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Friday, October 16, 2020

Cleveland Clinic's Billing Practices Under the Microscope in Class Action Suit

Posted By on Fri, Oct 16, 2020 at 1:54 PM

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A legal complaint filed in August seeks up to $5 million in damages and a permanent injunction against the Cleveland Clinic on behalf of plaintiffs who allege that the hospital's billing practices create confusion, cause undue stress and result in the financial ruin of many patients.

In Amanda van Brakle vs. Cleveland Clinic Foundation, attorneys for the potential class argue that the Clinic should be governed by the same consumer protection laws which mechanics, contractors and other personal service providers are subject to; namely, that the Clinic should be required to provide written or oral estimates of service costs and accurate receipts, which include partial payments.

The particulars of the case will no doubt sound familiar to many who have navigated the complex labyrinth of medical billing and insurance. The named plaintiff went to Cleveland Clinic's Lakewood office in the summer of 2018 for radiology  / imaging services, having been referred there by another Cleveland Clinic medical provider. She paid a $25 co-pay at the time, but received no receipt.

(The costs associated with medical care are notoriously non-transparent. Kaiser Health News even has a "bill of the month" segment which highlights some of the more outrageous examples of routine procedures resulting in exorbitant bills, e.g., $28,000 for a throat swab.)

The bill associated with van Brakle's service was not necessarily stratospheric. It was around $800. The problem was that her partial payments — $10 here, $50 there, plus the initial $25 co-pay — were not coherently or timely applied to receipts. A statement van Brakle received in September claimed that her payments would not appear on her statements until insurance finished processing her claim, but that's in conflict with Ohio consumer law, attorney Daniel Myers says.

Van Brakle was also, crucially, never provided an oral or written estimate of what her services were likely to cost. She was hounded by debt collectors and was forced to "make the same payment again and again" to escape harassment.

Myers, the attorney for the plaintiff, told Scene that he's hopeful the suit would "not only compensate patients who have been wronged, but force all hospitals in Ohio to provide actual price transparency for medical services."

"If the Court rules in our favor," Myers wrote in an email, "the Cleveland Clinic may be forced to give estimates to all patients, or at least written notices to all patients that inform the patient of their right to get an estimate, and force the Clinic to provide the estimate in the manner initialed by the patient. This would allow patients to know up front what something is going to cost them. It would take the surprise out of the medical bills, and it would reduce billing errors."

The Cleveland Clinic, represented by Jones Day, filed a motion to dismiss the case late last month. They argued that the consumer protection law cited by the plaintiffs simply did not apply.

Unlike goods and services which have a known price, the Clinic's lawyers argued that medical services are both dependent on a specific patient's needs, whether or not that patient has insurance, and the specific terms of the insurance plan. That's why Ohio lawmakers created a statute in 2015 which required medical providers to furnish a "reasonable good-faith estimate" before services are rendered.

"The level of specificity required by the [Ohio Administrative Code] Regulation
conflicts with [Ohio Revised Code's] requirement that a 'good-faith estimate' is sufficient, rendering the Regulation invalid," the motion read. 

The Clinic also argued that because physicians are exempt from the Consumer Sales Practices Act, so too are the hospitals they work for. That's an argument with mixed legal precedent and Dan Myers told Scene that the Clinic was "completely wrong" in its application.

"There is literally a Cuyahoga County appellate court decision stating that hospitals are not physicians and therefore that exclusion from the law does not apply to hospitals," he wrote in an email. "There are multiple federal court and state court decisions that all say the same thing—hospitals are suppliers under the consumer law and the regulations apply to them." 

Myers said that his client will oppose the motion to dismiss and that he intends to file the opposition next Thursday. 

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