This week the Supreme Court of Georgia handed down a very favorable opinion for health care providers across the state. Bowden v. The Medical Center, Inc. has winded its way through the Georgia court system since 2011. This case began when Bowden sought care after an automobile accident in 2011. The Medical Center perfected a hospital lien pursuant to O.C.G.A. 44-14-470 et. seq, using its standard chargemaster rates. O.C.G.A. 44-14-470 et. seq creates a statutory lien whereby a hospital can assert a lien for its reasonable charges against causes of action accruing to patients for injuries caused by a third party.
In her initial Complaint, Bowden argued the charges used to support the lien were unreasonable because the amounts actually reimbursed to providers are often less than the amount of the chargemaster rate. To support her argument, Bowden sought discovery of the hospital’s managed care contracts (among other things). The hospital refused to provide the contracts, and this discovery dispute eventually made its way to the Supreme Court of Georgia. The Court held that the amounts paid by other payors are discoverable and could be relevant to the issue of reasonableness.
Bowden subsequently amended her Complaint, adding claims of fraud and negligent misrepresentation and a petition seeking class certification on behalf of any patient who had a lien filed against causes of actions accruing to them since 2007. In her amended Complaint, Bowden alleged that the hospital engaged in fraud and racketeering when it filed the hospital lien in the amount of its standard, “chargemaster” rate. According to Bowden, these rates are “grossly excessive and did not reflect the reasonable value of her medical treatment.” The trial court certified the class and allowed the fraud and negligent misrepresentation claims to continue. The Court of Appeals upheld the trial court’s decision. On Tuesday, the Supreme Court of Georgia reversed the lower courts, finding the class was improperly certified, and the hospital was justified in using its chargemaster rates as the basis for filing the hospital lien.
The Court refused to certify the class because the group lacked commonality, finding that an individual analysis of each service provided to the patients would be required to determine whether the charges are reasonable under O.C.G.A. 44-14.470. More importantly, the Court stated that “just because an uninsured patient is billed at the chargemaster rate does not necessarily mean the charge itself is unreasonable for that specific patient.” Therefore, the Court concluded that filing a lien based on chargemaster rates is sufficient and authorized explicitly under O.C.G.A. 44-14-471, even if the amount ultimately collected is less than the amount of the lien.
This opinion signals the end of this case and all companion cases pending in this state wherein a class of patients have alleged hospitals are engaging in fraudulent conduct when exercising its statutory lien rights under O.C.G.A. 44-14-470 et. seq.