Stewart v. Ruston La. Hosp. Co.

BRUCE STEWART, ET AL v. RUSTON LOUISIANA HOSPITAL COMPANY,LLC D/B/A NORTHERN LOUISIANA MEDICAL CENTER A/K/A LINCOLN GENERAL HOSPITAL, ET AL

CIVIL ACTION NO. 3:14-0083

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF LOUISIANA MONROE DIVISION

April 27, 2016

JUDGE ROBERT G. JAMES

MAG. JUDGE KAREN L. HAYES

RULING

Plaintiffs Bruce and Sarah Stewart, individually and on behalf of their minor child, Destanee Stewart, (collectively "Plaintiffs")¹ brought this suit against Defendants Ruston Louisiana Hospital Company, d/b/a Northern Louisiana Medical Center ("NLMC"); Women & Children's Hospital of Delaware, LLC d/b/a Women & Children's Hospital of Lake Charles ("Women & Children's Hospital"); National Healthcare of Leesville, Inc., d/b/a Byrd Regional Hospital ("Byrd Hospital"); Community Health Systems Professional Services Corp. ("Community Health Systems"); and Professional Account Services, Inc. ("PASI") (collectively "NLMC") for purported violations of the Health Care and Consumer Billing and Disclosure Protection Act, LA. REV.STAT. § 22:1871, et seq. ("Balanced Billing Act") and state contract law.

Pending before the Court is NLMC's Motion for Summary Judgment. [Doc. No. 98]. For the following reasons, the motion is GRANTED.

I. FACTS AND PROCEDURAL HISTORY

This case concerns alleged violations of the Balanced Billing Act, a Louisiana statute which regulates a series of relationships between healthcare providers, insurers, and patients. Generally, the Act prevents contracted health care providers from collecting or attempting to collect amounts from the insured or enrollee that are the responsibility of the insurer. See LA. REV.STAT. § 22:1874, et seq.

On or about February 20, 2010, Destanee Stewart, a minor, was involved in a motor vehicle accident resulting in serious injuries. She was treated at NLMC in Ruston, Louisiana. At the time of treatment, her father, Bruce Stewart, was not physically able to notify NLMC that his daughter was insured. Bruce Stewart was insured under a Blue Cross Blue Shield of Texas health benefit plan offered through his employer, Trinidad Drilling, LP.² Destanee Stewart was a dependent under that plan.

According to NLMC, because it was unaware that Destanee Stewart was insured, and because she had been involved in an automobile accident, it filed a medical provider's lien pursuant to LA. REV. STAT. § 9:4752 in an effort to recoup the full amount ($3,939.33) of the services provided to her from any responsible third party. Plaintiffs claim, however, that NLMC's practice was to file medical provider liens in such situations regardless of whether the hospital knew the patient was insured. See [Doc. No. 136, Michael Ruff Depo, p. 42]. Plaintiffs also assert that NLMC could have discovered Destanee Stewart's insured status with minimal effort.

Although NLMC sent a copy of the lien to Plaintiffs' attorney on or around March 16, 2010, and a Letter of Protection was requested from PASI on or around June 16, 2010, NLMC never billed Plaintiffs, nor did it pursue collection of the owed amounts. To this day, NLMC has not received compensation for Destanee Stewart's treatment. [Doc. No. 98-5, Lynch Affidavit].

On March 19, 2012, Plaintiffs filed this suit as a class action in Louisiana state court. [Doc. No. 1, Exh. A]. According to Plaintiffs, NLMC violated the Balanced Billing Act and the Member Provider Agreement by refusing to accept Bruce Stewart's health insurance as payment in full for the services provided to Destanee Stewart and by filing a lien against a potential third-party tort recovery. Plaintiffs also brought a breach of contract claim based on NLMC's alleged deviation from the Balanced Billing Act. Plaintiffs claimed that they and other members of the class were entitled to recover payments wrongfully made to NLMC, loss of profit damages, damages for emotional distress, damages for mental anguish, and injunctive relief.

On April 27, 2012, NLMC removed the case to this Court. However, on November 20, 2012, the Court remanded the case back to state court.

On December 18, 2013, while in state court, Plaintiffs filed a motion to amend and supplement the petition in order to name additional defendants. [Doc. No. 1-3]. According to Plaintiffs, Community Health, the parent company of NLMC, "created and maintained" the violations of the Balanced Billing Act. The violations were then implemented by PASI, a collection agency. Plaintiffs alleged that other subsidiaries of Community Health, including Women & Children's Hospital, Community Health Systems, and Byrd Regional "authored, implemented, and enforced" violations of the Balanced Billing Act. The motion to amend was granted concurrentlywith NLMC's removal of the case to this Court on January 16, 2014.³ [Doc. No. 1].

On March 17, 2014, Plaintiffs filed a motion to certify a proposed class of individuals similarly situated to themselves that had allegedly experienced violations of the Balanced Billing Act. [Doc. No. 36]. The Court referred the motion to Magistrate Judge Karen L. Hayes.

On July 22, 2015, NLMC filed the instant Motion for Summary Judgment. [Doc. No. 98]. On July 28, 2015, the Court granted Plaintiffs' motion to stay response deadlines to the Motion for Summary Judgment. [Doc. No. 104].

On January 27, 2016, Magistrate Judge Hayes held a hearing on Stewart's motion to certify class. The parties have filed supplemental briefing and the motion is pending.

On January 24, 2016, Plaintiffs filed a motion to lift the stay and reset briefing deadlines for the Motion for Summary Judgment. [Doc. No. 129]. On February 17, 2016, Plaintiffs filed their memorandum in opposition to NLMC's Motion for Summary Judgment. [Doc. No. 136]. NLMC filed a response on February 24, 2016. [Doc. No. 138]. The matter is ripe.

II. LAW AND ANALYSIS

A. Summary Judgment Standard

Under Federal Rule of Civil Procedure 56(a), "[a] party may move for summary judgment, identifying each claim or defense--or the part of each claim or defense--on which summary judgment is sought. The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." The moving party bears the initial burden of informing the court of the basis for its motion by identifyingportions of the record which highlight the absence of genuine issues of material fact. Topalian v. Ehrmann, 954 F.2d 1125, 1132 (5th Cir. 1992); see also FED. R. CIV. P. 56(c)(1) ("A party asserting that a fact cannot be . . . disputed must support the assertion by . . . citing to particular parts of materials in the record . . . ). A fact is "material" if proof of its existence or nonexistence would affect the outcome of the lawsuit under applicable law in the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is "genuine" if the evidence is such that a reasonable fact finder could render a verdict for the nonmoving party. Id.

If the moving party can meet the initial burden, the burden then shifts to the nonmoving party to establish the existence of a genuine issue of material fact for trial. Norman v. Apache Corp., 19 F.3d 1017, 1023 (5th Cir. 1994). In evaluating the evidence tendered by the parties, the Court must accept the evidence of the nonmovant as credible and draw all justifiable inferences in its favor. Anderson, 477 U.S. at 255. However, "a party cannot defeat summary judgment with conclusory allegations, unsubstantiated assertions, or only a scintilla of evidence." Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).

"Only disputes over facts that might affect the outcome of the suit under governing laws will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248. Disputed fact issues that are "irrelevant and unnecessary" will not be considered by a court in ruling on a summary judgment motion. Id.

B. Choice of Law

This Court sits in diversity by virtue of the Class Action Fairness Act. "In diversity cases such as these, federal courts must apply state substantive law." In Re Katrina Canal BreachesLitigation, 495 F.3d 191, 206 (5th Cir. 2007) (citing Erie R.R. Co. v. Tomkins, 304 U.S. 64, 78 (1938); Ashland Chem. Inc. v. Barco Inc., 123 F.3d 261, 265 (5th Cir. 1997)). The Fifth Circuit looks to the decisions of the Louisiana Supreme Court in order to determine state law. "In the absence of a final decision by the Louisiana Supreme Court, we must make an Erie guess and determine, in our best judgment, how that court would resolve the issue if presented with the same case." In Re Katrina Canal Breaches Litigation, 495 F.3d at 206) (citing Am. Int'l Specialty Lines Ins. Co. v. Canal Indem. Co., 352 F.3d 254, 260 (5th Cir. 2003)). Courts in this circuit attempting to guess how the Louisiana Supreme Court would rule on an issue are instructed to employ Louisiana's civilian methodology which entails consulting primary sources of law such as the constitution, codes, and statutes, before examining jurisprudence. See Lake Charles Diesel, Inc. v. Gen. Motors Corp., 328 F.3d 192, 197 (5th Cir. 2003); Prytania Park Hotel, Ltd. v. Gen. Star Indem. Co., 179 F.3d 169 (5th Cir. 1999).

C. Balanced Billing Act Generally

The Balanced Billing Act, "in pertinent part, prohibits a [contracted] health care provider from collecting or attempting to collect amounts from an insured patient in excess of the contracted reimbursement rate:

A. (1) A contracted healthcare provider shall be prohibited from discount billing, dual billing, attempting to collect from, or collecting from an enrollee or insured a health insurance issuer liability or any amount in excess of the contracted reimbursement rate for covered health care services.

(2) No contracted health care provider shall bill, attempt to collect from, or collect from an enrollee or insured any amounts other than those

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