The opinion
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF ARKANSAS
WESTERN DIVISION
BRIAN WHITLEY, Individually and
on Behalf of All Others Similarly Situated PLAINTIFF
No. 4:16-cv-624-DPM
BAPTIST HEALTH; BAPTIST HEALTH
HOSPITALS; DIAMOND RISK
INSURANCE LLC; CONTINENTAL
CASUALTY COMPANY; ADMIRAL
INSURANCE COMPANY; ADMIRAL
INDEMNITY COMPANY; TRONSHORE
INDEMNITY, INC.; and IRONSHORE
SPECIALTY INSURANCE COMPANY DEFENDANTS
MEMORANDUM OPINION AND ORDER
1. The parties have done their discovery on Whitley’s claims and
class-related issues. Whitley now seeks certification of a class, while
Baptist seeks to end the case on summary judgment. Here are the
material facts, taken in the light most favorable to Whitley where
genuinely disputed. Woods v. DaimlerChrysler Corporation, 409 F.3d 984,
990 (8th Cir. 2005).
2. In November 2013, Whitley, a Little Rock firefighter, was badly
injured in a car wreck. He was treated at Baptist. On admission, he
signed a form, which included an assignment of insurance benefits.
Ne 120-13 at 2. The provision is in the margin.” The parties’ arguments
center on the provision’s opening sentences: an across-the-board
assignment of all rights in applicable liability insurance; and a term
about who Baptist could seek payment from first. More on all this ina
moment. Baptist provided Whitley approximately $18,000 in medical
care. Ne 58-1 at 16.
Whitley had insurance from his employer through QualChoice.
Baptist did not send QualChoice a bill immediately for Whitley’s
original care. He had been hit by a driver going the wrong way on
Interstate 440. The liability of a third party was thus gin clear. In those
ASSIGNMENT OF INSURANCE BENEFITS: I hereby assign any
and all rights and benefits to which I may be entitled arising out of any
healthcare or liability insurance policy, Medicare or Medicaid to Baptist
Health. I authorize the full and undiscounted pursuit of payment on
my account from any available liability insurance policy or third party
source before submission of my account for payment to my own health
insurance company or to Medicare or Medicaid. I hold Baptist Health
harmless of any reduction in healthcare benefits by my insurance
company resulting from noncompliance with any clause or condition
contained in my policy which may require: Notification;
Precertification; Prior to Retrospective Authorization; or Utilization
Review of the medical services I receive. Assignment of Insurance
benefits is valid and binding until final payment of the account is
received.
circumstances, Baptist’s policy was to code the primary insurance for
the charges as “RevClaims,” and the patient’s insurance as secondary
insurance. That was done. RevClaims collects on bills for Baptist. It
filed an approximately $18,000 lien the month after Baptist’s initial care
of Whitley. Ne 130-4 at 6. The hospital’s policy in these likely third
party liability situations such as Whitley’s had another layer. If the lien
was not resolved within a few months, Baptist would also file a claim
with the patient’s health insurance. That window was usually six
months. Someone made a mistake on Whitley’s first round of charges;
the claim was sent to QualChoice after the claim period expired; and
QualChoice rejected it, declining to pay any benefits for those charges,
which would have been covered but for a small co-pay, based on
Baptist’s tardy submission. Ne 120-3 at 33 & 36.
Whitley needed more medical care. In January 2014, some two
months after the accident, he returned to Baptist, signed an identical
admissions agreement, and incurred approximately $46,000 of charges.
Ne 58-1 at 17-18. Baptist increased its lien to approximately $64,000.
Ne 130-4 at 7.
A few months later, in May 2014, Progressive—who insured the
driver who had run into Whitley — offered Whitley’s lawyer a policy-
limits settlement of $50,000. Ne 58-1 at 10-14. The lien stood between
Whitley and the money. ARK. CODE ANN. § 18-46-112. At that point,
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Baptist’s $64,000 lien exceeded the offer, so all the money would have
flowed to the hospital. Settlement talks stalled.
Baptist met its 180-day deadline to submit a claim to QualChoice
for the second round of Whitley’s care. QualChoice paid that claim in
the fall of 2014—Baptist received approximately $7,000. Based on the
reduced rates created by the Baptist/QualChoice provider agreement,
the hospital took an approximately $38,000 hit on the bill. Ne 120-3 at
34-35.
Even though QualChoice paid the agreed amount for Baptist’s
care of Whitley, the hospital did not reduce its lien. At the end of 2014,
the hospital renewed its lien for the full amount, approximately
$64,000. Ne 130-4 at 8. Baptist did the same thing in May of 2015.
Ne 130-4 at 9. At the end of 2015, approximately two years after
Whitley’s first round of care, Baptist reduced the lien to approximately
$19,000 —the full initial bill, plus a co-pay for the second round of care.
Ne 130-4 at 10. In mid-2016, Baptist’s lien expired by operation of law.
ARK. CODE ANN. § 18-46-106(a). Whitley filed this case a month later.
Baptist released the lien in the spring of 2017. Ne 130-4 at 11-15.
At some point thereafter, Whitley accepted Progressive’s $50,000
settlement offer. The money was divided between Whitley and his
lawyers, but Whitley has refused to give Baptist any specifics on the
division. Ne 116-2 at 20-22.
3. The parties’ interlaced arguments on both motions require the
Court to rule on some issues of Arkansas law. All these points go to
whether Baptist violated the Arkansas Deceptive Trade Practices Act,
tortiously interfered with a contract, broke a contract, or was unjustly
enriched in its handling of charges in these circumstances.
First, the Court rejects Whitley’s argument that the assignment
provision in Baptist’s admission agreement is invalid because tort
claims cannot be assigned. The first sentence of this part of the
agreement provides—“I hereby assign any and all rights and benefits
to which I may be entitled arising out of any healthcare or liability
insurance policy, Medicare or Medicaid to Baptist Health.” Ne 120-13
at 2. This sweeping provision is aimed at all potential insurance, but
can become superfluous where a lien is perfected. Unliquidated tort
claims for personal injuries may not be assigned. Southern Farm Bureau
Casualty Insurance Co. v. Wright Oil Co., 248 Ark. 803, 809, 454 S.W.2d 69,
72 (1970). Whitley is right about that. But, in Stuttgart Regional Medical
Center v. Cox, 343 Ark. 209, 33 S.W.3d 142 (2000), the Court assumed
that this kind of admission-agreement assignment was valid. Put that
precedent to one side. The dispositive point is that the Medical,
Nursing, Hospital, and Ambulance Service Lien Act, ARK. CODE ANN.
§§ 18-46-101 et seq., creates a right in the complying healthcare provider
to collect for its services through a lien on “any claim, right of action,
and money to which the patient is entitled because of that injury. . ..”
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ARK. CODE ANN. § 18-46-104(2). In circumstances like Whitley’s, the
statute does all the material legal work, not any assignment.
Second, the Court is not persuaded by Whitley’s generalized attack
on the Medical Lien statute. The Arkansas Supreme Court rejected a
similar effort in Stuttgart Regional. Whitley is right that the statute’s
purpose was to ensure treatment of indigents injured by others, giving
those who provided medical care some security in any future tort
recovery. Buchanan v. Beirne Lumber Co., 197 Ark. 635, 124 S.W.2d 813,
815 (1939). The statute’s plain words, though, reach further than this
prompting purpose, which is not unusual. This Court predicts that,
when squarely faced with the issue, the Arkansas Supreme Court
would not limit the Medical Lien statute to treatment of patients who
have no health insurance. Blankenship v. USA Truck, Inc., 601 F.3d 852,
856 (8th Cir. 2010). The Supreme Court would instead follow Stuttgart
Regional: In general, a medical provider can give notice and stand on
its lien, even if there is some applicable coverage floating around.
Third, in the admission agreement, Whitley also authorized “the
full and undiscounted pursuit of payment on my account from any
available liability insurance party or third-party source before
submission of my account for payment to my own health insurance
company or to Medicare or Medicaid.” Ne 120-13 at 2. The fighting
word is “before.” Whitley was injured in the wreck, prompting some
suggestion that he didn’t understand this authorization. His capacity
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was not impaired in any way, though, when he signed the same
agreement before his second round of treatment. Absent circumstances
not present here, Arkansas law holds Whitley to his agreement, even if
he didn’t read it, or have a lawyer’s understanding of it, before he
signed. Carmichael v. Nationwide Life Insurance Co., 305 Ark. 549, 552,
810 S.W.2d 39, 41 (1991).
Whitley resists this pre-submission authorization, saying that the
Baptist/QualChoice provider agreement did not allow patients to
make a different deal about payments with healthcare providers.
Whitley argues from § 4.9(d) of the provider agreement. This is the last
part of a four-part provision about billing covered patients. Ne 84 at
QC000355-56 (under seal). The entire provision is in the margin.”
“4.9 Member Billing; Exceptions.
4.9(a) Facility shall refrain, and shall cause Network Providers
employed or subcontracted by it to refrain, in every instance from
charging, billing, balance billing, or demanding any payment from any
Member for services which are determined would be Covered Medical
Services, but for which payment is disallowed, in whole or in part,
because of the failure of Facility to meet or comply with any of the
applicable requirements of this Agreement, including without
limitation applicable patient care reimbursement authorization
requirements, utilization review program requirements, and policies,
rules or regulations adopted or amended by QualChoice pursuant to
this Agreement.
4.9(b) Facility shall refrain, and shall cause Network Providers
employed or subcontracted by it to refrain, in every instance, from
charging, demanding a deposit from, or otherwise seeking to be
19 s
Whitley overreads the last part. Baptist and QualChoice agreed to
specific terms that protected Whitley and other “members” against
direct requests to pay the bills, subject to inapplicable exceptions for co-
payments and a few other things. Section 4.9(d) prevented Baptist and
Whitley from agreeing otherwise at some later point; section 4.9(d) did
not bar Whitley from agreeing to Baptist’s request for authorization to
go after a third party, the man who hit him, before submitting a claim
to QualChoice.
compensated by a Member for Covered Medical Services or any other
services, except for charges (i) for services which the Plan
Administrator determines are not Covered Medical Services, (ii) for
any applicable Copayment, Deductible or Coinsurance amounts, or (iii)
for services chargeable to a Member as provided in Section 4.10 hereof.
4.9(c) Except as may otherwise be permitted by Sections 2.3, 4.9(b)
and 4.10 hereof, Facility shall, in every instance, including but not
limited to nonpayment or insolvency by a Payor, or Plan
Administrator, or breach of this Agreement, refrain, and shall cause
Network Providers employed or subcontracted by it to refrain, from
billing, charging, collecting a deposit from, seeking compensation,
remuneration or reimbursement from, or having any recourse against
any Member, Payor, or persons other than the Plan Administrator,
except as provided for in Section 2.3 herein.
4.9(d) With respect to services performed during the term of this
Agreement, Section 4.9 shall survive the termination of this Agreement
regardless of the cause giving rise to termination and this provision
supersedes any oral or written contrary agreement now existing or
hereafter entered into between Facility and any Member or persons
acting on a Member’s behalf with respect to Covered Medical Services.
Fourth, § 4.9’s adamantine insulation of Whitley (and others) with
their own insurance against most direct claims by Baptist (and other
healthcare providers) is a significant benefit flowing from the
Baptist/QualChoice agreement. Baptist argues hard that Whitley has
no breach claim based on the provider agreement because he was
neither a party to it nor a third-party beneficiary of it. Whitley was not
party. And, as Baptist says, Arkansas law presumes that parties make
contracts only for their mutual benefit. Perry v. Baptist Health, 358 Ark.
238, 244, 189 S.W.3d 54, 58 (2004). Baptist also points to a provision of
the provider agreement, which it says makes plain that its business
relationship with QualChoice was solely about their mutual business,
not benefitting folks situated like Whitley. Section 7.6 is entitled
“Independence of the Parties.” It says, “QualChoice is independent of
Facility. Nothing in the Agreement shall be deemed to create a
relationship of employer and employee or principal and agent or any
relationship other than that of independent parties contracting with
each other solely for the purpose of carrying out the provisions of the
Agreement. Facility is not authorized to represent QualChoice for any
purpose. QualChoice is not authorized to represent Facility for any
purpose.”
The Court disagrees with Baptist about whether Whitley has a
solid contract claim as a third-party beneficiary of the provider
agreement. Of course this agreement was about the contracting parties’
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business. But that business was taking care of patients and paying for
their care. That was an animating purpose of the agreement's
provisions. The evidence shows a clear intent to benefit patients
situated like Whitley: Baptist agreed to accept reduced rates for
services in return for prompt payments from QualChoice, who also
provided a host of potential patients. Either on the facts taken in the
light most favorable to Whitley, or as a matter of law should the
provider agreement need construction on undisputed facts, the
conclusion that Whitley was a third-party beneficiary of the
Baptist/QualChoice contractual relationship is easily and reasonably
reached. Perry, 358 Ark. at 244, 189 S.W.3d at 58.
Fifth, does the record entitle Baptist to judgment as a matter of law
now on some or all of Whitley’s claims? As noted, the Court is not
persuaded by Whitley’s broad contention that the Baptist /QualChoice
provider agreement, which incorporated the provider manual,
Ne 130-3, forbade Baptist to go the lien route. The documents contained
no unequivocal bar. Another provider agreement in the record does.
Compare Aetna’s agreement, which states “Hospital hereby agrees that
in no event. . . shall Hospital bill, charge, collect a deposit from, seek
remuneration or reimbursement from, or have any recourse [against]
...any settlement fund or other res controlled by or on behalf of, or for
the benefit of, a Member for Covered Services.” Ne 120-22 at § 4.3.2
(under seal). The general and venerable rule is that parties contract
eit.
against the background of existing law. Petty v. Missouri & Arkansas
Railway Co., 205 Ark. 990, 167 S.W.2d 895, 898 (1943). The Medical Lien
statute dates from the 1930s, and the Arkansas Supreme Court spoke
approvingly about that law in the Stuttgart Regional case, which was
decided two decades ago.
The provider manual reserves the right to QualChoice to recover
benefits paid from a third party who caused injury, but does not say
Baptist cannot do so. Ne 130-3 at 28. See the full subrogation term in
the margin.“ Here, Baptist deploys the parties’ course of dealing. As
recounted in the depositions, QualChoice has left the pursuit of
“ Subrogation
To the extent permitted under applicable state and federal law and the
applicable benefit plan, QualChoice reserves the right to recover
benefits paid for a member’s health care service when a third party
causes the member's injury or illness.
If a QualChoice member who has been involved in a motor vehicle
accident or workers’ compensation injury visits your office, you should:
1. Record the name of the member’s automobile insurance company
and/or their workers’ compensation carrier
2. Verify the member’s eligibility through QualChoice
3. Submit any claims to QualChoice
Following these steps will help us expedite processing and help ensure
that the claim [is] paid accurately. Once the claims are submitted,
QualChoice works with Trover Solutions, a third-party subrogation
vendor, to determine if the member’s automobile insurer or the
workers’ compensation carrier is responsible for paying the claims (this
process varies depending on the provider’s agreement or the member’s
benefit plan).
Te
tortfeasors in the hospital’s hands, or rather, in the hospital's bill-
collector’s hands. Ne 120-2 at 233-36; Ne 120-3 at 31-32 (deposition
pagination). The parties’ course of dealing can modify their contractual
intentions. Trucker’s Exchange, Inc. v. Border City Foods, Inc., 67 Ark.
App. 231, 235-36, 998 S.W.2d 434, 437 (1999); RESTATEMENT (SECOND)
OF CONTRACTS §§ 202, 223. The way the parties did their business
weighs against Whitley’s claims, but the record is too divided for the
Court to rule for Baptist as a matter of law.
Whitley responds with several provisions of the provider
agreement that support his claim of wrongdoing.
e § 2.1(a) - The Facility will be compensated for Covered
Medical Services provided to members in accordance
with the provisions of Exhibit A annexed hereto and
incorporated herein. Facility shall accept such amounts
paid, in addition to any applicable Member Copayments,
Deductible, and/or Coinsurance, as payment in full for
such Covered Medical Services.
e §4.8(a) - Facility shall bill QualChoice or applicable Payor
for its services and the services of Network Providers
employed or subcontracted by it.
e § 4.9%c) - Except as may otherwise be permitted by
Sections 2.3, 4.9(b) and 4.10 hereof, Facility shall, in every
instance, including but not limited to nonpayment or
insolvency by a Payor, or Plan Administrator, or breach
of this Agreement, refrain, and shall cause Network
Providers employed or subcontracted by it to refrain,
from billing, charging, collecting a deposit from, seeking
«12
compensation, remuneration or reimbursement from, or
having any recourse against any Member, Payor, or
persons other than the Plan Administrator, except as
provided for in Section 2.3 herein.
e § 4.18 - Facility shall submit to the Plan Administrator or
Payor within one hundred and eighty (180) days of
provision of Covered Medical Services, accurate and
complete claims (“clean claims”). . ..
Whitley reads the “shall” in these provisions as “must,” and the word
often carries that meaning—a mandate. Marcum v. Wengert,
344 Ark. 153, 165, 40 S.W.3d 230, 238 (2001). But, shall can also carry a
softer meaning, something closer to may. Gutierrez de Martinez v.
Lamagno, 515 U.S. 417, 432-33 n.9 (1995). One of the main changes in
the recent restyling of the Federal Rules, for example, was to replace
shall with must when the rule was mandatory, eliminating the latent
ambiguity. E.g., FED. R. Civ. P. 1, Advisory Committee Notes to 2007
Amendment.
Whitley argues hard from § 4.9(c) in particular. Boiled down, this
term of the provider agreement says that (with inapplicable exceptions)
Baptist “shall, in every instance ... refrain... from... seeking
compensation, remuneration or reimbursement from, or having any
recourse against any Member, Payor, or persons other than the Plan
Administrator .. ..” Ne 84 at QC000356 (under seal). Whitley says the
other driver and its insurer qualify as either payors or persons. The
aIZ<
payor road doesn’t go far. Under § 1.25 of the provider agreement,
“’Payor’ means the party that is financially responsible for paying for
Covered Medical Services provided in accordance with this Agreement
and the applicable Health Plan. A Payor may be a self-funded
employer (“Employer Group”), insurance company, health
maintenance organization (“HMO”), or other party.” No 84 at
QC000351. This provision is aimed at entities such as QualChoice,
though it might be stretched to cover tortfeasors or their insurers. But
that reading runs into the Medical Lien statute, the background law,
plus the Baptist-QualChoice course of dealing. Through that statute,
Baptist was seeking recourse—but only against the tortfeasor’s
coverage, which generated the settlement pot, rather than against some
“person.” The hospital filed a lien not a lawsuit. Whitley has an
argument here, though not as strong as the one an Aetna insured would
have. Aetna’s provider agreement barred Baptist from any recourse
against any settlement fund or res that benefitted the insured. Ne 120-22
at § 4.3.2 (under seal). Not so, here.
A word about Arkansas Insurance Department Rule 21. That rule
guides plans on how to coordinate benefits and pay and process claims.
Ne 116-1 at 6. The Court is not persuaded by Baptist’s arguments that,
in these circumstances, it is simply coordinating benefits. The other
driver’s coverage was not a “Plan” within the meaning of Rule 21,
which excludes “accident only coverage.” Ne 116-1 at 9-10.
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All this makes a murky stew rather than a clear broth. And all the
terms of Baptist’s provider agreements with Health Advantage, Blue
Cross Blue Shield, Humana, Aetna, and UnitedHealthcare are not even
in the pot yet.
Whitley’s strongest claim (whatever the doctrinal label) is that
Baptist persisted in its approximately $64,000 lien for more than a year
after getting paid by QualChoice for the second round of treatment.
Whatever the provider agreement and manual may have required on
the front end, and however the parties’ course of dealing may have
modified their contractual relationship, Whitley has a robust claim that
Baptist erred by persisting with the full lien after accepting
QualChoice’s payment for the second round of treatment, which
generated roughly two-thirds of the bill. “Facility shall accept such
amounts paid, in addition to any applicable Member Copayments,
Deductible, and/or Coinsurance, as payment in full for such Covered
Medical Services.” No 84 at QC000351, § 2.1(a) (under seal with
emphasis added). That term is clear, even if it does contain a dreaded
and/or.
Each of the five other provider agreements contained an equally
strong and equally clear commitment by Baptist. The hospital agreed
with Aetna that “payment [by the Plan] will be considered full and final
payment” for the claims. Ne 120-22 at § 4.1.1 (under seal). It agreed
with Humana that “Payments made . . . [less copayments] shall be
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accepted by [Baptist] as payment in full from Payors for all Covered
Services.” Ne 120-21 at § 13.1 (under seal). With both Health Advantage
and Blue Cross Blue Shield, Baptist agreed that it would “accept [the
Plan payment] as payment in full for covered services.” No 120-19 at
§ II.B (under seal); No 120-20 at § II.B (under seal). And Baptist agreed
with UnitedHealthcare that the “[Plan payment], together with any co-
payment, deductible or coinsurance for which the Customer is
responsible . . . is payment in full for a Covered Service.” Ne 120-23 at
§ 6.7 (under seal). A jury could find that, as with Whitley, the folks with
coverage through these other companies should not have faced liens
after Baptist accepted an agreed, albeit lower, payment for the services.
And, as best the Court can tell at this point, none of the provider
agreements contains any provision that would, as a matter of law,
clearly undermine a claim by covered individuals for Baptist’s conduct.
Some of the agreements do clearly renounce an intent to create third-
party beneficiary rights in a covered patient. The Health Advantage
agreement, for example, states that “there is no intent by either party to
create or establish third party beneficiary status or rights as to any
patient[.]” Ne 120-19 at § X (under seal). And Humana and Baptist
agreed “the parties ... do not intend to create by this Agreement any
rights in other parties as third party beneficiaries of this Agreement,
including, without limitation, Members.” Ne 120-21 at § 3.1 (under
seal). These strong words probably preclude a third-party beneficiary
atte
claim for individuals whose care was covered by those provider
agreements. See Perry, 358 Ark. at 246, 189 S.W.3d at 59; Retro Television
Network, Inc. v. Luken Communications, LLC, 696 F.3d 766, 769 (8th Cir.
2012). But, depending on the jury’s findings at trial, those individuals
could still recover damages for the same conduct by Baptist on one of
the other pleaded legal theories.
4, Which claims go forward? A jury could conclude that tying up
Whitley’s settlement funds by maintaining a lien for the full bill after
accepting payment for most of it was deceptive under the ADTPA.
ARK. CODE ANN. § 4-88-107(a)(10). Whitley also has a solid breach claim
as a third-party beneficiary of the Baptist/QualChoice provider
agreement. This claim is likewise rooted in Baptist’s persisting in the
full lien after accepting the negotiated, reduced rate from QualChoice.
Whitley’s claim that Baptist tortiously interfered with his health
insurance contract with QualChoice could survive, but it is dismissed
without prejudice as duplicative. Not every interference is a tort. There
must be improper interference. Stewart Title Guaranty Co. v. American
Abstract & Title Co., 363 Ark. 530, 549, 215 S.W.3d 596, 607 (2005).
Baptist had the right to go the lien route instead of filing a claim with
QualChoice. It did not have the right to accept QualChoice’s payment
without reducing a lien, or eliminating it in situations where Baptist
accepted payment for all services rendered. That wrongdoing,
however, is well covered by the contract and statutory claims.
e1%s
The unjust enrichment claim fails. Receiving something of value
is an essential element. El Paso Production Co. v. Blanchard, 371 Ark. 634,
646, 269 S.W.3d 362, 372 (2007). Baptist’s holding up the settlement line
harmed Whitley; but it’s not clear that Baptist received something of
value by doing so. In any event, when the benefit received can’t be
adequately measured, as here, courts limit or deny restitution. E/ Paso
Production, 371 Ark. at 647, 269 S.W.3d at 372; RESTATEMENT (THIRD) OF
RESTITUTION & UNJUST ENRICHMENT § 44 (2011). What can be done is to
assess the damages Whitley suffered from the delay in receiving his
settlement money. His overlapping statutory and contract claims for
the same conduct by Baptist ensure he will be made whole for that
wrong. Deutsche Bank National Trust Co. v. Austin, 2011 Ark. App. 531,
*8, 385 S.W.3d 381, 387 (2011).
5. This case is appropriate for class resolution. See FED. R. □□□□
P. 23(a) & (b)(3). Whitley’s proposed class, as modified by the Court,
meets each of Rule 23(a)’s requirements - numerosity, commonality,
typicality, and adequacy of representation. This is a Rule 23(b)(3)
group: questions of law common to class members predominate over
questions affecting only individuals; and a class is superior to other
methods, in terms of fairness and efficiency, for adjudicating the
controversy. The Court therefore certifies the following class under
Fed. R. Civ. P. 23(b)(3):
alé«
All Arkansas residents who, since 30 July 2011, received any
type of healthcare treatment from any Arkansas entity
owned, controlled, or managed by Baptist Health or Baptist
Health Hospitals; (i) the treatment was covered by valid, in
network, health coverage that was underwritten,
administered, or supported by (a) QualChoice of Arkansas,
(b) Health Advantage, (c) Blue Cross Blue Shield,
(d) Humana, (e) Aetna, or (f) UnitedHealthcare; (ii) Baptist
submitted the charges for the treatment to the patient's
health insurer for payment; (iii) Baptist accepted payment
from the health insurer for the treatment; (iv) Baptist (itself
or through its agents) sought payment for the treatment
from sources other than the health insurer by maintaining or
asserting hospital lien(s) for the treatment after accepting
payment from the health insurer; and (v) the individual
sustained damages.
This class is sufficiently numerous that joinder of all members is
impracticable. FED. R. CIv. P. 23(a)(1). Baptist, through RevClaims, has
asserted liens for the accounts of more than six thousand patients
covered by the six major health insurance carriers. Ne 121 at 13;
No 120-15 & Ne 120-16 (under seal); Ne 120-6 at 40 (deposition
pagination). It’s unclear exactly how many of these patients Baptist
treated like Whitley. But evidence of the exact class size isn’t necessary
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so long as the circumstances allow for a reasonable estimate. Riedel v.
XTO Energy, Inc., 257 F.R.D. 494, 506-07 (E.D. Ark. 2009); 1 NEWBERG
ON CLASS ACTIONS, § 3:13 (5th ed.). Considering the thousands of
Baptist liens, and that Baptist maintained its lien against Whitley for
more than a year after accepting payment from QualChoice, it is likely
that Baptist held on to other liens for too long. The Court infers that the
class is big enough to make joinder of all the affected former patients
impracticable. Compare Arnold Chapman & Paldo Sign & Display Co. v.
Wagener Equities, Inc., 747 F.3d 489, 492 (7th Cir. 2014). Some targeted
discovery in the next few months will generate a firmer number on class
size.
Commonality exists. The remaining question in the case is
whether Baptist could assert or persist in liens after accepting payment
from the patient’s health insurance plan. The answer to this common
question will substantially resolve the case in one stroke. FED. R. CIV.
P. 23(a)(2); Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349-50 (2011). If
Baptist couldn’t act as it did, then each patient who suffered damages
from Baptist’s assertion or persistence in a lien after accepting payment
from the patient’s health insurance plan suffered the same injury. Wal-
Mart Stores, 564 U.S. at 350. And the common question predominates
over any questions affecting only specific individuals, such as the
amount of damage. See FED. R. CIV. P. 23(a)(2) & (b)(3).
20 -
Whitley’s claim is typical of the group. FED. R. CIv. P. 23(a)(3);
DeBoer v. Mellon Mortgage Co., 64 F.3d 1171, 1174-75 (8th Cir. 1995). He
shares the same interest with the rest of the class members. He will
fairly and adequately protect class members’ interests through his
capable and experienced lawyers. FED. R. Civ. P. 23(a)(4). And the
Court appoints those lawyers as class counsel with one caution. FED.
R. Civ. P. 23(c)(B). Whitley has eight lawyers of record. They must
divide and conquer, rather than duplicating effort.
Finally, a class action is the best way to fairly and efficiently
manage this case to resolution. See FED. R. CIV. P. 23(b)(3). Individual
actions would be cost prohibitive because of the relatively small
individual recovery and the expense of litigation; the Court knows of
no other similar pending cases against Baptist; this district is a practical
forum for the parties, particularly Baptist; and the limited nature of the
remaining claims demonstrates manageability.
koe x
Baptist’s motion for summary judgment, Ne 116, is partly granted
and partly denied. Whitley’s motion for class certification, Ne 120, is
partly granted as modified and partly denied. The Court directs the
parties to do some targeted discovery to provide the Court a firmer
number on class size. The Court also directs the parties to confer and
make a proposal about the form, substance, and method of notice. Joint
-21-
report on class size and notice issues due by 15 November 2019. A
Second Amended Final Scheduling Order will issue.
So Ordered.
Manvel fr
D.P. Marshall Jr.
United States District Judge
13 Septenrhta 20/9
ats