Nunes v. The Hospital Committee for Livermore-Pleasanton
Areas, 2012 WL 1925537 (Cal.App. 1 Dist.)
George and Travis Nunes, father and son, filed a putative
class action against the hospital based on its alleged practice of billing
uninsured patients its full standardized rates for services. The court of appeals affirmed the dismissal of
the claims. Travis received medical
services at the hospital while uninsured.
When he was admitted, he received and signed a Financial Assistance
Notice (FAN), which states: “Financial assistance is available to low income
uninsured or under insured patients at ValleyCare Health System.” It provided a phone number that would allow
him to request an application for charity care.
He also signed a Conditions of Admission form (COA), which said: “The
undersigned agrees ... to pay the account of the hospital in accordance with
the regular rates and terms of the hospital, including its financial assistance
policies.” Other notices about the
availability of financial assistance were posted in the emergency department
and registration areas. He didn’t apply for financial assistance and his father
paid his $609 bill (he ultimately repaid his father).
Later, Travis again received medical care, for which he was
billed $5992. This time he applied for
financial assistance. After he provided
additional information at defendant’s request, he was provided 100% financial
assistance. It was undisputed that his
financial circumstances were the same both times: he was unemployed, uninsured,
and couldn’t afford care.
Plaintiffs sued, alleging that the hospital charged “unfair,
unreasonable, and inflated prices for medical care to its uninsured patients.” The so-called “regular rates” were actually
the starting point for negotiations with health insurance providers, who
negotiated reduced rates. The hospital’s
charitable policies allegedly failed to disclose that its financial assistance
program merely offered reductions from already inflated prices.
The court of appeals affirmed the dismissal of George’s
claims because he didn’t have standing; he just voluntarily loaned Travis the
money and he was insured and never qualified for or applied for financial
assistance from the hospital during the class period. Travis, by contrast, had standing but raised
no issues of material fact.
The breach of contract claim failed because it indicated that
Travis would be charged the regular rate, subject to the financial assistance
policies. Though Travis argued that an
ordinary person wouldn’t understand that “regular rate” meant a rate many times
the regular-in-the-lay-sense rate, the courts didn’t agree. Undisputedly, the hospital provided him
financial assistance the second time, and would almost certainly have done so
the first time if he’d applied given his circumstances. Since he voluntarily failed to avail himself
of the financial assistance policies, he couldn’t prove a breach of contractual
duty to bill at less than the “regular” rate.
Nor could he show a breach of the duty of good faith and fair dealing,
since nothing suggested that the hospital did anything to frustrate or
interfere with his ability to apply for or receive financial assistance.
Travis lacked standing to raise an unfair business practices
claim under the UCL because he couldn’t show causation for his claim that, by
charging uninsured patients higher rates than those it charges insured
patients, and by failing “to reasonably allow qualifying patients to understand
and avail themselves of [the financial assistance] policies,” the hospital
violated the law. The facts showed that
the hospital didn’t unfairly cause him injury or lost money. He didn’t rely on any alleged
misrepresentation, since the document he signed explicitly stated that the
regular rate included a potential for reduction through financial assistance,
nor did he allege any violation of a statute or regulation. Travis argued that the hospital failed to
disclose the full effect of failing to apply for financial assistance, but the
hospital complied with its statutory obligation to tell patients that they had
that option and was protected by the statutory safe harbor for UCL
violations. His CLRA claim failed for
the same reason: he couldn’t show that his harm stemmed from reliance on the
hospital’s deception; his problem arose solely because he failed to use the
opportunity to apply for financial assistance.
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