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Ohio Hospitals and Healthcare Clinics: It’s Time to Revisit Your Billing and Collection Practices

According to a recent Cuyahoga County case, certain healthcare entities may not be protected from liability when engaging in unfair or deceptive billing acts. This decision is consistent with the growing trend across the country to encourage price transparency and eliminate unfair surprise billing practices by health care organizations.[1] Now is the time for hospitals and other health care organizations to revisit their billing and collection policies and procedures to confirm that they are legally defensible and consistent with best practices.

New Developments

On January 14, 2021, the trial court in Cuyahoga County ruled in Brakle v. Cleveland Clinic Foundation that Ohio’s Consumer Sales Practices Act (“CSPA”) does not exclude transactions between patients and hospitals or healthcare clinics. These healthcare entities are not “physicians” as such term is defined in the CSPA and are therefore not shielded from liability stemming from consumer transactions.

Ohio’s Consumer Sales Practices Act

The CSPA prohibits unfair or deceptive acts or practices in connection with a consumer transaction.[2] Examples of unfair or deceptive acts/practices under Ohio law include but are not limited to: (1) failing to notify a customer that the customer has a right to an estimate for any service that will cost over $25; (2) failing to provide an estimate upon request; and (3) failing to give the customer a receipt after accepting a deposit.[3] As defined, a consumer transaction means, in part, a service to an individual for purposes that are primarily personal, family, or household.[4] The law expressly carves out transactions between physicians and their patients.[5] Therefore, transactions between physicians and their patients are not subject to the rules and regulations surrounding unfair or deceptive acts or practices.

Brakle v. Cleveland Clinic Foundation

Pursuant to an order from her physician, Amanda van Brakle (“Plaintiff”) visited a Cleveland Clinic (“Defendant”) facility in 2018 for radiology services. No physician participated in administering the services. At no time prior to the services did Defendant inform Plaintiff that she was entitled to an estimate of the cost of the services nor was she given any estimate of the cost. At the appointment, Plaintiff made a small payment toward the total cost of the service and was not given a receipt for such payment. Over time, Plaintiff made additional payments toward the bill and Defendant failed to render receipts. Defendant also credited these payments to a balance owed for different services and not the radiology services. Defendant eventually sent Plaintiff’s debt to collection. Plaintiff brought suit against Defendant for violations of the CSPA for failing to notify her of her rights to a pre-service estimate, failing to provide such an estimate, and failing to provide receipts.

Defendant filed motion for summary judgment (i.e., asking the court to dismiss the case) on several grounds, but the overarching justification being the service provided to Plaintiff is not a “consumer transaction” covered by the CSPA since the law excludes transactions between physicians and their patients. The Court ultimately disagreed with Defendant and denied the motion for summary judgment. The Court found that “physician” means a person skilled in the art of healing or a practitioner of medicine; a person duly authorized or licensed to treat diseases; and one lawfully engaged in the practice of medicine.[6] Simply put, Defendant is not a human being. The Court stated it is a corporate entity clearly outside of the definition of “physician” as commonly understood.[7] As such, the transaction at issue is not protected by the CSPA, the motion for summary judgment was dismissed, and the case will proceed.

Please contact attorneys Kate Hickner at kehickner@bmdllc.com or Kevin Cripe at kmcripe@bmdllc.com should you have any additional questions about Brakle v. Cleveland Clinic Foundation, surprise billing, or other general healthcare issues.

[1] See American Medical Association High-Level Summary of the No Surprises Act (2020) https://osma.org/aws/OSMA/asset_manager/get_file/527681?ver=0

[2] Ohio Rev. Code § 1345.02(A).

[3] Ohio Admin. Code § 109:4-3-05, 07.

[4] Ohio Rev. Code § 1345.01(A).

[5] Id.

[6] Citing Chiropractic Clinic of Solon v. Kutsko, 92 Ohio App.3d 608, 611 (8th Dist. 1994).

[7] Brakle v. Cleveland Clinic Foundation, Journal Entry (Jan. 14, 2021), pg. 5., https://www.accountsrecovery.net/wp-content/uploads/2021/01/van-Brakle-v-Cleveland-Clinic.pdf.

COVID, Privacy and More! New Challenges for Physicians in 2021

While hopefully we are coming out of the pandemic, the legal repercussions related to legislative initiatives and other actions during that time continue to apply to businesses in general and healthcare practices. It is a helpful reminder that practices make certain that they maintain accurate records in order to satisfy the reporting requirements under the various COVID-related bills and protect yourself from future employment claims.

Banking and Cannabis: Bank Lending, The Next Frontier

A fortuitous combination of developments and circumstances present the banking and cannabis industries a large opportunity to enhance each of their respective bottom lines: conventional bank lending, payment processing, treasury management and other services, and bank administered SBA and revenue bond financing to cannabis businesses.

EKRA Updates: COVID-19 Testing, Employment Agreements, and More

Ever since the Eliminating Kickbacks in Recovery Act (“EKRA”) was passed by Congress in 2018, we have been waiting to see how the law is interpreted and ultimately enforced. As a reminder, EKRA seeks to eliminate kickbacks in return for patient referrals to facilities that treat those overcoming addiction, such as recovery homes, clinical treatment centers, and laboratories. (NOTE: EKRA applies to all laboratories, not just those related to addiction treatment.) It is essentially an expansion of the Anti-Kickback Statute, which only applies to those services that are reimbursable through federal healthcare programs such as Medicare and Medicaid, to now also cover services reimbursable through private insurers.

New Interpretation of the Fair Debt Collection Practices Act Rocks the Industry

It’s not lost on us that our interpretation of § 1692c(b) runs the risk of upsetting the status quo in the debt-collection industry. This quote from the Eleventh Circuit Court of Appeal in its April 21, 2021 opinion from the case of Hunstein v. Preferred Collection and Management Services, Inc. is possibly the biggest understatement in the history of the Fair Debt Collection Practices Act. At a minimum, the Eleventh Circuit’s opinion has sent shockwaves and fear throughout multiple sectors of the financial services industry.

Construction Industry Trends and Predictions Through 2021 and Beyond: Insurance and Emerging Threats

A 2021 survey identified three key issues impacting the construction industry in 2021: (1) the financial health of contractors; (2) the continuing risk of the pandemic; and (3) technology driving productivity, but also increasing the risk of cybersecurity threats. With this backdrop, insurance premiums in the construction industry are generally on the rise in 2021.