University of South Alabama Hospitals v. Blackmon

42 So. 3d 1258, 2009 Ala. Civ. App. LEXIS 514, 2009 WL 3245810
CourtCourt of Civil Appeals of Alabama
DecidedOctober 9, 2009
Docket2080322
StatusPublished
Cited by1 cases

This text of 42 So. 3d 1258 (University of South Alabama Hospitals v. Blackmon) is published on Counsel Stack Legal Research, covering Court of Civil Appeals of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
University of South Alabama Hospitals v. Blackmon, 42 So. 3d 1258, 2009 Ala. Civ. App. LEXIS 514, 2009 WL 3245810 (Ala. Ct. App. 2009).

Opinions

THOMPSON, Presiding Judge.

University of South Alabama Hospitals (“USAH”) appeals from the trial court’s judgment holding that $32,274 was a reasonable charge for certain medical services USAH rendered to Angela Blackmon. In the judgment, the trial court ordered Blackmon to pay the $32,274 to USAH in satisfaction of a hospital lien USAH had against her.

In July 2004, Blackmon was injured when the van she was driving rolled over after one of the tires on the van exploded. Blackmon was transported from the accident scene on Interstate 65 near Atmore [1259]*1259to USAH, where she had surgery and was hospitalized for more than two weeks. Blackmon was uninsured at the time, and she did not have sufficient financial resources to pay for USAH’s services. Pursuant to § 35-11-370, Ala.Code 1975, USAH filed a hospital lien against Black-mon for $53,449.20 to recover payment for those services. At trial, USAH presented evidence indicating that an audit of Black-mon’s account had revealed that Blackmon was due certain credits and that the balance she owed on the lien was $52,052.95.

In February 2005, Blackmon was again hospitalized at USAH, and she underwent a second surgery.1 The charges for the services rendered during that hospitalization totaled $23,843.63. USAH filed a second lien against Blackmon. By that time, however, Blackmon was eligible to receive benefits from Medicaid. Medicaid satisfied the second lien with a payment of $10,981.58.

Blackmon sued the manufacturer of the tire that had exploded, and the parties in that case reached a confidential settlement agreement. Pursuant to the agreement, $48,000 was deposited with the clerk of the trial court pending a determination of the “reasonable” amount of charges made the basis for USAH’s first lien against Black-mon. The trial court held a hearing on the issue of the reasonableness of USAH’s charges as part of Blackmon’s action against the tire manufacturer. The trial court determined that $24,586 was a reasonable amount for Blackmon to pay for USAH’s treatment and set USAH’s lien at that amount. USAH appealed from that judgment. This court dismissed the appeal, holding that the trial court had lacked subject-matter jurisdiction to determine the amount of the lien because the settlement of Blackmon’s claims against the tire manufacturer, to which USAH’s lien related, had not been reduced to a judgment, as required by § 35-11-373, Ala.Code 1975. University of South Alabama Hosps. v. Blackmon, 987 So.2d 1138, 1142 (Ala.Civ.App.2007). USAH then filed the instant action seeking a declaration of the reasonable value of the services rendered to Blackmon during her first hospitalization.

At trial, USAH’s credit and collections manager, Teresa Englestead, testified that, like all hospitals, USAH uses a table known as the “Charge Master,” which is a confidential list of the charges for each item and service the hospital provides. USAH’s Charge Master itemizes approximately 12,000 separate charges. Engle-stead testified that, based upon her training and experience, she believed that the charges listed on the Charge Master were reasonable. On cross-examination, Engle-stead said that if a charge appears on the Charge Master, then it is reasonable.

Englestead said that in October 2004, three months after Blackmon’s first surgery and hospitalization, an outside audit was conducted on all USAH’s charges listed on the Charge Master. None of the charges billed to Blackmon were reduced as a result of that audit. In fact, four charges were increased. Englestead testified that Joan Platt, a nurse auditor who works for USAH, reviewed Blackmon’s account and determined that every charge was confirmed by a treating physician’s order.2 As a result of Platt’s audit, however, USAH reduced Blackmon’s charges by more than $1,000.

[1260]*1260Englestead verified that the cost to the hospital for a rod that was implanted in Blackmon’s arm was $2,085 and that USAH charged Blackmon $5,200 for the rod. She also acknowledged that USAH, a not-for-profit hospital, has a charge markup of 221%, meaning that it charges patients more than double the cost it pays for items. Englestead said that she gives uninsured patients a discount as a matter of course because, she said, to do so is reasonable, fair, and customary. She also testified that she had offered Blackmon a 30% discount on the charges, “because that’s the same discount the State of Alabama gets for worker’s comp.” Engle-stead said that Blackmon’s attorney had turned down that offer.

Donald Ching, the director of USAH’s financial systems, testified that, based upon his experience, the charges listed on the Charge Master were reasonable. He could not identify the charge amount for individual items, but, he said, he thought “the system” that developed the charges by applying “a factor to the cost of the hospital’s operations” was reasonable. He said that the system “produces reasonable charges every time.” Given the examples of a $1 band-aid that had been marked up 1,000% and a 10-cent Ambien sleeping pill for which USAH charged $9, Ching said he believed that those charges were reasonable.

All patients are charged the same amount for the same services. However, Ching said, approximately 90% of USAH’s “large payors” — Medicare and Medicaid, private insurance companies such as Blue Cross/Blue Shield and Aetna, and managed-care plans such as United Health Care — are not required to pay the full amount of the charges. Ching also testified that if an uninsured patient was willing to pay his or her bill, that patient was generally given a discount.

As to how USAH’s charges compared to those of other hospitals, Ching said that USAH’s “cost-to-charge” ratio was 227%; he stated that the average ratio for Alabama hospitals is more than 300% and that the national average is 245%. Ching said that USAH’s charges are less than those of other hospitals in Mobile County.

After the hearing, the trial court determined that $32,274 was a reasonable fee for the medical services USAH had provided to Blackmon, and it ordered that amount to be paid to USAH out of the funds being held by the circuit clerk. USAH appealed, contending that there was no factual or legal basis to support the trial court’s determination that $32,274 constituted reasonable charges in this case.

The hospital-lien statute reads as follows:

“Any person, firm, hospital authority or corporation operating a hospital in this state shall have a lien for all reasonable charges for hospital care, treatment and maintenance of an injured person who entered such hospital within one week after receiving such injuries, upon any and all actions, claims, counterclaims and demands accruing to the person to whom such care, treatment or maintenance was furnished, or accruing to the legal representatives of such person, and upon all judgments, settlements and settlement agreements entered into by virtue thereof on account of injuries giving rise to such actions, claims, counterclaims, demands, judgments, settlements or settlement agreements and which necessitated such hospital care, subject, however, to any attorney’s lien.”

§ 35-11-370 (emphasis added). At the hearing, Blackmon conceded that the lien had been properly filed; she challenges only the reasonableness of USAH’s charges.

[1261]

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Related

University of South Alabama Hospitals v. Blackmon
42 So. 3d 1258 (Court of Civil Appeals of Alabama, 2009)

Cite This Page — Counsel Stack

Bluebook (online)
42 So. 3d 1258, 2009 Ala. Civ. App. LEXIS 514, 2009 WL 3245810, Counsel Stack Legal Research, https://law.counselstack.com/opinion/university-of-south-alabama-hospitals-v-blackmon-alacivapp-2009.