Hefczyc v. Rady Children's Hospital-San Diego

225 Cal. Rptr. 3d 641, 17 Cal. App. 5th 518
CourtCalifornia Court of Appeal, 5th District
DecidedNovember 17, 2017
DocketD071264
StatusPublished
Cited by6 cases

This text of 225 Cal. Rptr. 3d 641 (Hefczyc v. Rady Children's Hospital-San Diego) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hefczyc v. Rady Children's Hospital-San Diego, 225 Cal. Rptr. 3d 641, 17 Cal. App. 5th 518 (Cal. Ct. App. 2017).

Opinion

IRION, J.

*522Artur Hefczyc appeals from an order denying his motion for class certification in his lawsuit against Rady Children's Hospital-San Diego (Rady). On behalf of a proposed class, Hefczyc seeks declaratory relief *647to establish that Rady's form contract, signed by patients or guarantors of patients who receive emergency room care, authorizes Rady to charge only for the reasonable value of its services, and that Rady therefore is not authorized to bill self-pay patients based on its master list of itemized charge rates, commonly referred to as the "Chargemaster" schedule of rates, which Hefczyc alleges is "artificial" and "grossly inflated." The trial court denied Hefczyc's motion for class certification, concluding that the class was not ascertainable, that common issues did not predominate, and that class action litigation was not a superior means of proceeding.

Hefczyc contends that the trial court erred in denying class certification because, as the complaint seeks only declaratory relief, the motion for class certification was brought under the equivalent of Federal Rules of Civil Procedure, rule 23(b)(1)(A) or (b)(2) (28 U.S.C.), for which he was not required to establish the ascertainability of the class, that common issues predominate and that class action litigation is a superior means of proceeding. Hefczyc also contends that even if the trial court properly imposed those three requirements in this action, the trial court abused its discretion in concluding that those requirements were not met. We conclude that Hefczyc's arguments lack merit, and accordingly we affirm the order denying class certification.

I

FACTUAL AND PROCEDURAL BACKGROUND

A. Hefczyc's Complaint

On November 10, 2015, Hefczyc filed a complaint against Rady, in which he alleged that his minor child was treated on October 8, 2015, at Rady's emergency room. Hefczyc alleged that he had no outside source of payment for the emergency room visit, such as insurance, and thus was a "self-pay" guarantor of his child's financial obligation to Rady. The total amount that Rady billed to Hefczyc for the emergency room visit was $9,831.34.

According to Hefczyc, the amount of the bill he received was based on "Chargemaster" rates developed by Rady. As alleged in the complaint, a "Chargemaster," as maintained by Rady and by other hospitals, is a spreadsheet "which include code numbers, descriptions, and gross charges for each of the thousands of items that are provided to patients." Rady explains that its *523Chargemaster contains thousands of different line items, relating to procedures, services and goods that are either bundled or specific. The Chargemaster and the number of line items on it changes each year.1 *648According to Hefczyc, the Chargemaster "provide[s] a convenient reference point for negotiating contracts and pricing schedules with commercial insurance carriers and with non-emergency care patients seeking elective treatment and service" but it "is not a pricing schedule which patients are expected to pay." The complaint alleges that Rady's actual reimbursement rates "are set forth in separate governmental regulations, contracts with commercial insurers, agreements with HMOs, etc."

As alleged by Hefczyc, when a patient seeks care in Rady's emergency room, all guarantors of emergency care patients are required by Rady to sign an agreement titled "Conditions of Treatment/Admission" (the COTA). The COTA contains a section relating to financial obligations, which states, among other things, that "Hospital charges will be in accordance with the Hospital's regular rates and terms." According to the complaint, "each patient is requested to sign" the COTA, "regardless of whether a patient is a Medicaid, privately insured, HMO, or self-pay patient."2 Hefczyc alleges that *524"the actual pricing terms that determine the reimbursement rates of the Hospital vary by category of patient" and depend on "governmental regulations and privately negotiated contracts." Hefczyc alleges that unlike other categories of patients, self-pay patients are billed at Chargemaster rates. Further, Hefczyc alleges that Chargemaster rates are "artificially inflated" and "unconscionable," are "at least three times what other patients pay for the same treatment and services," and "bear no relation to the Hospital's actual costs for providing treatment or services."

In interpreting the COTA's financial obligation provision, Hefczyc alleges that "the fact that all patients, regardless of category, are subject to the exact same pricing guarantee to pay 'in accordance with the Hospital's regular rates and terms,' despite the fact that each category of patients is charged differently, shows that the term 'the Hospital's regular rates and terms,' as a pricing term for the Hospital's services and treatment, is inherently vague, ambiguous and meaningless." According to the complaint, "[s]ince [the COTA] itself contains no pricing terms for the self-pay patients which are certain or *649readily identifiable, and fails to identify any means by which such pricing terms for self-pay patients can be made certain (i.e., it contains an 'open' pricing term), applicable law implies a contractual obligation to pay the reasonable value of the services and treatment rendered, and for [Rady] to charge guarantors of self-pay patients no more than such reasonable value."3

Hefczyc alleges that the billed amount of $9,831.34 for his child's emergency care treatment was based on Chargemaster rates that were "grossly excessive, unfair, and unreasonable." Further, he alleges that because the COTA purportedly contains an " 'open' pricing term," under the law governing contracts with open pricing terms, Rady is authorized to charge only "the reasonable value of such services."

*525Hefczyc brought this action on behalf of himself and a class of persons defined as follows:

"The guarantors of all persons who within the last four years, had one or more 'eligible patient hospital visits' to [Rady's] emergency department.
"For purposes of this class definition, an 'eligible patient hospital visit' is defined as one for which (1) the patient was billed at the hospital's full Chargemaster rates; (2) there have been no full writeoffs, discounts or adjustments to the full Chargemaster billing under [Rady's] charity care policies; (3) the bill has not otherwise been waived or written off in full by [Rady]; and (4) no payments for the hospital visit have been made by other than the guarantor, the patient or the patient's representatives."4

The single cause of action alleged in the complaint is for declaratory judgment. Specifically, the complaint seeks the following declarations on behalf of the alleged class: (1) "a declaration ...

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Cite This Page — Counsel Stack

Bluebook (online)
225 Cal. Rptr. 3d 641, 17 Cal. App. 5th 518, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hefczyc-v-rady-childrens-hospital-san-diego-calctapp5d-2017.