Krobath v South Nassau Communities Hosp.
Annotate this CaseDecided on November 30, 2016
Supreme Court, Nassau County
Eric Krobath, on behalf of himself and all others similarly situated, Plaintiff,
against
South Nassau Communities Hospital, a New York Corporation; and Does 1 through 25 inclusive, Defendants.
602113/15
Giskan, Solotaroff & Anderson LLP
Attorney for the Plaintiff
11 Broadway, Suite 2150
New York, New York 10004
Ph: (646) 336-4904
Garfunkel Wild, P.C.
Attorney for the Defendant
11 Great Neck Road
Great Neck, New York 11021
Ph: (516) 393-2200
Randy Sue Marber, J.
Papers Submitted:
Notice of Motion x
Affirmation Oren Giskan x
Affirmation in Opposition x
Memorandum of Law x
Reply Memorandum of Law x
Upon the foregoing papers, the motion by the plaintiff, Eric Krobath, on behalf of himself and all others similarly situated, for an Order of this Court , pursuant to CPLR Article 9, granting [*2]his motion for class certification is determined as hereinafter provided.
The Plaintiff commenced the underlying action in this Court in April, 2015 against the Defendant, South Nassau Communities Hospital, ("Hospital") a New York Corporation; and John Does 1 through 25, inclusive. Therein he challenged the Defendant, Hospital's alleged "unreasonable, unconscionable and unlawful pricing, billing and collection practices for emergency care with respect to the plaintiff and other self-pay patients."
Specifically, the Plaintiff presented at the Defendant Hospital's emergency room in October, 2014 with "extreme pain", "possibly" from a "kidney stone". Although he indicated that he had insurance coverage during his deposition testimony (see Affirmation in Opposition, Exhibit A, Tr. Krobath, p. 68, ln. 10-14), the Plaintiff claims that he was determined to be a "self-pay" patient. He then executed the "Emergency Department/Inpatient Authorization for Treatment" ("Agreement") form. The Agreement's paragraph at issue is provided in relevant part herein:
"...5. FINANCIAL AGREEMENT:... "I agree to pay all amounts for which I am financially responsible, due for services presented in accordance with the rates and terms of the Hospital. I understand that to the extent permitted by law, where insurance or other third-party benefits are insufficient to pay for all of my ...Hospital and/or practitioner services rendered, that I will be responsible for the payment of any balances due as determined by the [respective provider of services..."The Plaintiff claims that after he was treated and released by the Defendant Hospital, he was billed for the subject emergency services in the base amount of $7,137.79. Because he regarded that amount to be excessive, unfair, and unconscionable, he commenced the underlying action alleging causes of action in negligent concealment, intentional concealment, unfair and deceptive business acts in violation of GBL §349.
The Defendants moved this Court for dismissal of the Plaintiff's complaint, under CPLR §§ 3211 (a) (1) and (a) (7), which was denied in its entirety by this Court in its October 16, 2015 Order.
The crux of the Plaintiff's argument that the action should be commenced on behalf of similarly-situated self-pay patients, is that health insurers negotiate reduced rates with the Defendant Hospital and because self-pay patients do not have the same opportunity to negotiate, they are charged at a rate that is three-times higher than the Hospital's actual cost, which is referenced as "Chargemaster rates". He further contends that these rates are not published and the excessive charges purport to "boost third party reimbursement rates" and "reflect a higher level of charity contribution and financial assistance given to the local community".
In opposition, the Defendants contend that the Plaintiff does not meet the criteria for class certification under CPLR § 901 in that the Plaintiff is "fundamentally" detached from the underlying litigation, unable to supervise his attorneys, and is unsuitable to serve as a class representative. Further, his claims and defenses are not typical of the so-called aggrieved class, and the predominance requirement is not satisfied.
Article 9 of the CPLR is to be "liberally construed" (see Friar v. Vanguard Holding Corp.,, 78 AD2d 83 [2d Dept. 1980]). CPLR § 901 provides in relevant part:
"...One or more members of a class may sue or be sued as representative parties on behalf of all if:1. the class is so numerous that joinder of all members, whether otherwise required or permitted, is impracticable;2. there are questions of law or fact common to the class which predominate over any questions affecting only individual members;3. the claims or defenses of the representative parties are typical of the claims or defenses of the class;4. the representative parties will fairly and adequately protect the interests of the class; and5. a class action is superior to other available methods for the fair and efficient adjudication of the controversy..." ( NY C.P.L.R. 901 (McKinney)The Second Department declared that courts should generously construe the CPLR § 901 (a) criteria "because it is apparent that the Legislature intended Article 9 to be a liberal substitute for the narrow class action legislation which preceded it." (see CPLR § 901 (McKinney) Commentary) In addition, the determination to grant class action certification rests in the sound discretion of the trial court. The primary issue on a motion for class certification is whether the claims as set forth in the complaint can be efficiently and economically managed by the court on a classwide basis. The class representative has the burden of establishing the prerequisites of certification. (see Friar v. Vanguard Holding Corp, supra)
In evaluating the issue at bar, this Court is guided by Globe Surgical Supply v. GEICO Ins. Co., 59 AD3d 129. There, the plaintiff and assignee of the insured, alleged that the insurer "ceased paying claims in accordance with the terms of the [No Fault] regulations and ... instituted a systematic pattern and practice of reviewing claims for reimbursement against what it deemed to be the 'prevailing rate in the geographic location of the provider". The plaintiff further alleged that there was no justification, legal or otherwise, for the insurer to review and issue reimbursement in the manner that it elected to do so.
The assignor, a GEICO policy holder, was injured in an accident and purchased medical equipment from the assignee. The equipment cost $340, and the claim was submitted to GEICO in the amount of $510, representing the standard industry mark-up for suppliers. GEICO denied the claim for that amount and only reimbursed the plaintiff in the amount of $200 because it determined that the submitted cost submitted was "far in excess of the industry average" which was $107.82 at that time. (see Globe Surgical Supply v. GEICO Ins. Co., supra)
The factor common to the proposed class was that all members' claims were denied because GEICO found them to be in excess of the industry average. Similarly, the self-pay patients of the Defendant Hospital were being billed at a much higher rate than other patients, and the cost of services rendered to such patients was not made known or posted in any conspicuous place.
The Geico defendant and the instant Defendants, in opposing the proposed class action designation, argued that the calculation of individual damages precluded such certification. The court, however, determined that such issue is not dispositive of the issue of class certification, and is clearly manageable. Said another way, that individuals who are members of the class might have been subjected to less than all of the conduct complained of is not a ground for denying class action. Whatever differences there are, they do not override the common questions of law and fact. As noted, subclasses may be created to deal with the differences. (see Weinberg v. Hertz Corp., 116 AD2d 1 [1st Dept. 1987])
In light of the foregoing, the court must be convinced that the proposed class is capable of being identified. As in Geico, the class has been clearly defined as all persons who had reimbursement payments of claims for medical equipment and supplies which were adjusted or [*3]reduced to an amount less than the amount charged in the proof of claim based on an "industry average". Here, the class is identified and ascertainable as self-pay patients who are subject to the terms of the Agreement at issue, and have been charged at "Chargemaster" rates.
As to common questions of law or fact, in Friar v. Vanguard Holding Corp., supra, the court held that the determination of whether there is a common predominating issue of fact or law should be based on whether the use of a class action would achieve economies of time, effort, and expense, and promote uniformity of decision as to persons similarly situated. In order to certify a lawsuit as a class action, the court must be satisfied that questions of law or fact common to the class predominate over any question affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. (see CPLR 901 [a]; Friar v. Vanguard Holding Corp.,supra)
This Court agrees that class actions may not be maintained where wrongs asserted are individual to different persons involved and each of the persons aggrieved may determine for himself the remedy which he will seek and may be subject to a defense not available against others. (see Gaynor v. Rockefeller, 15 NY2d 120 [1965]) However, while the Defendants argue that individual issues exist as to what each patient's treatment and ensuing charges for treatment, they do not argue that there are distinctive agreements tailored for each patient. In other words, the alleged aggrieved patient ostensibly signs the same Agreement.
Further, much has been made of qualifications of the class representative; however, courts evaluate satisfaction of CPLR § 901 (a) (4)'s prerequisite by focusing on essentially three factors: potential conflicts of interest, personal characteristics of the proposed class representative, and the quality of class counsel (see Pruitt v. Rockefeller Center Properties, Inc., 167 AD2d 14 [1st Dept 1991], NY C.P.L.R. 901 (McKinney)).
Here, the defendants focused on the financial strength of the named plaintiff, a relevant issue because of the rule that requires the representative to pay for the costs of the action. While the defendants rely on Pruitt, a careful reading of that case indicates that financial status is only one factor to be considered in the determination of adequacy and that requiring a class representative to commit "vast financial resources" would frustrate the purpose of class actions to permit persons of modest means to vindicate their legal rights (see Pruitt v. Rockefeller Center Properties, Inc., supra) It is noted that they did not bother to cite the court's ultimate holding, where it reversed the decision of the trial court that the matter was ineligible for class certification.
The Defendants did not challenge the instant motion under the remaining criteria regarding the number of the class or the superiority of other means of redress. As such, class certification is proper in this instance.
Upon reviewing the Affirmation of Oren Giskan dated June 16, 2016 together with the unredacted Memorandum of Law attached thereto as Exhibit B and the unredacted Exhibit attached to the Affirmation as Exhibit C, submitted by the Plaintiff's counsel and reviewed in camera, the Court agrees with both counsel that the contents thereto are sensitive and proprietary information that should not be made public. The Court has considered the interests of the public as well as of the parties and finds that the sealing of the Affirmation is appropriate.
Accordingly, it is hereby
ORDERED, that the Plaintiff's motion seeking class certification is GRANTED; and it is further
ORDERED, that the class is defined as all individuals who were billed at South Nassau Community Hospital's full Chargemaster rates for emergency screening, stabilization, and/or treatment services/services at one of South Nassau Community Hospital's emergency care facilities in New York State, and who did not have their payments made by an insurer or government health care program, from April 3, 2009 to the present; and it is further
ORDERED, that the class does not include those who did not tender payment against their accounts and whose balances have been charged off in full without being subject to any present or future collection activity; and it is further
ORDERED, that the Defendant, and its officers, directors, legal representatives, heirs, successors, or assigns, and any judicial officer assigned to this matter and his/her immediate family, are also excluded from the class; and it is further
ORDERED, that the Plaintiff is authorized to give notice of the action to the individual class members by certified mail, and to provide such list of individual class members to this Court on notice within forty-five (45) days; and it is further
ORDERED, that the Plaintiff is directed to submit a proposed notice, providing for an option to opt out of the class, to the Court on notice within forty-five (45) days; and it is further
ORDERED, that the Affirmation of Oren Giskan dated June 16, 2016 together with the unredacted Memorandum of Law attached thereto as Exhibit B and the unredacted Exhibit attached to the Affirmation as Exhibit C, reviewed by the Court in camera, shall be sealed pursuant to 22 NYCRR § 216.1 and shall not be unsealed without the further Order of this Court.
This constitutes the Decision and Order of the Court.
All applications not specifically addressed herein are DENIED.
DATED: Mineola, New York
November 30, 2016
Hon. Randy Sue Marber, J.S.C.
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