Torres v. Adventist Health Sys. /W.

• Citation: 77 Cal.App.5th 500,292 Cal.Rptr.3d 557
• Decision Date: 14 April 2022
• Docket Number: F081415
• Parties: Kasondra TORRES, Plaintiff and Appellant, v. ADVENTIST HEALTH SYSTEM /WEST et al., Defendants and Respondents.
• Court: California Court of Appeals

77 Cal.App.5th 500

292 Cal.Rptr.3d 557

Kasondra TORRES, Plaintiff and Appellant,

v.ADVENTIST HEALTH SYSTEM /WEST et al., Defendants and Respondents.

F081415

Court of Appeal, Fifth District, California.

Filed April 14, 2022

Certified for Partial Publication.^*

Carpenter Law, Gretchen Carpenter, Los Angeles; Law Office of Barry Kramer and Barry L. Kramer, Los Angeles, for Plaintiff and Appellant.

Boutin Jones, Michael E. Chase and Brian M. Taylor, Sacramento, for Defendants and Respondents.

FRANSON, J.

Kasondra Torres sued defendants Adventist Health System/West and Hanford Community Hospital (collectively, Hospital), for a violation of the Consumer Legal Remedies Act (CLRA; Civ. Code, § 1750 et seq. ) and declaratory relief. Torres alleged Hospital engaged in a deceptive practice when it did not disclose its intent to charge her a substantial emergency room evaluation and management services fee (EMS Fee). In 2018, the five levels of Hospital's EMS Fees ranged from $773 to $3,206; the fee was added on top of the charges for each individual item of treatment and service provided during the emergency room visit. Torres describes the EMS Fee as a "cover charge," surcharge for overhead, or visitation fee.

Hospital moved for judgment on the pleadings, which the trial court granted. Although Torres's pleading adequately alleges Hospital failed to disclose facts that were known exclusively by Hospital and were not reasonably accessible to Torres, we conclude Torres's conclusory allegation that she relied on the failure to disclose the EMS Fee and thereafter received treatment at the Hospital does not plead the element of reliance with sufficient particularity. In the unpublished part of this opinion, we conclude Torres has not carried her burden of demonstrating the trial court erred when it denied her leave to file a third amended complaint.

We therefore affirm the judgment.

FACTS

In January 2018, Torres received emergency treatment and services at Hospital's emergency room in Hanford. The emergency room did not contain a posted notice or warning that a substantial EMS Fee would be added to Torres's bill on top of the individual charges for each item of treatment and services provided to her. Hospital presents a "Conditions of Registration" form (the Contract) to all emergency care patients, or their agents, and requests that they sign the form. A section of the form labeled "Financial Agreement" states in part:

"I accept financial responsibility for all services during this episode of care. I understand that I can expect to receive separate bills from physicians and specialty services. I agree to promptly pay all hospital bills in accordance with the regular rates and terms of the medical center and, if applicable, the medical center's charity care and discount payment policies under state and federal law."

Hospital subsequently billed Torres a gross amount (before discounts) of $23,455.73 for the treatment and services provided. The summary billing statement sent to Torres did not identify or disclose the EMS Fee. Torres requested an itemized billing statement. It included a charge for $3,878.88 described as "EMERG ROOM’ and another charge for $3,206.34 described as "ED LEVEL 5 89." Nothing in the itemized billing statement identified the "ED LEVEL 5 89" charge by its more formal description as an "Evaluation and Management Services Fee" or indicated it was added on top of the charges for individual items of treatment and services.

Hospitals are required by statute to make a copy of its "charge description master" available, either by posting an electronic copy on the hospital's Web site or by making a written or electronic copy available at the hospital. ( Health & Saf. Code, § 1339.51, subd. (a)(1).)¹ " ‘Charge description master’ means a uniform schedule of charges represented by the hospital as its gross billed charge for a given service or item, regardless of payer type" ( § 1339.51, subd. (b)(1) ) and is commonly referred to as a "chargemaster." Each year, hospitals must file a copy of their chargemaster with the Department of Health Care Access and Information formally known as the Office of Statewide Health Planning and Development (OSHPD), a department within the California Health and Human Services Agency. (§ 1339.55, subd. (a).) The OSHPD publishes the chargemasters on its Web site. (§ 1339.55, subd. (b).)

Hospital's June 2018 chargemaster contains five columns: (1) the item number, (2) "2018 Charge Codes," (3) "Charge Codes Description," (4) "HCPCS Codes,"² and (5) June 2018 prices. The "Charge Codes Description" for items 7771 through 7775 on the chargemaster are (1) "ED LEVEL 1/MSE," (2) "ED LEVEL 2 89," (3) "ED LEVEL 3 89," (4) "ED LEVEL 4 89," and (5) "ED LEVEL 5 89." The prices for these items are $773.12, $1,269.94, $1,914.59, $2,452.62, and $3,206.34, respectively.

Hospitals also are required by statute to compile and submit annually a list of 25 common outpatient procedures, along with the average charges for those procedures, to the OSHPD. ( § 1339.56, subd. (a).) The OSHPD is required to publish the information on its Web site. (Ibid. ) The items numbered 7772 through 7775 on Hospital's June 2018 chargemaster, and the corresponding charges, appear on Hospital's "AB 1045 - List of 25 Common Outpatient Procedures for 2018," under the heading "Evaluation & Management Services (CPT Codes 99201-99499)." The form describes the level 5 EMS Fee, which was the fee charged to Torres, as "high severity with significant threat."

CPT stands for "Current Procedural Terminology." Hospitals use specific CPT codes required by the "Centers for Medicare and Medicaid Services" (CMS), a federal agency within the United States Department of Health and Human Services.³ The CPT codes for Hospital's EMS Fees are 99281, 99282, 99283, 99284, and 99285; the last digit refers to the level of service provided.

PROCEEDINGS

In February 2019, Torres filed a class action complaint against Hospital containing causes of action for declaratory relief relating to the meaning of the Contract, a violation of the Unfair Competition Law (UCL; Bus. & Prof. Code, § 17200 et seq. ), and a violation of the Consumer Legal Remedies Act ( Civ. Code, § 1750 et seq. ). Each of these causes of action challenged Hospital's imposition of the substantial, unexpected EMS Fee, which was not mentioned in the Contract, posted in the emergency rooms, or verbally disclosed to her during registration.

Hospital filed an answer followed by a motion for judgment on the pleadings. Hospital supported its motion with a request for judicial notice of documents publicly available on Web sites maintained by (1) the OSHPD; (2) the State Department of Health Care Services, another department of the California Health and Human Services Agency; and (3) CMS. The documents included a portion of Hospital's 2018 chargemaster that listed the five levels of EMS Fees and Hospital's list of 25 common outpatient procedures for 2018, both of which were available on the OSHPD's Web site.

In June 2019, the trial court took judicial notice of the documents published on the OSHPD's Web site and granted Hospital's motion for judgment on the pleadings with leave to amend.

Torres filed a first amended complaint again alleging causes of action for declaratory relief and for violation of the CLRA. The declaratory relief cause of action was no longer based on the rights and duties established by the Contract, but alleged Hospital owed a duty to disclose the existence and amount of the EMS Fee. The trial court sustained a demurrer with leave to amend.

In November 2019, Torres filed a second amended complaint (SAC), which is the operative pleading in this appeal. The SAC contained causes of action for declaratory relief and for violation of the CLRA. Its class action allegations asserted that the suit was brought on behalf of Torres and all other individuals who, from February 7, 2015, to the present, received treatment at Hospital's emergency room and were charged an EMS Fee having a CPT Code of 99281, 99282, 99283, 99284 or 99285.

The SAC's allegations applicable to both causes of action asserted that it would be simple for Hospital to disclose its intent to charge a substantial EMS Fee and that Hospital had ample opportunities to make such a disclosure. As examples, the SAC alleged the EMS Fee could be disclosed in signage in or around the emergency room or could be disclosed to patients verbally or by any other means. The declaratory relief cause of action alleged that Hospital owed a duty to specifically disclose the existence and amounts of the EMS Fee charged to emergency room patients in advance of providing treatment that would trigger such a fee and sought a legal determination that such a duty existed. The CLRA cause of action alleged Hospital's practices relating to the disclosure and billing of EMS Fees violated paragraphs (5) and (14) of subdivision (a) of Civil Code section 1770 and sought injunctive relief. The declaratory relief cause of action was not based on the rights and duties established by the Contract.

Hospital answered the SAC and moved for judgment on the pleadings. Hospital supported its motion with a request for judicial notice of materials available on the OSHPD's Web site, publications issued by CMS, and legislative history for Assembly Bill No. 1627 (2003-2004 Reg. Sess.). Assembly Bill No. 1627 contained the Payers’ Bill of Rights ( §§ 1339.50 – 1339.59 ) and required, among other things, hospitals to make their chargemasters available to patients and to submit them to the OSHPD. (See §§ 1339.51, 1339.55.)

In January 2020, the trial court held a hearing on the motion for judgment on the pleadings and took the matter under submission. In April 2020, the court filed its ruling granting the motion without leave to amend.

In May 2020, the trial court filed a judgment in favor of Hospital. Torres timely appealed.

DISCUSSION

I. DUTY TO DISCLOSE EMS FEES

A. Standard of Review

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