Uninsured Hospital Charges May Be ‘Unconscionable’

In a potentially significant victory for the uninsured, the high out-of-pocket charges imposed on self-pay patients for emergency room treatment may be “unconscionable” and thus illegal, a California appeals court held Wednesday.

The Fourth District Court of Appeal reinstated the class action case of Gene Moran saying he had raised sufficient evidence that out-of-pocket hospital charges by Prime Healthcare Services Inc. in Huntington Beach for self-pay patients may be unconscionable.  The ruling will force Prime Healthcare to face trial on claims its charges violate the state’s Unfair Competition Law.

The unpublished ruling was issued Sept. 14, but redesignated Oct. 5 as a published opinion, which may be cited as precedent in other cases.

People receiving medical treatment in emergency rooms who pay out of pocket can be charged substantially more for the same care as someone who is covered by either private insurance or a government-sponsored program such as Medicare or Medicaid, the court said.

Moran filed a class action after he received $10,000 in bills for three hospital treatments as a self-pay patient in 2013.  Moran maintained the charges were far in excess of what insured patients would pay. He alleged the charges violated the UCL and Consumers Legal Remedies Act.

The decision does not resolve the issue on its merits, but only resurrects Moran’s case to give him his day in court to prove the claims.

He is seeking restitution for the allegedly excessive charges and an injunction against such billing practices in the future.

Under the Hospital Fair Pricing Act, hospitals must set a schedule of costs for services and give notice of financial aid and charity policies in contracts with all patients.

Moran “has alleged that [Prime Healthcare’s] charge description master rates not only far exceed the actual cost of care and provide for a large profit margin, he further maintains the purpose of defendants’ charging excessive costs to self-pay patients is to increase the hospital’s reimbursement for medical care by dramatically increasing its profit margin for treatment to persons particularly vulnerable because they are in need of emergency medical care,” the court said.

His suit alleges the charges billed to self-pay patients seeking emergency care are discriminatory because patients rely on a reasonable belief that they would be billed at the same rates as those applicable to other patients.

Justices signing the opinion included Eileen Moore, William Bedsworth and Raymond Ikola.

Case: Moran v. Prime Healthcare Management Inc. No. G051391


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