.

Facts and Procedural History

[¶2.] In February 2016, the Hospital filed a declaratory judgment action against the County seeking a declaration of the County's liability and seeking reimbursement for the hospitalization and medical treatment provided to patients, who were subject to an emergency mental illness hold, under SDCL chapter 27A-10.

[¶3.] Under SDCL chapter 27A-10, a person believed to be severely mentally ill and in need of immediate intervention, may be placed on a 24-hour emergency hold to protect the person or others from physical harm. SDCL 27A-10-19. A qualified mental health professional (QMHP) initiates the hold process and submits a petition for emergency commitment to the chair of a county's board of mental illness (Chair). Id. The patient then undergoes an evaluation, which the Chair uses to determine if the hold should continue. SDCL 27A-10-16. The evaluation is done by a QMHP at an appropriate regional facility.¹ Id. After the evaluation, the QMHP sends the findings to the Chair. SDCL 27A-10-6. The Chair then determines whether the patient meets the criteria for an involuntary commitment under SDCL 27A-1-2. If not, SDCL 27A-10-7 requires the person to be released. But if the individual meets the criteria, the Chair may order a continued hold at a regional facility pending the hearing required under SDCL 27A-10-8 before an order of involuntary commitment may be entered. While SDCL 27A-10-7 authorizes the interim hold to be at the South Dakota Human Services Center (HSC), the South Dakota Department of Social Services (DSS) has promulgated Guidelines for Medical Screening (Guidelines) as part of HSC's admission process to ensure a patient is medically cleared for transfer to HSC prior to admission. Therefore, patients who are not medically cleared for HSC are held instead at the regional facility in the interim.

[¶4.] If the Chair determines the person should be held, the person remains at the regional facility for up to five days (or up to seven days if there are weekends and holidays within this time period) during which time the person is entitled to an involuntary commitment hearing. SDCL 27A-10-8. After the hearing, the person is either released or committed and transferred to HSC once medically cleared.

[¶5.] In this matter, the twenty-three disputed claims involve the medical care provided to patients admitted and held under this process while their commitment hearings or admissions to HSC were pending. The patients’ holds ranged from a one-day period to a twelve-day period.² None of the patients qualified for an interim hold at HSC prior to a commitment. All the patients received necessary medical treatment before their commitment hearings commenced. And all twenty-three patients lacked health insurance and were indigent.

[¶6.] Prior to this action, in July 2015, the Hospital and the County attempted to settle all unpaid claims. Originally, the unpaid claims included eighty-four claims for $1,200 or less per claim, totaling $38,268.02, and twenty-three claims with larger amounts per claim, totaling $129,630.69 at the county cost rate. At the July 2015 county commission meeting, the County agreed to and paid the eighty-four smaller claims. The Hospital claims the County also agreed to pay the twenty-three larger claims by August 31, 2015, and that the Hospital waived the accrued interest on the eighty-four smaller claims contingent on the County paying these twenty-three remaining claims. The County disputes this agreement. The twenty-three larger claims remain unpaid. The County denies liability for the unpaid claims, alleging the unpaid claims are the responsibility of the Hospital or the patient.

[¶7.] In May 2018, the parties filed cross-motions for summary judgment. The circuit court first issued a memorandum decision in February 2019, granting summary judgment in favor of the Hospital and denying the County's motion for summary judgment.

[¶8.] The circuit court's first memorandum decision relied on SDCL 27A-10-5 and Doe ex rel. Tarlow v. District of Columbia , 920 F. Supp. 2d 112 (D.D.C. 2013) and determined that the County was responsible for the Hospital's billings. It based its decision on the belief that the patients were in the State's custody during the involuntary hold process and the State was required on substantive due process grounds to provide for their basic needs, such as health care. While acknowledging that SDCL chapter 27A-10 does not contain a provision specifically requiring the County to pay for medical expenses pre-commitment, the circuit court determined that the County's requirement to pay the cost of detainment under SDCL 27A-10-7 must necessarily be read to include the cost for bringing the patient to medical stability. Viewed as a substantive due process right, the court found that applying the process required under SDCL chapter 28-13, for hospitals to obtain reimbursement from a county for costs incurred for the care of indigent persons, would incorrectly shift the cost of care from the county to the patient.³ The court made additional holdings, which are not addressed by this Court.

[¶9.] The County filed a motion to reconsider the memorandum decision. The circuit court granted the motion. At the second hearing in September 2019, the circuit court entered a second memorandum decision in favor of the County.

[¶10.] The court in its second memorandum decision relied on City of Revere v. Massachusetts General Hospital , 463 U.S. 239, 103 S. Ct. 2979, 77 L. Ed. 2d 605 (1983). The court recognized that SDCL chapter 28-13 provides a procedure for medical providers to receive reimbursement from a county for the care it provides to indigent persons. However, because the Hospital did not seek reimbursement under SDCL chapter 28-13 for the costs at issue, the County had no duty to reimburse the Hospital. The court entered an order and final judgment in favor of the County. The Hospital appeals the final judgment and identified multiple issues for our review, which we restate as follows:

1. Whether the circuit court erred in granting the County's motion for summary judgment.

2. Whether the Hospital has a claim in quantum meruit for reimbursement from the County.

3. Whether the circuit court erred in granting the County's motion to reconsider.

Analysis and Decision

1. Whether the circuit court erred in granting the County's motion for summary judgment.

[¶11.] "We review a circuit court's entry of summary judgment under the de novo standard of review." Knecht v. Evridge , 2020 S.D. 9, ¶ 51, 940 N.W.2d 318, 332-33 (quoting Zochert v. Protective Life Ins. Co. , 2018 S.D. 84, ¶ 18, 921 N.W.2d 479, 486 ). The legal principles guiding our review of summary judgment are well-settled:

We must determine whether the moving party demonstrated the absence of any genuine issue of material fact and showed entitlement to judgment on the merits as a matter of law. The evidence must be viewed most favorably to the nonmoving party and reasonable doubts should be resolved against the moving party. The nonmoving party, however, must present specific facts showing that a genuine, material issue for trial exists. Our task on appeal is to determine only whether a genuine issue of material fact exists and whether the law was correctly applied. If there exists any basis which supports the ruling of the trial court, affirmance of a summary judgment is proper.

Zochert , 2018 S.D. 84, ¶ 19, 921 N.W.2d at 486 (quoting Brandt v. Cnty. of Pennington , 2013 S.D. 22, ¶ 7, 827 N.W.2d 871, 874 ). Because no material facts are in dispute, our task is to determine whether the circuit court correctly applied the law.

[¶12.] The Hospital argues SDCL chapter 28-13 applies to poor and indigent persons, not persons with a mental illness placed in an emergency hold. Because SDCL chapter 28-13 does not address mental illness, the Hospital argues this chapter cannot provide a method of payment for costs incurred in conjunction with mental illness holds. Thus, the Hospital contends SDCL chapter 27A-10, which addresses mental illness holds, is the applicable chapter. The County argues that while the hold process is encapsulated in the emergency commitment process outlined in SDCL chapter 27A-10, nothing in chapter 27A-10 precludes the application of the Hospital's procedure for obtaining reimbursement from the County for costs of care provided to indigent patients under the provisions of SDCL chapter 28-13.

[¶13.] Our analysis examines the provisions of SDCL chapter 27A-10 and SDCL chapter 28-13 to determine which party bears the burden of payment—the patient, with the Hospital having a mechanism for reimbursement from the County under SDCL chapter 28-13; or the County under SDCL chapter 27A-10. Our...