STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
CA 18-710
DENNIS GIBSON, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED
VERSUS
NATIONAL HEALTHCARE OF LEESVILLE, INC., D/B/A BYRD REGIONAL HOSPITAL
**********
APPEAL FROM THE THIRTIETH JUDICIAL DISTRICT COURT PARISH OF VERNON, NO. 93,228 HONORABLE VERNON BRUCE CLARK, DISTRICT JUDGE
BILLY HOWARD EZELL JUDGE
Court composed of Sylvia R. Cooks, Billy Howard Ezell, and Candyce G. Perret, Judges.
AFFIRMED. Scott R. Bickford Lawrence J. Centola, III Martzell, Bickford & Centola, PC 338 Lafayette St. New Orleans, LA 70130 (504) 581-9065 COUNSEL FOR PLAINTIFF/APPELLEE: Dennis Gibson
Edwin Dunahoe Jared Dunahoe The Dunahoe Law Firm P. O. Box 607 Natchitoches, LA 71458-0607 (318) 352-1999 COUNSEL FOR PLAINTIFF/APPELLEE: Dennis Gibson
Derrick G. Earles Laborde Earles Law Firm 203 Energy Parkway, Building B Lafayette, LA 71351 (337) 777-7777 COUNSEL FOR PLAINTIFF/APPELLEE: Dennis Gibson
J. Lee Hoffoss, Jr. Claude P. Devall Donald W. McKnight Hoffoss Devall, LLC 517 W. College Street Lake Charles, LA 70605 (337) 433-2053 COUNSEL FOR PLAINTIFF/APPELLEE: Dennis Gibson
David R. Kelly Thomas R. Temple, Jr. Chris D. Billings Breazeale, Sachse & Wilson, L.L.P. P. O. Box 3197 Baton Rouge, LA 70821-3197 (225) 387-4000 COUNSEL FOR DEFENDANT/APPELLANT: National Healthcare of Leesville, Inc. D/B/A Byrd Regional Hospital EZELL, Judge.
This case raises the issue of whether certification of a class action under
La.R.S. 22:1874, the Balance Billing Act, was proper. National Healthcare of
Leesville, Inc. D/B/A Byrd Regional Hospital (Byrd Regional) appeals the
decision of the trial court arguing that the trial court failed to conduct a rigorous
analysis of all the elements for class certification. For the following reasons, we
affirm the trial court’s decision.
FACTS
Dennis Gibson was injured in an accident on April 25, 2011, when a car ran
into the motorcycle he was driving. He was taken to Byrd Regional for treatment.
At the time of his admission, Mr. Gibson’s account was designated as Financial
Class “L” which stood for “liability” and meant he had been in a motor vehicle
accident. The intake sheet at Byrd Regional noted that Mr. Gibson worked for the
Louisiana Department of Agriculture and Forestry in DeRidder. Mr. Gibson was
covered by health insurance with the State of Louisiana, Office of Group Benefits.
That insurance was provided by Blue Cross and Blue Shield of Louisiana.
Linda Davis, director of patient financial services with Byrd Regional since
1996, testified at the hearing on class certification. She explained that prior to
2013, Byrd Regional was instructed to bill the motor vehicle insurance company as
primary. This policy was effective in 2005. After July 1, 2013, the health insurer
was billed as primary. Ms. Davis explained that Byrd Regional is a contracted
healthcare provider for various health insurance companies, including Blue Cross.
She stated that a Membership Provider Agreement spelled out the obligations
between Blue Cross and Byrd Regional, and Byrd Regional agreed to accept the
health insurance rate in accordance with the contract. This is known as the contracted reimbursement rate, which is less than the charge master rate, or total
charge.
Michael Lynch, the lien unit department manager for Professional Account
Services Incorporated, (PASI), also testified at the hearing. He explained that
PASI handles claims for hospitals involving automobile accidents. PASI will run a
query on the hospital system looking for accounts that indicate there was a motor
vehicle accident, or Class “L” accounts. PASI will then begin working the case by
filing a lien against the at-fault insurer. This occurs before any attempt to collect
from the health insurer. “This practice of rejecting insurance and collecting or
attempting to collect full charges is referred to as ‘balance billing’ and is prohibited
by law.” Emigh v. West Calcasieu Cameron Hosp., 13-2985, p. 2 (La. 7/1/14), 145
So.3d 369, 371; La.R.S. 22:1874.
In Mr. Gibson’s case, the total charges were $5,292.55. A notice of hospital
lien was filed against Farm Bureau Insurance Company, the liability insurer of the
at-fault driver, on May 6, 2011. On December 2, 2011, Farm Bureau paid the
entire bill, which is more than Blue Cross would have paid pursuant to the
contracted reimbursement rate. Byrd Regional released the lien on December 14,
2011.
On July 25, 2016, Mr. Gibson, individually and on behalf of others similarly
situated, filed a class action suit for damages against Byrd Regional. Mr. Gibson
asserted statutory violations and breach of contract claims. Specifically, Mr.
Gibson alleged that Byrd Regional improperly refused to submit medical bills to
patient’s health insurers and attempted to collect payment from patients in
violation of Louisiana’s Balance Billing Act, La.R.S. 22:1871 to 22:1881, and in
violation of the Member Provider Agreement.
2 After the hearing on September 28, 2017, the trial court certified this matter
as a class action. Reasons for ruling were issued on October 10, 2017, and
judgment was signed on October 27, 2017. The class was defined as (alterations in
original):
All persons currently and/or formerly residing in the State of Louisiana during the period from May 1, 2005 to July 1, 2013:
(1) Having “Health Insurance Coverage’ [as defined by La. R.S. 22:1872(18)] providing coverage for themselves or for others for whom they are legally responsible, with any “Health Insurance Issuer” [as defined by La. R.S. 22:11872(19)] at the time “covered health care services” [as defined by La. R.S. 22:1872(8)] were provided by any company owned and/or operated by BYRD; and,
(2) With which “Health Insurance Issuer” and company owned and/or operated by BYRD was a “contracted health care provider” at the time of service [as defined by La. R.S. 22:1872(6)]; and,
(3) From whom BYRD and/or any company owned and/or operated by BYRD collected, and/or attempted to collect, the “Health Insurance Issuer’s Liability” [as defined by La. R.S. 22:1872(20)], including, but not limited to, any collection or attempt to collect from any settlement, judgment or claim made against any third person or insurer who may have been liable for any injuries sustained by the patient which insurers include those providing liability coverage to third person, uninsured/underinsured coverage, and /or medical payments coverage); and/or,
(4) From whom BYRD and/or any company owned and/or operated by BYRD, collected, and/or attempted to collect, any amount in excess of the “Contracted Reimbursement Rate” [as defined by La. R.S. 22:1872(7)], including but not limited to, any collection or attempt to collect from any settlement, judgment, or claim made against any third person or any insurer which may have been liable for any injuries sustained by the patient (which insurers include those providing liability coverage to third person, uninsured/underinsured coverage, and/or medical payments coverage); and/or
(5) From whom BYRD and/or any company owned and/or operated by BYRD collected, and/or attempted to collect,
3 any amount without first receiving an explanation of benefits or other information from the Health Insurance Issuer setting forth the liability of the insured as required by La. R.S. 22:1874(A)(2) and (3).
Byrd Regional filed a motion for new trial on November 9, 2017. A hearing
on the motion for new trial was held on March 1, 2018. The motion was denied,
and judgment was signed on March 26, 2018. Byrd Regional then filed the present
appeal claiming that Mr. Gibson did not meet his burden of proof under La.Code
Civ.P. art. 591 to certify the class and the trial court abused its discretion when it
granted Mr. Gibson’s motion to certify the class.
CLASS CERTIFICATION
In Baker v. PHC-Minden, L.P., 14-2243, p. 23 (La. 5/5/15), 167 So.3d 528,
544, the supreme court specifically held that “the class action is the superior
method for adjudicating the common issue regarding the legality, under the
Balance Billing Act, of a health care provider’s collection policy of filing medical
liens to recover its full rate for services from an insured’s settlement or judgment
with a third-party [tort feasor].” Louisiana Code Civil Procedure Article 591 sets
forth the requirements for class certification. Specifically, La.Code Civ.P. art.
591(A) provides for five prerequisites that a representative party or parties must
meet for class certification “often referred to as numerosity, commonality,
typicality, adequacy of representation, and objective definability of class[.]” Baker,
167 So.3d at 538. Furthermore, in a Balance Billing Act class certification case, a
party must also “prove common questions of law or fact predominate over
individual issues[.]” Id. at 539. On appeal, Byrd Regional claims that Mr. Gibson
was unable to meet his burden of proof with respect to the numerosity, adequacy,
and predominance elements.
4 “The burden of establishing the statutory criteria have been satisfied falls on
the party seeking to maintain the class action.” Id. A trial court has wide
discretion in determining whether a class should be certified, and its factual
findings are subject to the manifest error standard of review. Id. “What is of
primary concern in the certification proceeding is simply whether the plaintiffs
have met the statutory requirements to become a class action, not the merits of the
underlying litigation.” Id. at 541(alteration in original). “[A] court’s focus on
review must be on the requirements and whether the evidence establishes the
procedural device is appropriate.” Id.
The supreme court in Baker has already determined that the class action is a
proper procedural device for a claim alleging violations of the Balance Billing Act
by healthcare providers. Therefore, we will review the trial court’s determinations
regarding the statutory requirements that Byrd Regional alleges Mr. Gibson failed
to establish under La.Code Civ.P. art 591 pursuant to the manifest error standard of
review.
Numerosity
Byrd Regional first claims that Mr. Gibson failed to submit any evidence as
to the likely number of potential claimants and improperly relied on an assumption
that the potential claimants are so numerous that joinder is impractical.
A court must look at the facts and circumstances of each individual case to
determine numerosity. Baker, 167 So.3d 528. “This requirement reflects the basic
function of the class action as a device for allowing a small number of persons to
protect or enforce rights or claims for the benefit of many where it would be
inequitable and impracticable to join every person sharing an interest in the rights
or claims at issue in the suit.” Id. at 542.
5 There is no set number above which a class is automatically considered so numerous as to make joinder impractical as a matter of law. Likewise, the numerosity element may not be met by simply alleging a large number of potential claimants exist. While the determination of numerosity is in part based upon the number of putative class members, it is also based upon considerations of judicial economy in avoiding a multiplicity of lawsuits, financial resources of class members, and the size of the individual claim. Ultimately, to meet this requirement, the plaintiff must show joinder is impractical, but, at the same time, there is a definable group of aggrieved persons.
Id. (citations omitted).
Mr. Gibson introduced Exhibit 9 at the hearing, which was provided by Byrd
Regional. Ms. Davis explained that Exhibit 9 is a list generated by Byrd Regional
that lists over 600 patients who were treated after motor vehicular accidents and
were both “L” and Occurrence Code 01, indicating that another vehicle was
involved and that there may be a liability claim. The trial court found that there
may be as many as 600 patients based on this list. As noted by Byrd Regional, this
exhibit does list a few claims that are outside the period of time when the
classification policy was in place.
Byrd Regional claims that the list is not limited to accounts on which liens
were issued to patients with health insurance. It claims that the list includes all
self-pay accounts, patients insured under a fully-funded ERISA policy, uninsured
patients, and all patients covered under Medicare, Medicaid, or some other
government sponsored program. Byrd Regional argues that the class definition
does not include these patients and, as such, the list is broad and over-inclusive.
As a result, it claims that Mr. Gibson failed to establish that the class is so large
that joinder would be impractical.
Clearly, of these 600 patients, there are numerous patients who were treated
at Byrd Regional for motor vehicular accidents and liens were issued on the
6 liability policy as primary when health insurance was involved. While Mr. Lynch
testified that there is nothing in PASI’s software that would allow it to identify
Class “L” accidents where only health insurance was involved, he agreed that it
would not necessarily be a problem for Byrd Regional. Even Byrd Regional’s own
Hospital Lien Policy regarding motor vehicle accidents with liability provided
what information should be noted at registration for a patient involved in a motor
vehicle accident. It required notation of whether a patient had Blue Cross
insurance, other auto/liability insurance, no insurance, did not know the specific
insurance, or no insurance.
Ms. Davis explained that Byrd Regional labeled all motor vehicle accidents
as Class “L” resulting in the liability insurance policy as primary over the health
insurance policy. She testified that from May 2005 to July 1, 2013, this policy had
been implemented at the hospital more than 100 times. So, we know more than
100 names on the list would qualify as members of this class.
Also, many of the amounts listed in Exhibit 9 are relatively small so
considerations of judicial economy come into play. As noted by the supreme court
in Baker, 167 So.3d at 542, “many claims may be small or nominal in nature,
rendering individual actions financially impractical, if not impossible.” We find no
manifest error in the trial court’s conclusion that the numerosity requirement was
met by Mr. Gibson.
Adequacy of Representation
Byrd Regional claims that Mr. Gibson is not capable of fairly and adequately
protecting the interests of the purported class. It claims that there are aspects of his
own claim that make his interests in direct conflict with those of the purported
class. Specifically, Byrd Regional argues Mr. Gibson has no general damages
7 claim even though he is trying to pursue a general damages claim on behalf of the
class. Byrd Regional also claims that Mr. Gibson’s claim is subject to the defense
of prescription.
There are factors that are relevant to the inquiry of whether Mr. Gibson will
fairly and adequately protect the interests of the class:
(1) The representative must be able to demonstrate that he or she suffered an actual-vis-à-vis hypothetical-injury;
(2) The representative should possess first hand knowledge or experience of the conduct at issue in the litigation;
(3) The representative’s stake in the litigation, that is, the substantiality of his or her interest in winning the lawsuit, should be significant enough, relative to that of other class members, to ensure that representative’s conscientious participation in the litigation; and
(4) The representative should not have interests seriously antagonistic to or in direct conflict with those of other class members, whether because the representative is subject to unique defenses or additional claims against him or her, or where the representative is seeking special or additional relief.
Baker, 167 So.3d at 543-44 (quoting Kent A. Lambert, Certification of Class
Actions in Louisiana, 58 La.L.Rev. 1085, 1117 (1998)).
The Balance Billing Act is a consumer protection law designed to prohibit
health providers from “attempting to collect . . . or collect . . . an amount in excess
of the contracted reimbursement rate for covered health care services. La.R.S.
22:1874(A). The supreme court in Anderson v. Ochsner Health System, 13-2970
(La. 7/1/14), 172 So.3d 579, held that La.R.S. 22:1874(B) grants a private cause of
action to an insured to sue under the Balance Billing Act. Specifically, La.R.S.
22:1874(B) grants a prevailing party the right to “recover all costs incurred,
including reasonable attorney fees and court costs” when a health care provider
8 maintains an action at law to collect an amount in excess of the contracted
reimbursement rate.
While Mr. Gibson did testify that he had no worry or concern related to Byrd
Regional’s handling of his medical claim, the Balance Billing Act allows recovery
of all costs incurred. There is no doubt that a medical lien was filed in Mr.
Gibson’s case and Farm Bureau, the liability insurer, paid the full amount sought.
Mr. Gibson received notice of the medical lien from Byrd Regional and
acknowledged that he never got the benefit of the discounted rate. He, like many
others, will have a claim aside from mental health damages. Mr. Gibson agreed
that at the time of his deposition, he was not very familiar with the Balance Billing
Act or a class action. However, he testified that he now has a better understanding
of the issues and process and is willing to serve as the class representative.
Byrd Regional also claims that Mr. Gibson is subject to the unique defense
of prescription citing Stewart v. Ruston Louisiana Hospital Co., L.L.C., 3:14-0083,
p. 5 (W.D. La. 2016)(unpublished opinion), in which the federal court held “that
the appropriate prescriptive period for a cause of action based on a violation of the
Balanced [sic] Billing Act is one year.” However, this court in Vallare v. Ville
Platte Medical Center, 16-863, 16-953 (La.App. 3 Cir. 2/22/17), 214 So.3d 45,
writs denied, 17-498, 17-513 (La. 5/12/17), 221 So.3d 73, specifically disagreed
with Stewart and found that the cause of action involved a contract or quasi-
contractual obligation and is not based on tort so that the proper prescriptive period
is ten years.
Byrd Regional also takes issue with Mr. Gibson’s failure to file suit against
Blue Cross. Citing Emigh, 145 So.3d 369, Byrd Regional argues that Mr. Gibson
has failed to pursue a claim against the health insurers for breach of contract. It
9 claims that should any claim against it be dismissed, then the class could pursue
claims against the health insurers for breach of contract because Blue Cross’s
contract promises that a health care provider will provide care at discounted health
care costs.
We first observe that the supreme court in Emigh simply held that the
petition against the health insurers stated a cause of action under La.Civ.Code art.
1977 for breach of contract due to the failure of a third party to perform an
obligation. The supreme court further stated that it was offering no opinion as to
the success on the merits of the claim.
The fact that Mr. Gibson did not seek to sue his own health insurer does not
render him an inadequate class representative for the claims against Byrd Regional.
See Gunderson v. F.A. Richard and Assocs., Inc., 07-264, 07-331, 07-400 (La.App.
3 Cir. 2/27/08), 977 So.2d 1128, writs denied, 0-1063, 08-1069, 08-1072 (La.
9/19/08), 992 So.2d 953.
We find no manifest error in the trial court’s determination that Mr. Gibson
is an adequate representative of the proposed class.
Predominance
Byrd Regional also claims the trial court failed to complete an analysis of
the requirements of La.Code Civ.P. art. 591(B)(3), which requires Mr. Gibson to
show that any common questions of law or fact predominate over the individual
issues involved. It argues that there are numerous individual issues that will make
it impossible for the court to ultimately determine liability and assess damages
feasibly and efficiently across the class without conducting mini-trials. Mr. Gibson
argues that class certification has been approved by this court and the supreme
court even though there may be possible individual issues. He argues that there is
10 a common issue that predominates: Whether the Defendant’s collection policy,
which was applied to all plaintiffs, violates the prohibitions under the Balance
Billing Act and the provider’s contractual obligations under Louisiana law.
“An inquiry into predominance tests ‘whether the proposed classes are
sufficiently cohesive to warrant adjudication by representation.’” Brooks v. Union
Pacific R.R. Co., 08-2035, p. 19 (La. 5/22/09), 13 So.3d 546, 560 (quoting
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623, 117 S.Ct. 2231, 2249 (1997);
Vallare, 151 So.3d 984. “The predominance requirement ‘entails identifying the
substantive issues that will control the outcome, assessing which issues will
predominate, and then determining whether the issues are common to the class,’ a
process that ultimately ‘prevents the class from degenerating into a series of
individual trials.’” Brooks, 13 So.3d at 560 (quoting O’Sullivan v. Countrywide
Home Loans, Inc., 319 F.3d 732, 738 (5th Cir. 2003)).
We agree with the trial court that the issue of whether Byrd Regional’s
actions violated the prohibition found in the Balance Billing Act predominates over
any individual claims. As we previously stated, many of the claims will be so
small so as make individual actions impractical.
For the reasons set forth in this opinion, we affirm the trial court’s judgment
certifying this matter as a class action. All costs of this appeal are assessed to
National Healthcare of Leesville, Inc. D/B/A Byrd Regional Hospital.
AFFIRMED.