University of South Alabama Hospitals v. Angela Blackmon

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REL: 10/09/2009 Notice: T h i s o p i n i o n i s s u b j e c t t o formal r e v i s i o n b e f o r e p u b l i c a t i o n i n t h e advance s h e e t s o f Southern R e p o r t e r . R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e R e p o r t e r o f D e c i s i o n s , Alabama A p p e l l a t e C o u r t s , 300 D e x t e r A v e n u e , M o n t g o m e r y , A l a b a m a 3 6 1 0 4 - 3 7 4 1 ((334) 2 2 9 - 0 6 4 9 ) , o f a n y t y p o g r a p h i c a l o r o t h e r e r r o r s , i n o r d e r t h a t c o r r e c t i o n s may b e made b e f o r e t h e o p i n i o n i s p r i n t e d i n Southern R e p o r t e r . ALABAMA COURT OF CIVIL APPEALS OCTOBER TERM, 2009-2010 2080322 U n i v e r s i t y o f South Alabama H o s p i t a l s v. Angela Blackmon Appeal from Mobile C i r c u i t (CV-08-900168) Court THOMPSON, P r e s i d i n g J u d g e . University from the t r i a l reasonable to o f South court's charge Alabama Hospitals judgment h o l d i n g f o rc e r t a i n medical ("USAH") that $32,274 s e r v i c e s USAH Angela Blackmon. I n t h e judgment, t h e t r i a l appeals court was a rendered ordered 2080322 Blackmon to hospital lien In July driving at an a u d i t one more satisfaction when t h e v a n the two she tires on she had 1975, did USAH not a a van s c e n e on and was sufficient Pursuant hospital to lien for those indicating evidence the balance was the payment account had r e v e a l e d she surgery have filed to recover USAH p r e s e n t e d and t h a t of Blackmon weeks. f o r USAH's s e r v i c e s . f o r $53,449.20 credits of than and t o pay of Blackmon's certain injured t o USAH, w h e r e time, At t r i a l , in t r a n s p o r t e d from the accident A l a . Code Blackmon services. that that Blackmon s h e owed on t h e was lien $52,052.95. In USAH, the the USAH her. was after for resources 35-11-370, against was Blackmon over to against 65 n e a r A t m o r e uninsured due 2004, hospitalized financial $32,274 B l a c k m o n was Interstate § the USAH h a d rolled exploded. was pay February and she services $23,843.63. 2005, underwent rendered USAH filed Blackmon a second during was surgery. that a second again 1 hospitalized The charges hospitalization lien against at for totaled Blackmon. By Although the r e c o r d i s not c l e a r , i t appears from B l a c k m o n ' s b r i e f t h a t t h e s e c o n d s u r g e r y was r e l a t e d t o t h e J u l y 2004 a c c i d e n t . 1 2 2080322 that time, from h o w e v e r , B l a c k m o n was e l i g i b l e Medicaid. payment Medicaid satisfied sued the manufacturer exploded, and t h e p a r t i e s settlement agreement. deposited with determination held the clerk as reasonable part of of the tire lien the a had trial $ 4 8 , 0 0 0 was court pending against Blackmon. The t r i a l of the reasonableness court lien judgment. This court at that court action against determined had lacked t h e amount Blackmon's lien claims amount. dismissed that related, USAH court o f USAH's the tire $ 2 4 , 5 8 6 was a subject-matter the t i r e had not been Blackmon, holding and from that that the jurisdiction to the settlement because of manufacturer, reduced r e q u i r e d b y § 3 5 - 1 1 - 3 7 3 , A l a . Code 1 9 7 5 . Alabama Hosps. v. appealed the appeal, of the l i e n against a a m o u n t o f c h a r g e s made t h e Blackmon's The t r i a l that a m o u n t f o r B l a c k m o n t o p a y f o r USAH's t r e a t m e n t USAH's determine of on t h e i s s u e manufacturer. USAH's with i n that case reached a c o n f i d e n t i a l of the "reasonable" a hearing trial lien Pursuant t o t h e agreement, f o r USAH's f i r s t charges set the second benefits o f $10,981.58. Blackmon basis to receive to which t o a judgment, University as of South 987 S o . 2 d 1 1 3 8 , 1142 ( A l a . C i v . 3 2080322 App. 2007). USAH then filed the instant action seeking a declaration of the reasonable value of the services to during Blackmon At trial, her f i r s t USAH's and c o l l e c t i o n s that, like testified table as t h e "Charge list known of the charges provides. hospitalization. credit Englestead, item Master which itemizes charges. training and e x p e r i e n c e , she b e l i e v e d t h e Charge were uses confidential the hospital that, based upon h e r that the charges reasonable. listed On c r o s s - e x a m i n a t i o n , E n g l e s t e a d s a i d t h a t i f a c h a r g e a p p e a r s on t h e C h a r g e then Master, i t i s reasonable. Englestead Blackmon's was a said first conducted Master. as a a p p r o x i m a t e l y 12,000 Englestead testified Master Teresa USAH i s a and s e r v i c e separate on manager, a l l hospitals, Master," f o r each USAH's C h a r g e rendered that i n October s u r g e r y and h o s p i t a l i z a t i o n , on a l l USAH's charges None o f t h e c h a r g e s b i l l e d result of that increased. Englestead auditor works who determined that 2004, t h r e e months audit. testified f o r USAH, every In an o u t s i d e listed on t o Blackmon fact, that four Joan were was 4 confirmed audit Charge reduced charges Platt, reviewed Blackmon's charge the after by a were nurse account a and treating 2080322 physician's order. USAH r e d u c e d that USAH was charged c h a r g e markup of than double the gives she customary. a 221%, cost 30% discount discount the Englestead $5,200 a also on more t h a n cost to for to that $2,085 and rod. She Englestead do so is also charges, of Alabama has a matter she had that's for s a i d that Blackmon's a t t o r n e y course turned and Blackmon the worker's had that fair, offered "because gets of a more said reasonable, that the as a that i t charges p a t i e n t s a discount testified State hospital for was the however, $1,000. the arm i t pays f o r items. patients audit, not-for-profit hospital, meaning said, She the Platt's i n Blackmon's USAH, uninsured because, that Blackmon that r e s u l t of c h a r g e s by verified implanted acknowledged she a Blackmon's Englestead rod As 2 same comp." down that offer. Donald testified on the the Ching, the d i r e c t o r of t h a t , b a s e d upon h i s e x p e r i e n c e , Charge M a s t e r were charge amount for reasonable. individual financial the systems, charges He could not items, but, he listed identify said, he applying "a The p a r t i e s s t i p u l a t e d t h a t E n g l e s t e a d c o u l d t e s t i f y r e s u l t s o f t h e a u d i t t h a t P l a t t had p e r f o r m e d . to thought "the system" t h a t developed the 2 the USAH's 5 c h a r g e s by 2080322 factor to the cost of He said that reasonable. charges every t i m e . " had been marked up for which charges All "large such testified that her b i l l , As to hospitals, he more Ching charged Ching plans t o pay is are as required 227%; $9, C h i n g hospitals was reasonable Ambien that sleeping that Blue and such amount approximately Medicaid, Cross/Blue the f u l l that how as pill those f o r the 90% of private Shield United amount patient USAH's was and Health that 300% and Care--are not Ching that USAH's i n Mobile also t o pay h i s discount. those of other USAH's " c o s t - t o - c h a r g e " r a t i o the average and to USAH's Aetna, given a compared same insurance of the charges. generally charges Ching s a i d that than same i f a n u n i n s u r e d p a t i e n t was w i l l i n g stated said "produces s a i d he b e l i e v e d the said, payors"--Medicare managed-care or system operations" reasonable. However, companies the 1,000% and a 10-cent patients services. hospital's G i v e n t h e e x a m p l e s o f a $1 b a n d - a i d USAH c h a r g e d were the that ratio the charges County. 6 f o r Alabama national are less average than those was hospitals is 245%. of other 2080322 After the $ 3 2 , 2 7 4 was hearing, a reasonable the t o B l a c k m o n , and USAH o u t of appealed, to constituted The i t ordered funds being held contending that there support the court determined fee f o r the medical provided the trial trial court's was s e r v i c e s USAH t h a t a m o u n t t o be by the that had paid to clerk. USAH f a c t u a l or no circuit legal basis determination that reasonable charges in this case. hospital-lien statute reads $32,274 follows: as "Any person, firm, hospital authority or corporation operating a hospital in this state shall have a l i e n f o r a l l r e a s o n a b l e charges f o r h o s p i t a l c a r e , t r e a t m e n t a n d m a i n t e n a n c e o f an i n j u r e d p e r s o n who entered s u c h h o s p i t a l w i t h i n one week a f t e r r e c e i v i n g s u c h i n j u r i e s , upon any and a l l a c t i o n s , claims, counterclaims and demands a c c r u i n g t o the p e r s o n t o whom s u c h c a r e , t r e a t m e n t o r m a i n t e n a n c e was furnished, or accruing to the legal representatives of such person, and upon a l l judgments, settlements and settlement agreements entered into by virtue thereof on account of injuries giving rise to such actions, claims, counterclaims, demands, j u d g m e n t s , s e t t l e m e n t s or settlement a g r e e m e n t s and w h i c h n e c e s s i t a t e d such h o s p i t a l c a r e , s u b j e c t , h o w e v e r , t o any attorney's lien." § 35-11-370 (emphasis conceded t h a t the only the added). l i e n had reasonableness At the been p r o p e r l y of USAH's 7 hearing, filed; charges. she Blackmon challenges 2080322 Whether unpaid be § charges deemed a 35-11-370 entitles f o r w h i c h i t has 'mixed question' U n i v e r s i t y of Alabama Hosp., So. 3d , USAH billed of law [Ms. ( A l a . C i v . App. to collect Blackmon and "may fact." 2070256, A p r i l a l l properly Roberts 18, the v. 2008] 2008). " A p p e l l a t e c o u r t s p r o p e r l y apply a presumption of correctness to factual determinations of trial c o u r t s , even i n the c o n t e x t of mixed q u e s t i o n s of l a w a n d f a c t ( s e e P a t e [ v . R a s c o ] , 656 So. 2d [855] at 857 [(Ala. Civ. App. 1995)]), although determinations on questions of law are properly g i v e n no s u c h p r e s u m p t i o n . See A l a b a m a F a r m B u r e a u Mut. Cas. I n s . Co. v . C a i n , 387 So. 2d 1 9 5 , 197 (Ala. 1980) ( i n o r d e r t o r e v e r s e j u d g m e n t on i s s u e i n v o l v i n g m i x e d q u e s t i o n o f law and f a c t , reviewing c o u r t need o n l y c o n c l u d e 'that [ i t ] d i f f e r [ s ] w i t h the trial court, not on the facts, but on i t s a p p l i c a t i o n of the law to those facts')." Roberts, The So. facts case. James accident 3d and fault. the are Virginia i n which at the U n i v e r s i t y of hospital . i n Roberts was the unpaid at The Roberts driver Robertses Alabama similar of were a to those were second Hospital for a lien on any 8 money a the instant motor-vehicle vehicle immediately charges f o r s e r v i c e s provided placed in of apparently transported treatment. To to the Robertses, the Robertses to cover the might 2080322 recover at from t h e t o r t f e a s o r who had caused the a c c i d e n t . . At issue in Roberts was what constituted c h a r g e s " f o r the c a r e the h o s p i t a l had p r o v i d e d . p r e s e n t e d e v i d e n c e i n d i c a t i n g t h a t i t had b i l l e d only for services charges the court Id. f o r those hospital's held that were m e d i c a l l y services Charge had been Master. necessary the Citing charges prior "reasonable The the and hospital Robertses that set f o r t h caselaw, that "evidence from h o s p i t a l p e r s o n n e l c o n c e r n i n g the reasonableness of treatment r e n d e r e d and charges billed to p a t i e n t s i s competent to demonstrate 'reasonable charges' to which a h o s p i t a l l i e n , under § 35-11-370, w i l l e x t e n d . See J o h n s o n v. H e a l t h C a r e A u t h . o f H u n t s v i l l e , 660 So. 2 d 1 0 1 7 , 1018-19 (Ala. C i v . App. 1995) ( a f f i r m i n g summary j u d g m e n t f o r h o s p i t a l o p e r a t o r on c l a i m t h a t c h a r g e s i n c l u d e d in hospital lien were unreasonable based upon u n r e b u t t e d a f f i d a v i t s of h o s p i t a l ' s n u r s e manager and b u d g e t c o o r d i n a t o r c o n c e r n i n g r e a s o n a b l e n e s s o f charges); see a l s o Ex p a r t e U n i v e r s i t y o f South Alabama, 737 So. 2d 1049, 1053 (Ala. 1999) (unrebutted testimony of acting director of h o s p i t a l ' s business s e r v i c e s that h o s p i t a l ' s charges for services rendered to injured party were r e a s o n a b l e was evidence that supported h o s p i t a l ' s entitlement to judgment as a matter of law on quantum-meruit c l a i m ) . T h u s , t h e h o s p i t a l made a prima f a c i e showing of e n t i t l e m e n t to h o s p i t a l l i e n s i n t h e amounts d e t e r m i n e d by t h e t r i a l court." Roberts, So. 3d at . 9 the on this 2080322 To rebut reasonable, accepted were the h o s p i t a l ' s less insured Medicaid. than the f u l l by c o m m e r c i a l The t r i a l be o f no p r o b a t i v e of the 'reasonable at preclude pay that . This value court i t s charges were to patients carriers concerning assessed such evidence the ultimate question against the t r i a l insureds' the Robertses." court's decision to bills. We could explained follows: "The trial court's decision not to deem persuasive e v i d e n c e o f sums p a i d t o t h e h o s p i t a l u n d e r d i f f e r e n t f i n a n c i n g schemes does n o t amount t o reversible error. As t h e [ h o s p i t a l ' s financial] d i r e c t o r explained i n h i s testimony, the h o s p i t a l ' s a c c e p t a n c e o f l o w e r payments from B l u e C r o s s and B l u e S h i e l d , M e d i c a r e , and M e d i c a i d p a t i e n t s stemmed from l e g a l and c o n t r a c t u a l r e q u i r e m e n t s t h a t a p p l i e d s o l e l y t o t h o s e c l a s s e s o f p a t i e n t s . ... "Our c o n c l u s i o n that the t r i a l court could properly disregard evidence of the hospital's p r a c t i c e of accepting l e s s than f u l l reimbursement from third-party payors i n other contexts is consistent with decisions i n other states. For example, in Parnell v. Madonna Rehabilitation H o s p i t a l , I n c . , 258 N e b . 1 2 5 , 602 N.W.2d 461 ( 1 9 9 9 ) , t h e N e b r a s k a Supreme C o u r t r e j e c t e d as i n c o n s i s t e n t 10 as such o f t h e amounts t h i r d - p a r t y p a y o r s their who s u c h as M e d i c a r e h o w e v e r , "deemed affirmed hospitals to s a t i s f y as charged health-insurance court, charges' consideration holding amount S h i e l d and government p a y o r s to Id. that the Robertses e l i c i t e d testimony that the h o s p i t a l Blue Cross/Blue and assertion 2080322 w i t h t h a t s t a t e ' s h o s p i t a l - l i e n s t a t u t e s an argument s i m i l a r t o t h a t made b y t h e R o b e r t s e s , i . e . , t h a t the 'usual and customary charges' o f t h e h o s p i t a l t r e a t i n g a p a t i e n t i n j u r e d by a t o r t f e a s o r s h o u l d be l e s s than the b i l l e d charges: "'Parnell contends that because Madonna o f t e n r e c e i v e s l e s s t h a n t h e f u l l amount of i t s billings f o r services p r o v i d e d t o p a t i e n t s covered by m e d i c a i d , medicare, and workers' compensation, t h e "usual and customary charges" of the h o s p i t a l a r e l e s s t h a n t h e amount t h a t i t b i l l s to patients. "'In t h e absence of anything to the c o n t r a r y , s t a t u t o r y l a n g u a g e i s t o be g i v e n its plain and ordinary meaning; an appellate court will not resort to i n t e r p r e t a t i o n t o a s c e r t a i n t h e meaning o f s t a t u t o r y words which a r e p l a i n , direct, and unambiguous. Section 5 2 - 4 0 1 [ , Neb. Rev. Stat.,] p l a i n l y states that a l i e n attaches to "the usual and customary c h a r g e s " o f t h e s e r v i c e p r o v i d e r . (Emphasis s u p p l i e d [ i n P a r n e l l ] . ) However, P a r n e l l ' s interpretation would require that the amounts a c t u a l l y c o l l e c t e d b y a s e r v i c e provider be c o n s i d e r e d instead of the amount c h a r g e d . Such an i n t e r p r e t a t i o n i s contrary t o the p l a i n language of the statute.' "Parnell, 258 N e b . a t 12 9-30, 602 N.W.2d a t 464 (citations omitted); see also Parnell v . Good S a m a r i t a n H e a l t h S y s . , I n c . , 260 N e b . 8 7 7 , 8 8 0 , 620 N.W.2d 3 5 4 , 357 ( 2 0 0 0 ) ( d e c l i n i n g t o r e c o n s i d e r t h a t p r i n c i p l e of law). To l i k e e f f e c t i s H i l l s b o r o u g h C o u n t y H o s p i t a l A u t h o r i t y v . F e r n a n d e z , 664 S o . 2 d 1071 ( F l a . D i s t . C t . App. 1995), i n which a F l o r i d a appellate court held that evidence of discounts extended by a h o s p i t a l t o p a t i e n t s enrolled i n 11 2080322 health-maintenance organizations and preferred-provider organizations and to patients eligible for Medicare, Medicaid, and workers' compensation b e n e f i t s d i d not s u f f i c i e n t l y s u p p o r t a judgment r e d u c i n g a h o s p i t a l l i e n extending to ' a l l reasonable c h a r g e s ' b y 38 percent. "We note t h a t o t h e r c o u r t s have h e l d improper c e r t a i n h o s p i t a l s ' p r a c t i c e s of 'balance billing' patients enrolled in health-maintenance or preferred-provider organizations or receiving medical benefits pursuant to a governmental e n t i t l e m e n t so t h a t t h e h o s p i t a l s m i g h t r e c o v e r the d i f f e r e n c e between the lower c o n t r a c t or l e g a l r a t e o f r e i m b u r s e m e n t and t h o s e h o s p i t a l s ' u s u a l c h a r g e s . S e e , e . g . , P a r n e l l v . A d v e n t i s t H e a l t h S y s . / W e s t , 35 C a l . 4 t h 5 9 5 , 609, 109 P.3d 69, 79, 26 C a l . R p t r . 3d 569, 581 (2005). H o w e v e r , we are aware of no r e p o r t e d c a s e , and t h e R o b e r t s e s have c i t e d none, i n which a patient outside such o r g a n i z a t i o n a l or g o v e r n m e n t a l c o v e r a g e s has been a l l o w e d to take advantage of such p r e f e r r e d r a t e s of reimbursement in order to retain a greater share of a tort r e c o v e r y at the expense of a t r e a t i n g h o s p i t a l . " Roberts, So. In t h i s case, trial court's total charge e n j o y e d by and by 3d at the . record determination except f o r the governmental provides of large preferred-provider Shield. reported As s t a t e d by cases the i n Alabama such basis as rates of Medicaid i n which court, we a patient for the reasonable reimbursement and p a y o r s s u c h as B l u e Roberts 12 other what c o n s t i t u t e d a preferred groups no are not Medicare Cross/Blue aware of no covered by 2080322 insurance proof has that In been allowed t o use the charges b i l l e d Hillsborough Fernandez, County 664 So. 2d 1071 General Hospital argued finding the charges were u n r e a s o n a b l e the patient had preferred t o them were (Florida) i t had the Hospital trial billed and i n r e d u c i n g that rates Authority 1995), court had the by 38%. charges the At her were unreasonable because payors received discounts f o r the plan participant. and held, discounts without agreed with that evidence e n j o y e d by managed-care p a y o r s , insufficient to prove that the had managed-care court discussion, trial, hospital against The F l o r i d a a p p e l l a t e in patient levied 1071-72. v. Tampa erred to a private-pay i t slien as unreasonable. ( F l a . D i s t . C t . App. that argued those the h o s p i t a l of contractual standing hospital's Id. at alone, charges was were unreasonable. I n Ex p a r t e 1053 ( A l a . 1999), testimony services the U n i v e r s i t y o f S o u t h A l a b a m a , 737 S o . 2 d 1 0 4 9 , from that patient the our supreme hospital's court acting held that director unrebutted of the h o s p i t a l ' s charges f o r s e r v i c e s were reasonable summary j u d g m e n t i n f a v o r was sufficient to business rendered to sustain o f t h e h o s p i t a l on t h e i s s u e 13 a of the 2080322 reasonableness of Medical East, 1998), Center charges. I n c . , 709 Likewise, So. o u r supreme c o u r t d e t e r m i n e d a prima the those facie director charges showing that of patient were t h a t t h e h o s p i t a l h a d made were testified to rebut that prima affirmed t h e summary j u d g m e n t d i s b u r s i n g In t h i s lien reasonable that Because the p a t i e n t evidence amount o f t h e c h a r g e s v. 1209, 1221-22 ( A l a . i t s charges accounts reasonable. 2d i n Joiner facie showing, when the claimed presented no o u r supreme c o u r t to the hospital the assessed. c a s e , USAH p r e s e n t e d e v i d e n c e i n d i c a t i n g t h a t t h e a g a i n s t B l a c k m o n was b a s e d upon c h a r g e s Charge Master and t h a t those charges reasonable. USAH also cost-to-charge ratio cost-to-charge offered ratio of other i n USAH's had been a u d i t e d and were evidence was i n l i n e listed with--if hospitals indicating that i t s not lower than--the i n i t s area. addition t o showing the discounts provided to patients charges were by paid insurance or Medicaid or In whose Medicare, B l a c k m o n p r e s e n t e d e v i d e n c e o f a s u b s t a n t i a l m a r k u p o n some o f the items evidence f o r which tending s h e was to charged; indicate unreasonable. 14 that however, there USAH's markups was no were 2080322 Because Blackmon showing that no basis USAH's upon w h i c h to against the 62% enter Pittman, Bryan, evidence of the and J . , concurs trial Accordingly, amount rebut made t h e USAH's court basis charges of at $32,274, USAH's lien consistent with this J J . , concur. specially. 15 of judgment against the cause i s remanded f o r the Moore, had the REMANDED. Thomas, and to the charges reasonable a judgment R E V E R S E D AND the Blackmon. Blackmon, i s reversed, to reduce hospital's approximately court no i t s c h a r g e s were r e a s o n a b l e , lien setting presented opinion. trial 2080322 BRYAN, J u d g e , concurring specially. B e c a u s e I am c o n s t r a i n e d by t h e h o l d i n g s o f t h e supreme c o u r t i n Ex p a r t e U n i v e r s i t y o f S o u t h A l a b a m a , 737 So. 2d 1049 ( A l a . 1 9 9 9 ) , a n d J o i n e r v. M e d i c a l C e n t e r E a s t , 2d 1209 ( A l a . 1 9 9 8 ) , I c o n c u r . 16 I n c . , 709 So.

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