The opinion
IN THE SUPREME COURT OF
CALIFORNIA
TAYLOR CAPITO,
Plaintiff and Appellant,
v.
SAN JOSE HEALTHCARE SYSTEM, LP,
Defendant and Respondent.
S280018
Sixth Appellate District
H049646
Santa Clara County Superior Court
20CV366981
December 23, 2024
Justice Liu authored the opinion of the Court, in which Chief
Justice Guerrero and Justices Corrigan, Kruger, Groban,
Jenkins, and Evans concurred.
CAPITO v. SAN JOSE HEALTHCARE SYSTEM, LP
S280018
Opinion of the Court by Liu, J.
An extensive scheme of state and federal law obligates
hospitals to make specific disclosures about the prices of medical
services, including fees for evaluation and management services
(EMS) for emergency room patients. California’s Payers’ Bill of
Rights (Health & Saf. Code, § 1339.50 et seq.) requires most
hospitals in the state to publish online or at the hospital a
“chargemaster” listing the uniform charges for its services. (See
Health & Saf. Code, § 1339.51, subds. (a)(1), (b)(1); see also 42
U.S.C. § 300gg-18(e) [imposing similar requirements for
Medicare participating hospitals].) The state law also requires
hospitals to “post a clear and conspicuous notice in its
emergency department” informing patients that the
chargemaster is available for review and how it may be
accessed. (Health & Saf. Code, § 1339.51, subd. (c); all
undesignated statutory references are to this code.)
The question here is whether hospitals have a duty,
beyond what is required by the relevant statutory and
regulatory scheme, to notify emergency room patients that they
will be charged EMS fees. Plaintiff Taylor Capito argues they
do. She filed a class action suit against San Jose Healthcare
System, LP, also known as Regional Medical Center San Jose
(Regional), challenging the assessment of EMS fees for two
emergency room visits. Capito does not dispute that Regional
complied with all relevant disclosure obligations, including
listing the EMS fees in the chargemaster. She also does not
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Opinion of the Court by Liu, J.
allege that the EMS fees were excessive or that she was charged
for services not rendered. Instead, she claims that Regional has
a duty not only to disclose EMS fees in the chargemaster, but
also to provide notice of those fees before services are provided
to emergency room patients, such as through “posted signage in
the emergency room, on its website, and/or during the patient
registration process.” Regional’s failure to do so, Capito argues,
constitutes an “unlawful, unfair or fraudulent business” practice
under the Unfair Competition Law (UCL) (Bus. & Prof. Code,
§ 17200 et seq.) and violates the Consumers Legal Remedies Act
(CLRA) (Civ. Code, § 1750 et seq.). The trial court and the Court
of Appeal rejected Capito’s claims.
We agree with the courts below. Hospitals do not have a
duty under the UCL or CLRA, beyond their obligations under
the relevant statutory and regulatory scheme, to disclose EMS
fees prior to treating emergency room patients. Requiring such
disclosure would alter the careful balance of competing
interests, including price transparency and provision of
emergency care without regard to cost, reflected in the
multifaceted scheme developed by state and federal authorities.
Capito has not sufficiently alleged facts showing that the lack of
such disclosure is “unlawful, unfair or fraudulent” on any theory
she presents under the UCL or CLRA. Accordingly, we affirm
the Court of Appeal’s judgment.
I.
Because “emergency medical care is a vital public service”
that “is necessary for the protection of the health and safety” of
all, its provision and pricing have long been subject to extensive
regulation. (Stats. 1987, ch. 1240, § 1, p. 4406; see § 1339.50 et
seq.; § 1317; 42 U.S.C. § 1395dd (Federal Emergency Medical
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Opinion of the Court by Liu, J.
Treatment and Active Labor Act; EMTALA).) Under state and
federal law, qualifying hospitals must provide emergency care
“to any person requesting the services or care, or for whom
services or care is requested, for any condition in which the
person is in danger of loss of life, or serious injury or illness.”
(§ 1317, subd. (a); see 42 U.S.C. § 1395dd [same].) “In no event
shall the provision of emergency services and care be based
upon, or affected by, the person’s . . . insurance status, economic
status, [or] ability to pay.” (§ 1317, subd. (b); see 42 U.S.C.
§ 1395dd(h); 42 C.F.R. § 489.24(a)(1) (2024) [Medicare hospitals
must provide emergency care “regardless of ability to pay”].)
California law “requires” emergency care providers to stabilize
patients “without first questioning the patient’s ability to pay.
[Citation.] Federal law is similar. (42 U.S.C. § 1395dd[, subd.
(h)]; [citation].)” (Prospect Medical Group, Inc. v. Northridge
Emergency Medical Group (2009) 45 Cal.4th 497, 504; see
42 C.F.R. § 489.24(d)(4)(i)–(ii) (2024).) Federal law also
prohibits emergency room registration procedures that
“may . . . unduly discourage individuals from remaining for
further evaluation.” (42 C.F.R. § 489.24(d)(4)(iv) (2024).)
With regard to pricing, California hospitals must make
publicly available their chargemasters — “a uniform schedule of
charges represented by the hospital as its gross billed charge for
a given service or item, regardless of payer type.” (§ 1339.51,
subd. (b)(1); see id., subds. (a)–(c); 42 U.S.C. § 300gg-18(e)
[“Each hospital operating within the United States shall for
each year establish (and update) and make public (in accordance
with guidelines developed by the Secretary) a list of the
hospital’s standard charges for items and services provided by
the hospital.”]; 45 C.F.R. § 180 (2024) [providing guidelines].) In
addition, California hospitals must file their chargemasters
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with the state’s Department of Health Care Access and
Information (HCAI), previously called the Office of Statewide
Health Planning and Development (OSHPD). (§ 1339.55; see
Assem. Bill No. 133 (2021–2022 Reg. Sess.) § 31.) They must
also “compile a list of 25 common outpatient procedures and
shall submit annually to [HCAI] a list of its average charges for
those procedures.” (§ 1339.56, subd. (a).) HCAI publishes the
list on its website. (Ibid.) Hospitals must also furnish this list
of 25 common procedures to “any person upon request.”
(§ 1339.56, subd. (c).) Further, Medicare participating hospitals
must “ ‘post standard charges for at least 300 shoppable services
that can be planned in advance.’ ” (Gray v. Dignity Health
(2021) 70 Cal.App.5th 225, 233 (Gray); 84 Fed.Reg. 65564, 65571
(Nov. 27, 2019).)
These lists, like the chargemaster, must comply with a
variety of submission, formatting, and other requirements.
(See, e.g., 45 C.F.R. §§ 180.20–180.60; HCAI, Chargemaster
Submission Guide <https://hcai.ca.gov/wp-content/uploads/
2023/05/Chargemaster-Submission-Guide-_-ADA.pdf> [as of
Dec. 23, 2024] (HCAI Guide); all Internet citations in this
opinion are archived by year, docket number, and case name at
<http://www.courts.ca.gov/38324.htm>.) Every listed service
must be labeled with a description, charge, and code, typically a
Current Procedural Terminology (CPT) code. (HCAI Guide;
45 C.F.R. 180.60(b)(8) (2024).) “CPT codes are standardized
five-digit numeric codes established by the American Medical
Association. They are used by health care providers to quickly
describe to insurers the services for which the provider is
billing.” (People ex rel. State Farm Mutual Automobile Ins. Co.
v. Rubin (2021) 72 Cal.App.5th 753, 764.)
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Evaluation and management services “provided in the
emergency department” are assigned five different CPT codes.
(72 Fed.Reg. 66790 (Nov. 27, 2007); see id. at p. 66789 [listing
the CPT codes]; HCAI, AB 1045 Template for Reporting 25 Most
Common Procedures <https://view.officeapps.live.com/op/
view.aspx?src=https%3A%2F%2Fhcai.ca.gov%2Fwp-content%
2Fuploads%2F2024%2F05%2F25-Common-Optional-
Reporting-Form-Template-2024-1.xlsx> [as of Dec. 23, 2024]
(HCAI Reporting Template).) Each code “reflect[s] the activities
of physicians and do[es] not . . . fully describe the range and mix
of services provided by hospitals during visits of clinic and
emergency department patients.” (72 Fed.Reg. 66790 (Nov. 27,
2007).) These services must be medically necessary and can
include preparing “to see the patient (like review of tests),”
reviewing medical history, “[o]rdering medications, tests, or
procedures,” “[r]eferring and communicating with other health
care professionals,” “[d]ocumenting clinical information in the
electronic or other health record,” and engaging in various levels
of medical decision-making. (Centers for Medicare and
Medicaid Services, Evaluation and Management Services Guide
(Sept. 2024) p. 15 <https://www.cms.gov/Outreach-and-
Education/Medicare-Learning-Network-MLN/MLNProducts/
Downloads/eval-mgmt-serv-guide-ICN006764.pdf> [as of Dec.
23, 2024] (CMS EMS Guide); see id. at pp. 13–15, 17.) Thus,
each code relates “the intensity of hospital resources to the
different levels of effort represented by the codes.” (72 Fed.Reg.
66805 (Nov. 27, 2007); HCAI Reporting Template, supra
[describing the levels as ranging from “straightforward” to “high
level”].)
Beyond these obligations, “the Hospital Fair Pricing Act
(§ 127400 et seq.) requires California hospitals to establish, give
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notice of, and administer financial aid and charity care policies.
(§ 127405, subd. (a)(1)(A).)” (Gray, supra, 70 Cal.App.5th at
p. 231.) And “[f]or a person without health coverage, a hospital
shall provide the person with a written estimate of the amount
the hospital will require the person to pay for the health care
services, procedures, and supplies that are reasonably expected
to be provided . . . . In addition to the estimate, the hospital
shall provide information about its financial assistance and
charity care policies . . . . The hospital shall also provide the
person with an application form for financial assistance or
charity care.” (§ 1339.585.) These duties to the uninsured,
however, “shall not apply to emergency services provided to a
person pursuant to Section 1317.” (Ibid.)
II.
“This case comes to us on appeal from the trial court’s
sustaining of a demurrer. For purposes of reviewing a
demurrer, we accept the truth of material facts properly pleaded
in the operative complaint, but not contentions, deductions, or
conclusions of fact or law. We may also consider matters subject
to judicial notice.” (Yvanova v. New Century Mortgage Corp.
(2016) 62 Cal.4th 919, 924.) “Accordingly, we assume the truth
of the allegations in [Capito’s] second amended complaint.” (Lee
v. Hanley (2015) 61 Cal.4th 1225, 1230.)
In June 2019, Capito was treated twice at Regional’s
emergency department. During the visits, Capito signed
Regional’s “Conditions of Admission and Consent for Outpatient
Care” (COA) form. The COA contained a “Financial Agreement”
that required Capito to “pay the Patient’s account at the rates
stated in the hospital’s price list (known as the ‘Charge Master’)
effective on the date the charge is processed for the service
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provided, which rates are hereby expressly incorporated by
reference as the price term of this agreement to pay the Patient’s
account.” (Boldface omitted.) The Financial Agreement also
noted: “Some special items will be priced separately if there is
no price listed on the Charge Master. An estimate of the
anticipated charges for services to be provided to the Patient is
available upon request from the hospital. Estimates may vary
significantly from the final charges based on a variety of factors,
including, but not limited to, the course of treatment, intensity
of care, physician practices, and the necessity of providing
additional goods and services.” Capito also initialed part of the
COA that stated she had “been given the opportunity to read
and ask questions about the [COA], specifically including but
not limited to the financial obligation’s provisions.” (Boldface
omitted.)
Before discounts, Capito’s bills for her two emergency
room visits totaled $41,016. Each bill included a “ ‘Level 4’
Evaluation and Management Services Fee” of $3,780. Applying
adjustments and discounts, Regional reduced her bills to
$8,855.38. Capito alleges she “was shocked and dismayed” by
the EMS fee. The COA did not specifically reference the EMS
fee, and Capito “received no notice or warning, in posted signage
in the emergency room or at the registration window/desk, [or]
verbally at the time of registration,” about the EMS fee.
According to Capito, had she been so warned about the EMS fee,
she would have left Regional “and sought less expensive
treatment elsewhere.”
Regional charges EMS fees at one of five levels after a
patient is discharged, based on a formula or algorithm
undisclosed to patients. As with the standardized CPT codes
discussed above, the five levels reflect the intensity of resources
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used to treat the patient, who may be facing anything from a
minor ailment to a complex, life-threatening emergency.
Regional discloses the EMS fees in its chargemaster and in its
list of 25 most common procedures, both of which Regional has
filed with HCAI. Regional charged the following EMS fees in
2019: Level 1 ($672); Level 2 ($1,660); Level 3 ($2,836); Level 4
($3,780); and Level 5 ($5,635). The Level 4 EMS fee that Capito
was charged for each of her visits was described in the list of 25
most common procedures as “high severity without signi[f]icant
threat.” According to Capito, Regional charges each emergency
room patient the EMS fee “simply for seeking treatment in
Hospital’s emergency room and is designed to cover various
‘overhead’ type expenses of operating an emergency room which
are not billed individually.”
Capito filed a class action complaint against Regional in
June 2020, which she amended shortly thereafter. She alleged
violations of the CLRA on the ground that Regional failed to
provide emergency room patients sufficient notice of the EMS
fee. Regional demurred and moved to strike the class
allegations. The trial court overruled the demurrer but granted
Regional’s motion to strike the class allegations, finding that
issues of reliance and materiality in this case would be too
individualized for class treatment. Capito appealed the latter
ruling.
Meanwhile, Capito filed her second amended complaint in
March 2021, repeating the CLRA claims that survived
demurrer. Capito alleged two additional causes of action, one
for declaratory judgment and injunctive relief under Code of
Civil Procedure section 1060 and one for violation of the UCL.
Capito’s “[c]omplaint is not that [Regional] fails to list an EMS
Fee as a line item in the Hospital’s published Chargemaster, or
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that [Regional] fails to list the price of such EMS Fees in the
Hospital’s Chargemaster, but rather the fact that [Regional]
gives no notification or warning that it charges a separate EMS
Fee for an emergency room visit. As a result, emergency room
patients end up being surprised by a substantial charge added
to their bill that they were not expecting and did not agree to
pay. This separate charge is not mentioned or disclosed in [the
COA].” She also alleged that the EMS fees, which were
“basically designed to cover the overhead and Hospital’s general
staffing, administrative, equipment, and supply costs incurred
in operating an emergency room,” would have been “a
substantial factor” in whether a patient would seek care at
Regional or elsewhere. Regional again demurred, and this time
the trial court sustained the demurrer without leave to amend.
The Court of Appeal affirmed. It followed the reasoning in
Gray, supra, 70 Cal.App.5th 225 and Saini v. Sutter Health
(2022) 80 Cal.App.5th 1054 (Saini), both of which held that
hospitals do not have a duty to disclose EMS fees to emergency
room patients beyond what is required by the relevant statutory
and regulatory framework. As in Gray and Saini, the Court of
Appeal in this case found it prudent to take a “deferential
approach to the legislative and regulatory determinations of
what constitutes requisite notice of the costs of emergency
medical services.” It concluded that Capito’s demand for notice
could not form the basis of a CLRA or UCL claim because it
exceeded and displaced the legislative and regulatory
requirements. The Court of Appeal also affirmed the trial
court’s order striking the class allegations in Capito’s first
amended complaint.
We granted review in light of a split among the Courts of
Appeal. (Compare Gray, supra, 70 Cal.App.5th 225 [finding no
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duty to disclose EMS fees beyond what is required by the
statutory and regulatory scheme]; Saini, supra, 80 Cal.App.5th
1054 [same]; Moran v. Prime Healthcare Management, Inc.
(2023) 94 Cal.App.5th 166, review granted and held Nov. 1, 2023
(Moran) [same] with Naranjo v. Doctors Medical Center of
Modesto, Inc. (2023) 90 Cal.App.5th 1193 (Naranjo), review
granted and held July 26, 2023 [rejecting Gray and Saini];
Torres v. Adventist Health System/West (2022) 77 Cal.App.5th
500 (Torres) [holding that nondisclosure of EMS fees could be
actionable under the CLRA].)
III.
Capito argues that Regional has a duty to warn emergency
room patients about EMS fees “prior to providing treatment
triggering such a charge” separate and apart from disclosing
those fees in the mandated pricelists. She claims that Regional’s
nondisclosure of the fees in the emergency room is unfair,
unlawful, and fraudulent in violation of the UCL and CLRA. We
are unpersuaded. The “California Legislature, the United
States Congress, and numerous rulemaking bodies have already
decided what pricing information to make available in a
hospital’s emergency room. Just as importantly, they have
decided what not to include in those requirements. The reason
for this extensive statutory and regulatory scheme is to strike a
balance between price transparency and dissuading patients
from avoiding potentially life-saving care due to cost.” (Moran,
supra, 94 Cal.App.5th at p. 186.) We hold that neither the UCL
nor CLRA requires further disclosure of EMS fees beyond what
the regulatory scheme requires.
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A.
We first consider Capito’s claim that Regional’s failure to
inform patients of the EMS fee in the emergency room before
services are provided is “unfair” under the UCL.
The UCL’s scope is “broad.” (Cel-Tech Communications,
Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163,
180 (Cel-Tech).) “[I]t does not proscribe specific practices.
Rather, as relevant here, it defines ‘unfair competition’ to
include ‘any unlawful, unfair or fraudulent business act or
practice.’ ([Bus. & Prof. Code, § 17200].) Its coverage is
‘sweeping, embracing “ ‘anything that can properly be called a
business practice and that at the same time is forbidden by
law.’ ” ’ ” (Ibid., fn. omitted.) “By proscribing ‘any unlawful’
business practice, ‘section 17200 “borrows” violations of other
laws and treats them as unlawful practices’ that the unfair
competition law makes independently actionable.” (Ibid.)
“However, the law does more than just borrow. The statutory
language referring to ‘any unlawful, unfair or fraudulent’
practice . . . makes clear that a practice may be deemed unfair
even if not specifically proscribed by some other law. ‘Because
Business and Professions Code section 17200 is written in the
disjunctive, it establishes three varieties of unfair
competition — acts or practices which are unlawful, or unfair,
or fraudulent. “In other words, a practice is prohibited as
‘unfair’ or ‘deceptive’ even if not ‘unlawful’ and vice versa.” ’ ”
(Ibid.)
The UCL does not define “unfair,” and the “standard for
determining what business acts or practices are ‘unfair’ in
consumer actions under the UCL is currently unsettled. (See
Aleksick v. 7-Eleven, Inc. (2012) 205 Cal.App.4th 1176, 1192
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[public policy that is predicate for action must be tethered to
specific constitutional, statutory or regulatory provisions];
Ticconi v. Blue Shield of California Life & Health Ins. Co. (2008)
160 Cal.App.4th 528, 539 [applying balancing test but also
examining whether practice offends established public policy or
is immoral, unethical, oppressive, unscrupulous or substantially
injurious to consumers]; Camacho v. Automobile Club of
Southern California (2006) 142 Cal.App.4th 1394, 1403
[consumer injury must be substantial and neither outweighed
by countervailing benefits nor avoidable by consumers];
Progressive West Ins. Co. v. Superior Court (2005) 135
Cal.App.4th 263, 285 [(Progressive West)] [impact of the act or
practice on victim is balanced against reasons, justifications and
motives of the alleged wrongdoer].)” (Zhang v. Superior Court
(2013) 57 Cal.4th 364, 380, fn. 9; see also Nationwide Biweekly
Administration, Inc. v. Superior Court (2020) 9 Cal.5th 279,
303.) We have no need to decide the UCL standard for “unfair”
business conduct here. Capito alleges only that Regional’s
“practices offend established public policies, and are immoral,
unethical, oppressive, and unscrupulous.” Like the Court of
Appeal, we believe Capito has failed to show that Regional’s
conduct is “unfair” under these standards.
Capito claims that Regional’s nondisclosure of the EMS
fee to emergency room patients contravenes the public policy in
favor of price transparency. She contends that to the extent the
Payers’ Bill of Rights and EMTALA have any relevance to her
claims, they support the view that Regional has a duty to
disclose the EMS fee. She notes that these laws embody “the
importance of, and need for, greater hospital pricing
transparency, with the benefits of promoting competition and
reducing medical costs.” (See 84 Fed.Reg. 65524–65528 (Nov.
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27, 2019) [public comments to and responses from federal
regulators discussing the same].) Referring to Assembly Bill
No. 1627 (2003–2004 Reg. Sess.), Capito argues that the
Legislature enacted the Payers’ Bill of Rights “to discourage
hospitals from playing games with hospital pricing in a way that
gouges private payers and patients.” She also cites the federal
government’s “concern[] that challenges continue to exist for
patients due to insufficient price transparency,” such as
“patients being surprised by facility fees and physician fees for
emergency department visits.” (83 Fed.Reg. 41686 (Aug. 17,
2018).)
To be sure, price transparency in healthcare is a
significant concern under state and federal law. The Legislature
has imposed extensive chargemaster and price list obligations
on hospitals “to increase the transparency in hospital pricing to
enable consumers to comparison shop for medical services,” and
federal regulators have done the same. (Gray, supra, 70
Cal.App.5th at p. 229; 84 Fed.Reg. 65564, 65571 (Nov. 27,
2019).) But price transparency is not the only concern. As
discussed, state and federal laws also seek to ensure that
emergency medical care is promptly provided to those who need
it and that “[i]n no event shall the provision of emergency
services and care be based upon, or affected by, the
person’s . . . insurance status, economic status, [or] ability to
pay.” (§ 1317, subd. (b); see 42 U.S.C. § 1395dd(h); 42 C.F.R.
§ 489.24(a) (2024).) Hospitals are required to stabilize patients
before discussing costs or ability to pay (§ 1317, subd. (d); 42
U.S.C. § 1395dd, subd. (h); 42 C.F.R. § 489.24(d)(4)(ii) (2024)),
and the only cost notice required in the emergency room is a sign
informing patients of the availability of the hospital’s
chargemaster (§ 1339.51, subds. (a), (c); 84 Fed.Reg. 65536 (Nov.
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27, 2019)). “Together, this multifaceted statutory and
regulatory scheme reflects a strong legislative policy to ensure
that emergency medical care is provided immediately to those
who need it, and that billing disclosure requirements are not to
stand in the way of this paramount objective.” (Gray, supra, 70
Cal.App.5th at p. 241.)
Indeed, the Legislature specifically exempted emergency
rooms from mandatory, specific disclosures of costs to uninsured
patients — individuals who would arguably benefit the most
from additional disclosures of EMS fees. As noted, section
1339.585 requires that “[f]or a person without health coverage,”
hospitals must provide “a written estimate of [costs] for the
health care services, procedures, and supplies that are
reasonably expected to be provided,” but it says this disclosure
requirement “shall not apply to emergency services provided to
a person pursuant to section 1317.” This exclusion allows
hospitals to implement “reasonable registration processes” in
emergency rooms without “unduly discourag[ing] individuals
from remaining for further evaluation,” as required by federal
law. (42 C.F.R. § 489.24(d)(4)(iv) (2024).) “It is also telling that
in expanding the pricing disclosure obligations of hospitals
under the Affordable Care Act, federal regulators took care to
ensure that these new obligations do not interfere with the
emergency treatment obligations under the EMTALA. . . . [T]he
new pricing disclosure requirements are focused on ‘shoppable’
medical services, that is, services that can be scheduled in
advance and, by definition, are not emergency medical services.”
(Gray, supra, 70 Cal.App.5th at p. 241; see Saini, supra, 80
Cal.App.5th at pp. 1062–1063.)
Capito claims that neither the Legislature nor federal
authorities actually engaged in any “carefully considered
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‘balancing’ ” of competing interests. As to section 1339.585, she
argues that the Legislature exempted emergency rooms from
mandatory cost disclosures for uninsured patients “not because
the Legislature wished to conceal pricing information from
emergency care patients” but because it is “simply not feasible”
to provide “a reasonable estimate of the costs of diagnosis and
treatment for an unknown medical condition.” By contrast,
Capito contends that hospitals could disclose EMS fees through
a “simple, prominent sign placed in [the] emergency room.”
Quoting Gray, the Court of Appeal observed that “ ‘[a]s
originally introduced,’ ” section 1339.585 “ ‘required hospitals to
provide an estimate of charges upon the request of any
patient — including those receiving care in the emergency
department. [Citation.] As the bill moved through the
legislative process, it was amended first to apply only to non-
emergency patients [citation] and then amended again to apply
only to uninsured persons.’ ” Capito disputes this account of the
legislative history, claiming that section 1339.585 never applied
to emergency room patients because, as originally drafted, it
applied only “ ‘[u]pon admission of a patient’ ” and emergency
room patients are typically “outpatient” and not “admitted.” In
response, Regional points to a legislative finding that uses the
phrase “admitted to an emergency room.” (§ 1596.846, subd.
(a)(4).) But whether or not emergency room patients are
“admitted,” the fact is that the Legislature ultimately amended
section 1339.585 to explicitly exempt emergency rooms. (Stats.
2005, ch. 532, § 3.) The possibility that the Legislature may
have exempted emergency rooms from section 1339.585 since its
inception does not disprove that the Legislature engaged in a
balancing of competing interests. If anything, it suggests that
the Legislature has always intended for patients to access
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emergency care without being deterred by cost. This point is
reinforced by section 1339.585’s express reference to section
1317, which says that “the provision of emergency services
[cannot] be . . . affected by . . . economic status [or] ability to
pay.” (§ 1317, subd. (b).)
Capito’s claim that federal authorities did not engage in a
balancing of competing interests is also unpersuasive. “[W]hen
concern was raised that the new federal disclosure requirements
might interfere with a hospital’s obligations under the
EMTALA — including providing emergency treatment to any
person who seeks it and providing such treatment before any
discussion about ability to pay” — federal regulators clarified
that “ ‘[t]he price transparency provisions . . . do not require
that hospitals post any signage or make any statement at the
emergency department regarding the cost of emergency care or
any hospital policies regarding prepayment of fees or payment
of co-pays and deductibles.’ ” (Gray, supra, 70 Cal.App.5th at
p. 241, quoting 84 Fed.Reg. 65536 (Nov. 27, 2019).) In sum,
state and federal lawmakers have considered and declined to
impose the additional duty Capito urges here.
At a minimum, it is plausible that a duty to provide such
disclosures would risk discouraging patients from seeking
emergency care or would put patients in the position of
evaluating for themselves whether emergency services, at a
particular cost, are warranted in a given circumstance. Capito’s
emphasis on patient choice presumes that emergency room
patients “can accurately diagnose whether their ailment is
‘relatively minor’ and whether they can safely transport
themselves or be transported to a lower acuity facility.” (Gray,
supra, 70 Cal.App.5th at p. 242.) It also contemplates that
patients will weigh cost against the necessity or value of
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CAPITO v. SAN JOSE HEALTHCARE SYSTEM, LP
Opinion of the Court by Liu, J.
emergency care, which the regulatory scheme seeks to
discourage. (See § 1317, subd. (b); 42 U.S.C. § 1395dd(h);
42 C.F.R. § 489.24(a) (2024).)
Even if we were to focus on price transparency to the
exclusion of competing considerations, we are doubtful that a
posting of five possible EMS fees — which run from $672 to
$5635 depending on the severity of the patient’s condition —
would provide reliable notice of actual costs. First, it is
questionable whether such a broad range would inform patient
choice when hospitals do not know which level will be charged
prior to treatment. Second, the EMS fee is only one of many
charges an emergency room patient may incur. Capito’s total
charges amounted to $41,016, the bulk of which — $33,456 —
were not EMS fees. Third, the patient’s ultimate burden may
depend on the availability of insurance or discounts. After
adjustments and discounts, Capito’s final bill was reduced to
$8,855.38. As amici curiae hospital operators note, “disclosure
of a hospital’s standard charges for EMS Fees would be
misleading because virtually no patients are required to pay the
full amount of the EMS Fee.”
We therefore hold that where a hospital has complied with
state and federal disclosure requirements, including listing
EMS fees in the chargemaster and informing emergency room
patients of the availability of the chargemaster, the lack of
further disclosure of EMS fees to such patients in the emergency
room before treatment is not “unfair” under the UCL. Capito
has not sufficiently alleged that Regional’s conduct is “unfair”
for violating established public policy or for being immoral,
unethical, oppressive, or unscrupulous. She acknowledges that
Regional complied with the relevant statutory and regulatory
obligations. She does not allege that the chargemaster did not
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CAPITO v. SAN JOSE HEALTHCARE SYSTEM, LP
Opinion of the Court by Liu, J.
list the EMS fees or that she otherwise had no way to access
information about them. Nor does she allege that she inquired
about costs, including the EMS fee, or that Regional denied her
the information or the opportunity to inquire about it. To the
contrary, she admits she was given the chance to ask about her
financial obligations at registration. In sum, we conclude that
Capito has not demonstrated unfairness under the UCL based
on the allegations in her complaint.
Finally, Capito claims that the Court of Appeal’s holding
improperly provided hospitals a safe harbor from UCL liability.
(See Naranjo, supra, 90 Cal.App.5th at pp. 1216–1218.) We
have said that to create a safe harbor from UCL liability,
legislation “must actually ‘bar’ the action or clearly permit the
conduct.” (Cel-Tech, supra, 20 Cal.4th at p. 183.) Thus, “acts
may, if otherwise unfair, be challenged under the unfair
competition law even if the Legislature failed to proscribe them
in some other provision.” (Ibid.) But whether or not the
statutory scheme here creates a safe harbor, we find the scheme
relevant to discerning whether Regional’s conduct “offends an
established public policy” or is “immoral, unethical, oppressive,
unscrupulous, or substantially injurious to consumers” (id. at
p. 184) — that is, whether Regional’s conduct is “unfair” under
the UCL, applying the standard stated by Capito. Because we
hold that it is not, we have no need to decide whether the
statutes governing hospital price disclosure create a safe harbor
within the meaning of Cel-Tech.
B.
Capito claims that Regional violated the CLRA because it
has “exclusive knowledge” of the material fact that an EMS fee
would be charged to her, and that she had no way of knowing
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CAPITO v. SAN JOSE HEALTHCARE SYSTEM, LP
Opinion of the Court by Liu, J.
about that fact. This violation, Capito argues, forms the basis
for an “unlawful” UCL claim. As noted, “[b]y proscribing ‘any
unlawful’ business practice, ‘section 17200 “borrows” violations
of other laws and treats them as unlawful practices’ that the
unfair competition law makes independently actionable.” (Cel-
Tech, supra, 20 Cal.4th at p. 180.)
The CLRA aims “to protect consumers against unfair and
deceptive business practices and to provide efficient and
economical procedures to secure such protection.” (Civ. Code,
§ 1760.) It specifically “set[s] forth a list of unlawful ‘methods of
competition and unfair or deceptive acts or practices’ (id.,
§ 1770).” (McGill v. Citibank, N.A. (2017) 2 Cal.5th 945, 954.)
Capito alleges that Regional’s nondisclosure of EMS fees
amounts to an omission or concealment that “[r]epresent[s] that
goods or services have . . . characteristics, ingredients, uses,
benefits, or quantities that they do not have” (Civ. Code, § 1770,
subd. (a)(5)) and “[r]epresent[s] that a transaction confers or
involves rights, remedies, or obligations that it does not have or
involve, or that are prohibited by law” (id., subd. (a)(14)).
The parties dispute whether a failure to disclose is
actionable under the CLRA. (Compare Naranjo, supra, 90
Cal.App.5th at pp. 1209, 1215–1216 [recognizing that failure to
disclose material facts can form the basis of CLRA liability and
collecting cases] with Torres, supra, 77 Cal.App.5th at p. 509
with id. at p. 515 (conc. opn. of Poochigan, Acting P. J.)
[“omission-based liability under the CLRA” is an “extra-
statutory expansion”].) Capito relies on Naranjo’s assertion
that there is a duty to disclose “when the defendant has
exclusive knowledge of material facts not known or reasonably
accessible to the plaintiff” or “when the defendant actively
conceals a material fact.” (Naranjo, at pp. 1209–1210.)
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CAPITO v. SAN JOSE HEALTHCARE SYSTEM, LP
Opinion of the Court by Liu, J.
Regional argues that the CLRA does not apply because Capito
never alleged that the services she received were misdescribed
or that the COA contained misrepresentations.
Assuming that a failure to disclose can trigger CLRA
liability (an issue we do not decide), we conclude that Capito’s
allegations do not establish that Regional’s conduct was
unlawful. Regional disclosed the EMS fees in the chargemaster
and in its list of 25 common procedures. It submitted both
pricelists to HCAI, which published them on its website.
Regional labeled and briefly described the fees using
standardized billing codes and guidelines set by state and
federal regulators and widely used across the industry. (See
HCAI Guide, supra; HCAI Reporting Template, supra; see also
72 Fed.Reg. 66790 (Nov. 27, 2007) [designated CPT codes reflect
“the activities of physicians and do not necessarily fully describe
the range and mix of services” rendered in the provision of
emergency care]; CMS EMS Guide, supra, at pp. 13–24
[providing examples of qualifying services]; 80 Fed.Reg. 70448
(Nov. 13, 2015) [“[s]ince April 7, 2000” federal regulators
“instructed hospitals to report” EMS fees using the designated
CPT codes]; § 1339.56 [adopting federal diagnostic groupings in
pricelist requirements].) Additionally, Regional expressly
referenced the chargemaster in the COA that Capito signed, and
Regional provided her with the opportunity to inquire about
potential costs during registration. Regional also made its
chargemaster available, either electronically or physically, at
the emergency room and had the requisite “conspicuous” signs
saying so. (§ 1339.51, subd. (c); see also id., subd. (a).)
Capito claims that the chargemaster, which lists “tens of
thousands of individual billable items” and uses abbreviated
descriptors, essentially hides the EMS fee and provides no
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CAPITO v. SAN JOSE HEALTHCARE SYSTEM, LP
Opinion of the Court by Liu, J.
notice that it would be charged. But Regional’s chargemaster
lists each EMS fee as a line item with the prescribed CPT code,
standard charge, and the texts “LVL” and “EMER DEPT.” (See,
e.g., HCAI Guide, supra, at p. 1; HCAI Reporting Template,
supra; Gray, supra, 70 Cal.App.5th at p. 235.) This alone
suffices to demonstrate that, contrary to Capito’s claims,
Regional neither had “exclusive knowledge” of the fact that an
EMS fee would be charged nor “actively conceal[ed]” that fact.
(Naranjo, supra, 90 Cal.App.5th at pp. 1209–1210.)
It is notable that Regional also provides notice of EMS fees
through its list of 25 most common procedures, filed with and
published by HCAI. That list is much shorter and begins at the
very top with the heading “Evaluation & Management Services
(CPT Codes 99201–99499),” followed by several lines with the
words “Emergency Room Visit” and corresponding “average
charge[s]” based on the severity of the patient’s condition. These
descriptors exceed HCAI’s guidelines and are almost identical to
what Capito says would be adequate. For example, Regional
lists the $3,780 EMS fee charged to Capito with the standard
CPT code 99284 and the text “Emergency Room Visit, Level 4
(high severity without signi[f]icant threat).” (Compare HCAI
Reporting Template, supra [“Emergency Room Visit (moderate
level) 99284”].) Capito demands signage that says
“EMERGENCY DEPARTMENT VISIT FEES [¶] . . . [¶] Level 4
(CPT code 99284: severe) $3,780.00.” Capito’s complaint does
not indicate how the published descriptors, which closely
resemble her own proposed signage, are deficient in informing
her of Regional’s intent to charge the EMS fee.
Capito insists that the EMS fee line items do not inform
“an objectively reasonable person” of the “ ‘circumstances in
which the EMS Fee is charged.’ ” To be sure, the average patient
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CAPITO v. SAN JOSE HEALTHCARE SYSTEM, LP
Opinion of the Court by Liu, J.
would not know of the term “evaluation and management
services.” But that does not mean Regional had exclusive
knowledge of the fact that it charges a fee for the evaluation and
management of emergency room patients. A reasonable person
would likely know that getting evaluated in a hospital
emergency room is not free. In the emergency room context,
medical professionals “must make instantaneous decisions,
often without the benefit of” an established relationship,
“medical histories, consultation, or time for reflection.” (James
v. St. Elizabeth Community Hospital (1994) 30 Cal.App.4th 73,
81.) A reasonable person would infer that evaluation services —
for example, a physician’s preliminary examination of the
patient or review of medical history (CMS EMS Guide, supra, at
pp. 12–13) — incur some cost.
For largely the same reasons that Capito’s allegations do
not establish that Regional had “exclusive knowledge” of the fact
that she would be charged an EMS fee, they also do not establish
that this fact was not “reasonably accessible” to her. (Naranjo,
supra, 90 Cal.App.5th at pp. 1209–1210.) Capito alleges that “at
least during part of the Class Period,” such as on July 20, 2020
(a year after her emergency visits), the link to the chargemaster
on Regional’s website was “dead.” Even if true, there is no
dispute that Regional complied with its obligations by either
posting the chargemaster on its website or having an electronic
or physical copy in the emergency room. (§ 1339.51, subd. (a).)
And there is no allegation that the chargemaster was not filed
with HCAI or that it was unavailable on HCAI’s website.
Further, by signing the COA form, Capito acknowledged she had
“been given the opportunity to read and ask questions about the
[COA], specifically including but not limited to the financial
obligation’s provisions.” (Boldface omitted.) Because there were
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CAPITO v. SAN JOSE HEALTHCARE SYSTEM, LP
Opinion of the Court by Liu, J.
various ways to access the information, and because Capito does
not allege she was unable to gain access even if Regional’s
website was dead during part of the class period, her claim that
Regional “did not make its Chargemaster . . . reasonably
available to emergency room patients” is not adequately
supported by specific allegations.
In sum, even if a failure to disclose can give rise to CLRA
liability in the manner described in Naranjo, Capito has not
alleged facts showing that Regional’s conduct was “unlawful” by
virtue of Regional having exclusive knowledge of the EMS fee or
Capito lacking reasonable access to the information. We hold
that Capito has not sufficiently alleged a violation of the CLRA
and thus her UCL “unlawful” claim fails.
C.
Finally, Capito says Regional’s nondisclosure of EMS fees
is a “fraudulent” or “deceptive” business practice under the
UCL. “The fraudulent business practice prong of the UCL has
been understood to be distinct from common law fraud.” (In re
Tobacco II Cases (2009) 46 Cal.4th 298, 312.) “Historically, the
term ‘fraudulent,’ as used in the UCL, has required only a
showing that members of the public are likely to be deceived.”
(Daugherty v. American Honda Motor Co., Inc. (2006) 144
Cal.App.4th 824, 838; see Moran, supra, 3 Cal.App.5th at
p. 185.) This court has not defined the standard for deception
by omission or failure to disclose under the UCL’s fraudulent
prong, and we express no view here. It suffices to say that
Regional’s conduct, for the reasons above, is unlikely to deceive
the public. Its compliance with the regulatory scheme promotes
price transparency for consumers to the extent contemplated by
state and federal authorities, who sought to balance that
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CAPITO v. SAN JOSE HEALTHCARE SYSTEM, LP
Opinion of the Court by Liu, J.
concern against the risk of dissuading patients from seeking
emergency care.
At bottom, Capito desires notification of the EMS fee as if
emergency care were a shoppable service. She does not believe
Regional’s notices about its intent to charge the EMS fee —
provided in legally mandated pricelists and in a similar fashion
that Capito apparently finds suitable for other services —
adequately promotes price transparency and informed decision-
making. But Regional need not provide “ ‘the best possible
notice’ ” to avoid liability under the UCL. (Nolte v. Cedars-Sinai
Medical Center (2015) 236 Cal.App.4th 1401, 1409.) This is
especially so when state and federal lawmakers, who are “better
situated than we are to tackle the ‘[s]ignificant policy judgments
affecting social policies and commercial relationships’
implicated in this case” (Sheen v. Wells Fargo Bank, N.A. (2022)
12 Cal.5th 905, 948), have already made a reasoned
determination of what constitutes sufficient notice in the
emergency room context in light of competing concerns. We see
no basis to conclude that the public will likely be deceived by the
form and extent of Regional’s disclosures in accordance with
relevant state and federal regulations.
CONCLUSION
We affirm the Court of Appeal’s judgment and hold that
hospitals do not have a duty under the UCL or CLRA, beyond
what is required by the statutory and regulatory scheme, to
disclose emergency room EMS fees. We also dismiss as moot
Capito’s appeal from the trial court’s order striking her class
allegations. We disapprove Torres, supra, 77 Cal.App.5th 500
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CAPITO v. SAN JOSE HEALTHCARE SYSTEM, LP
Opinion of the Court by Liu, J.
and Naranjo, supra, 90 Cal.App.5th 1193 to the extent they are
inconsistent with this opinion.
LIU, J.
We Concur:
GUERRERO, C. J.
CORRIGAN, J.
KRUGER, J.
GROBAN, J.
JENKINS, J.
EVANS, J.
25
See next page for addresses and telephone numbers for counsel who
argued in Supreme Court.
Name of Opinion Capito v. San Jose Healthcare System, LP
__________________________________________________________
Procedural Posture (see XX below)
Original Appeal
Original Proceeding
Review Granted (published)
Review Granted (unpublished) XX NP opn. filed 4/6/23 – 6th Dist.
Rehearing Granted
__________________________________________________________
Opinion No. S280018
Date Filed: December 23, 2024
__________________________________________________________
Court: Superior
County: Santa Clara
Judge: Sunil R. Kulkarni
__________________________________________________________
Counsel:
Law Offices of Barry L. Kramer, Barry L. Kramer; Carpenter Law and
Gretchen Carpenter for Plaintiff and Appellant.
Rob Bonta, Attorney General, Nicklas A. Akers, Assistant Attorney
General, Michele Van Gelderen and Hunter Landerholm, Deputy
Attorneys General, for the California Attorney General as Amicus
Curie on behalf of Plaintiff and Appellant.
King & Spalding, Glenn Solomon, Paul R. Johnson, Amanda L. Hayes-
Kibreab, Ariana E. Fuller and Zuzana Ikels for Defendant and
Respondent.
Norton Rose Fulbright US, Jeffrey B. Margulies, Robin D. Ball and
Jacqueline C. Karama for Doctors Medical Center of Modesto, Inc., as
Amicus Curiae on behalf of Defendant and Respondent.
Manatt, Phelps & Phillips, Barry S. Landsberg, Harvey L. Rochman
and Joanna S. McCallum for Dignity Health, Sharp HealthCare and
Providence St. Joseph Health as Amici Curiae on behalf of Defendant
and Respondent.
Counsel who argued in Supreme Court (not intended for
publication with opinion):
Gretchen Carpenter
Carpenter Law
1230 Rosecrans Avenue, Suite 300
Manhattan Beach, CA 90266
(424) 456-3183
Paul R. Johnson
King & Spalding LLP
633 West 5th Street, Suite 1600
Los Angeles, CA 90071
(213) 443-4370