Insurance

(Insurance)  Uninsured patient sufficiently alleges that hospital unfairly charged fees that exceeded fees accepted from patients covered by Medicare or private insurance. Dagmar Hale v. Sharp Healthcare,  2010 DJDAR  5730  (April 19, 2010).

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(Insurance)  Uninsured patient must show actual reliance on alleged misrepresentations to have standing under unfair competition. Daniel Durell v. Sharp Healthcare,  2010 DJDAR  5722  (April 19, 2010).

Dagmar Hale v. Sharp Healthcare and Daniel Durell v. Sharp Healthcare concern putative class actions related to billing practices related to the “regular” billing rate of defendant healthcare system.    Both cases involve trial court orders sustaining demurrers to Unfair Competition Law claims.     The outcomes differ based upon how the plaintiffs pled the allegations concerning the “reliance” element. 

The cases concern the basic theory that defendant engaged in deceptive and unfair practices by billing uninsured patients its full standardized rates for services, when it substantially discounts those rates for patients covered by Medicare or private insurance.  Both cases questioned, in slightly different ways, what actually constitutes the “regular rates” charged to patients. 

In the Durell opinion, the Court focused on the causation aspect of standing.  The court sustained the demurrer to the UCL cause of action based on the ground that the plaintiff lacked standing to pursue the claim.    The complaint did not allege that the plaintiff “relied on [defendant] charging its ‘usual and customary rates’ in receiving treatment.”  

The Court found the absence of allegations of “reliance” to be the key defect in plaintiff’s pleading.   The complaint did not allege that the plaintiff relied on either the defendant’s web site representations or on the language in the Agreement for Services in going to defendant’s hospital or in seeking or accepting services once he was transported there.  

The plaintiff in Dagmar Hale v. Sharp Healthcare, on the other hand, alleged facts that satisfied the Court’s examination of “injury in fact” and standing based on pleading related to the Admission Agreement.    Though thin, the Court agreed that Hale did plead a form of “reliance” sufficient to withstand demurrer.

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