The opinion
Hefner v. Mission Hosp., Inc., 2014 NCBC 64.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
COUNTY OF BUNCOMBE 12 CVS 3088
STEPHEN HEFNER, on behalf of )
himself and all others similarly )
situated, )
)
Plaintiff, )
)
v. )
)
MISSION HOSPITAL, INC., a North ) ORDER DENYING PLAINTIFF’S
Carolina Corporation; and MISSION ) MOTION FOR CLASS CERTIFICATION
HEALTH SYSTEM, INC., a North )
Carolina Corporation, collectively )
doing business as MISSION )
HEALTH; and DOES 1 through 25, )
inclusive, )
)
Defendants. )
)
{1} THIS MATTER is before the Court on Plaintiff’s Motion for Class
Certification (“Motion”), made pursuant to Rule 23 of the North Carolina Rules of
Civil Procedure (“Rules”).
Higgins Benjamin PLLC by John F. Bloss and Barry L. Kramer Law Offices
by Barry L. Kramer (pro hac vice) for Plaintiff.
Robinson Bradshaw & Hinson, P.A. by Robert W. Fuller and Heyward H.
Bouknight, III for Defendants.
Gale, Chief Judge.
I. INTRODUCTION
{2} Plaintiff Stephen Hefner (“Hefner” or “Plaintiff”) asks the Court to
certify a class, defined more specifically below, but generally consisting of patients
at Defendant Mission Hospital, Inc. (“Mission”)1 who received emergency treatment,
who were billed based on Mission’s standard “Chargemaster” rates, and who were
“self-pay.” After considering the developed record, reviewing briefs and authorities
cited, and hearing oral argument, the Court concludes that Plaintiff has failed to
demonstrate the actual existence of a class because individualized issues
predominate over those common issues of law and fact upon which Plaintiff seeks to
support class certification. Accordingly, as more fully explained below, the Motion
is DENIED.
II. PROCEDURAL BACKGROUND
{3} Plaintiff filed his Class Action Complaint on June 28, 2012. The case
was designated a complex business case on August 7, 2012, assigned to the Hon.
Calvin H. Murphy on August 8, 2012, and reassigned to the undersigned on July 2,
2014.
{4} Defendants’ August 8, 2012, motion to dismiss was denied by Judge
Murphy’s April 18, 2013, Order.
{5} The parties undertook discovery relevant to class action matters,
including the opportunity to designate and depose expert witnesses.
{6} After this discovery, Plaintiff filed his Motion for Class Certification on
December 16, 2013. Defendants filed their opposition on February 17, 2014.
Plaintiff replied on March 10, 2014.
{7} Defendants further filed their Motion to Strike Plaintiff’s Motion for
Class Certification (“Motion to Strike”) on February 17, 2014, asserting that
Plaintiff sought to modify the definition of the putative class in briefing. Although
the Motion to Strike was fully briefed, it is effectively mooted by the Court’s ruling
on Plaintiff’s Motion for Class Certification.
1 Although Defendants include Mission Health System, Inc. as a whole, the parties have consented to
restricting the proposed class to only patients who received emergency care medical treatment at
Mission Hospital, Inc.
{8} Prior to oral argument, the Court accepted supplemental informal
filings addressing various points and case authorities.
{9} The Motion is ripe for disposition.
III. RELEVANT FACTS
{10} Class certification is governed by Rule 23. Rule 23 does not, by its
express terms, specify that findings of fact must be made, but the appellate courts
recognize that “findings of fact are required . . . when rendering a judgment
granting or denying class certification in order for the appellate courts to afford
meaningful review under the abuse of discretion standard.” Nobles v. First
Carolina Commc’ns, Inc., 108 N.C. App. 127, 133, 423 S.E.2d 312, 316 (1992). The
standard that the trial court employs depends on whether the challenge is to a
plaintiff’s initial pleading of a class or to a plaintiff’s ability to prove the existence of
a class after discovery. A plaintiff must be given the benefit of certain
presumptions at the pleadings stage, but when the Court considers whether a class
exists based on a developed record, the plaintiff bears the evidentiary burden of
satisfying the Court that the putative class exists. Crow v. Citicorp Acceptance Co.,
319 N.C. 274, 281–82, 354 S.E.2d 459, 464–65 (1987). The trial court is granted
substantial discretion in making that determination. See Harrison v. Wal-Mart
Stores, Inc., 170 N.C. App. 545, 547, 613 S.E.2d 322, 325 (2005) (citing Faulkenbury
v. Teachers’ & State Emps.’ Ret. Sys. of N.C., 345 N.C. 683, 699, 483 S.E.2d 422,
432 (1997)).
{11} While the standard has not been as squarely stated in North Carolina
appellate opinions, the Court believes that the correct evidentiary requirement is a
preponderance of the evidence standard, as was expressly stated by the Third
Circuit Court of Appeals, which the Court believes to be consistent with North
Carolina precedent. See Marcus v. BMW of N. Am., LLC, 687 F.3d 583, 591 (3rd
Cir. 2012).2 Even assuming that a plaintiff initially meets this burden, the trial
2 Although not binding on North Carolina courts, extensive federal court interpretation of Rule 23 of
the Federal Rules of Civil Procedure has been deemed instructive to North Carolina courts’
court has a further reservoir of discretion to determine whether using the class
action procedure is the superior method to adjudicate the controversy. See Crow,
219 N.C. at 284, 354 S.E.2d at 366.
{12} The fact finding for a class certification determination is limited to
whether prerequisites to certification have been met. The Court does not resolve
factual disputes necessary to deciding the ultimate merits of claims and defenses at
this stage. Beroth Oil Co. v. N.C. Dept. of Transp., ___ N.C. ___, ___, 757 S.E.2d
466, 474 (2014) (citing Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 178 (1974)).
But, in determining the existence of a class by addressing the predominance of
either common or individualized issues, the Court must assess the legal and factual
issues raised by both claims and defenses. See id. at ___, 757 S.E.2d at 474 n.5.
{13} In this case, the Court does not believe that it is required to resolve
substantial contested facts to determine class certification, because the developed
record demonstrates that the majority, if not all, of the essential facts on which
class certification turns are uncontested. The significant conflict is, rather, in
regard to how those facts frame the issues to be tried and whether resolution of
those issues is predominated by common questions or individualized questions. The
parties clearly have divergent views as to the appropriate weighting of facts or
issues common to all class members and how they are to be compared to those that
must be separately resolved as to individual class members.
{14} In determining whether a class exists, the Court is guided by the
following facts:
A. The Parties
{15} Plaintiff Stephen Hefner is a resident of Shelby, North Carolina,
currently employed by Engineered Control Solutions in Raleigh, North Carolina. At
the relevant time, Hefner worked as a salesperson in Asheville, North Carolina.
interpretation of the North Carolina rule. See Ehrenhaus v. Baker, 216 N.C. App. 59, 69–70, 717
S.E.2d 9, 17 (2011).
{16} Defendant Mission Hospital, Inc. is a not-for-profit, full-service
hospital located in Asheville, North Carolina.
B. Plaintiff’s Visit to Mission Hospital
{17} On November 11, 2011, Hefner presented at Mission’s emergency room
complaining of tingling and numbness on the left side of his body.
{18} Hefner had a high-deductible health insurance plan with Blue Cross
Blue Shield of North Carolina (“BCBSNC”), providing coverage only for charges in
excess of an annual $5,000 deductible.
{19} The parties disagree whether Hefner presented his insurance card
before receiving treatment. It is apparent that Mission did not keep a copy of it and
did not fully realize his coverage until discovery. Mission initially billed Hefner as
if he had been uninsured.
{20} Hefner signed Mission’s Consent and Authorization Form, which
governs responsibility for costs incurred. The form states, in relevant part:
6. FINANCIAL RESPONSIBILITY. For all services and/or supplies not
covered or deemed not medically necessary by my health plan, I agree
to accept financial responsibility and to pay Mission Hospitals directly.
Full payment is due within thirty (30) days of billing or as otherwise
arranged by mutual consent of both parties.
7. FINANCIAL AGREEMENT. I agree that in consideration of the
services to be rendered, I am obligated to pay the account owed by me
to Mission Hospitals in accordance with the regular rates and terms of
Mission Hospitals.
(Defs.’ Memo. Supp. Mot. Dismiss Ex. A ¶¶ 6–7.)
{21} Hefner underwent several diagnostic procedures and was then
discharged. Mission billed Hefner a total of $4,217.08. Mission later offered Hefner
a twenty percent “prompt payment” discount, which would have reduced his bill to
$3,373.66. Hefner did not accept the discount. He testified that he was unable to
pay the discounted amount. He has made partial payments of $175. The remaining
balance of $4,042.08 was unpaid when Hefner filed his Complaint.
{22} Hefner complains that Mission undertook aggressive collection efforts
until he filed his Complaint.
{23} When Mission realized during discovery that Hefner was covered by
BCBSNC, it recalculated the bill in accordance with rates charged to BCBSNC
insureds. Mission applies these rates to services or treatments within an insured’s
deductible, so long as the underlying treatment is covered by the insurance
contract. The recalculated charge was $3,231.97.
C. Mission Hospital’s Billing Practices
{24} The “regular rates” referred to in Mission’s Consent and Authorization
form are those compiled on a spreadsheet referred to as the “Chargemaster.” The
Chargemaster contains over 35,000 entries, reflecting pricing for all treatments
within the hospital. All Mission billing is on Chargemaster rates, but final charges
submitted to a patient or his insurer may reflect various discounts and reductions.
Those reductions may be discounts negotiated with insurance carriers, which vary
from carrier to carrier, or other discounts, such as charity care discounts or prompt
payment discounts for self-pay or uninsured patients. Pursuant to federal law, final
charges billed through Medicaid are computed differently.
{25} Mission indicates that the Chargemaster rates are calculated “gross”
prices that reflect the costs required to provide these services, after taking into
consideration bad debt and discounting, together with a markup that tends to
decrease as the cost for the service or product increases. Mission guards the
confidentiality of its Chargemaster. Patients are not advised in advance as to the
charge for any treatment or service.
{26} Negotiation rates may vary significantly from carrier to carrier.
Discounts to the Chargemaster rates for any patient may also vary by the type of
service, the length of the patient’s stay, and a myriad of other variables.
{27} Uninsured or self-pay patients are initially billed at the full
Chargemaster rates. However, they may be eligible for discounts.
{28} Mission employs six financial counselors to assist patients in paying
for their treatment. Mission offers at least two types of discounts to patients: a
“prompt payment” discount and a “charity care” discount. The amount of a prompt
payment discount is a discretionary discount offered by Mission financial counselors
based on information provided by the patient, and may vary from patient to patient.
The financial advisor may offer a discount, or alternatively offer special payment
terms such as an extended repayment period. The charity care discount is
calculated using a sliding scale based on the federal poverty guidelines. This
discount potentially reduces a patient’s payment obligation to zero. All patients are
able to apply for the charity care discount through a Mission patient registration
representative or financial counselor.
{29} Mission also assists patients in qualifying for Medicaid. It is not
unusual that a patient will receive treatment at a time the patient has applied for
but has not yet been deemed eligible for Medicaid. Payment for charges billed may
be held in abeyance as efforts to qualify for Medicaid continue, with billing adjusted
upon qualification.
{30} From 2008 to 2012, 98,674 uninsured patients were treated and
released from Mission’s Emergency Department.
D. The Putative Class
{31} The Complaint requests that the Court certify a class defined as
follows: “All individuals (or their guardians or representatives) who have (a)
received emergency care medical treatment at Mission Hospital or another Mission
Health hospital and (b) were self-pay patients with respect to the emergency
services and/or supplies provided.” (Class Action Compl. ¶ 36.)
{32} Following discovery, in his Motion for Class Certification, Plaintiff
asks that the Court certify a class defined as
consisting of all individuals (a) who received emergency care medical
treatment at Mission Hospital, (b) who were billed at the hospital’s full
Chargemaster Rates for such treatment, (c) on whose behalf no part of
the cost for such treatment was paid by private insurers or
governmental entities, and (d) who received no discounts, adjustments,
and/or writeoffs which totaled in excess of 50% of the Chargemaster
Rates for such treatment.
(Br. Supp. Pl.’s Mot. Class Cert. 1–2 (footnotes omitted).)
{33} If the Court were to certify such a class, it would need to fix the date on
which class membership should to be determined, because some patients may fit the
definition on some days but not on others, such as, for example, those whose
financial circumstances change or who are later deemed eligible for Medicaid. As
the Court does not certify a class in this Order, it does not further consider how
such a date should be determined.
IV. ANALYSIS
A. Standards for Class Certification
{34} Rule 23 provides a basic framework for class certification, but the
North Carolina courts, often drawing on more-developed federal precedent, have
elaborated on prerequisites a court must find to certify a class. These include
(1) the existence of a class, (2) that the named representative will fairly
and adequately represent the interests of all class members, (3) that
there is no conflict of interest between the representative and class
members, (4) that class members outside the jurisdiction will be
adequately represented, (5) that the named party has a genuine
personal interest in the outcome of the litigation, (6) that class
members are so numerous that it is impractical to bring them all
before the court, [and] (7) that adequate notice of the class action is
given to class members.
Perry v. Union Camp Corp., 100 N.C. App. 168, 170, 394 S.E.2d 681, 682
(1990) (citing N.C. R. Civ. P. 23; Crow, 319 N.C. at 282, 354 S.E.2d at 465).
{35} Here, the success of the Motion turns the critical, initial
determination of whether Plaintiff has demonstrated the actual existence of a
class by a preponderance of the evidence. Finding that Plaintiff has not so
demonstrated a class, the Court need not further address Mission’s
arguments that Plaintiff has not met the additional prerequisites for class
certification.
{36} “Under Rule 23, a class exists ‘when the named and unnamed
members each have an interest in either the same issue of law or of fact, and that
issue predominates over issues affecting only individual class members.’” Beroth
Oil Co., ___ N.C. at ___, 757 S.E.2d at 478 (quoting Faulkenbury, 345 N.C. at 697,
483 S.E.2d at 431). It is not adequate that a Plaintiff merely identify common
contentions that will arise. “That common contention . . . must be of such a nature
that it is capable of classwide resolution—which means that determination of its
truth or falsity will resolve an issue that is central to the validity of each one of the
claims in one stroke.” Wal-Mart Stores v. Dukes, 131 S. Ct. 2541, 2551 (2011).
While federal courts refer to the “commonality” and “predominance” factors keyed to
particular subsections of Federal Rule of Civil Procedure 23, the same factors under
North Carolina’s Rule 23 are captured within the definition of a class. See Beroth
Oil Co., ___ N.C. at ___, 757 S.E.2d at 478.
{37} In Beroth Oil Co. v. N.C. Department of Transportation the plaintiff
sought class certification for a group of more than 800 landowners challenging
aspects of the N.C. Department of Transportation’s taking of their property for the
purpose of building a beltway in Forsyth County. Id. at ___, 757 S.E.2d at 469–70.
In upholding the trial court’s denial of the plaintiff’s motion for class certification,
the North Carolina Supreme Court noted the importance of the uniqueness of each
putative class member’s circumstance to the court’s takings analysis, stating that
“plaintiffs have not shown that all 800 owners within the corridor are affected in the
same way and to the same extent.” Id. at ___, 757 S.E.2d at 474. The court further
reasoned that “‘liability can be established only after extensive examination of the
circumstances surrounding each of the affected properties.’ This discrete fact-
specific inquiry is required because each individual parcel [of land] is uniquely
affected by NCDOT’s actions.” Id. (quoting Beroth Oil Co. __ N.C. App. at __, 725
S.E.2d 651, 663 (2012)). Therefore, the common question―that each class member
experienced a taking―did not predominate over the individualized question of
whether the compensation paid for each taking complied with North Carolina
requirements. Accordingly, the plaintiff had failed to demonstrate the actual
existence of a class even though there were issues common to all putative class
members.
{38} In contrast, the North Carolina Supreme Court’s opinion in
Faulkenbury v. Teachers’ & State Employees’ Retirement System of N.C.
demonstrates that the mere existence of individualized questions will not defeat
certification when common issues necessary to determine liability predominate,
leaving ancillary issues of damages to be decided individually. 345 N.C. 683, 483
S.E.2d 422. Faulkenbury involved an allegation by public employees, based on
impairment of contract, that the State of North Carolina had violated their
constitutional rights by reducing the employees’ vested benefits under the Teachers’
and State Employees’ Retirement System, thus creating a putative class of all
public employees who were subject to the benefit reduction. Id. The North Carolina
Supreme Court affirmed the Court of Appeals’ decision to certify the class of state
employees, reasoning that the common question of liability, based on a contention
that retirement benefits were underpaid by unlawfully eliminating or changing
vested contracts, predominated over issues that affected only individual class
members, such as the actual amount of benefits that had been eliminated or
reduced. Id. at 699, 483 S.E.2d at 432. Because the determination of liability was
rooted in whether the state reduced the vested benefit, and not a subjective analysis
of the amount of the reduction, the Faulkenbury court held that issues of damages
were collateral to the overarching liability determination. See id. at 698, 483 S.E.2d
at 432.
B. The Respective Contentions
{39} The parties agree that Mission’s charges must be reasonable. Plaintiff
contends that Mission’s charges are excessive and unreasonable. Mission contends
that they are reasonable. Plaintiff contends that a common question of
reasonableness can be determined by a method which can be generalized to all
patients. Mission contends that the reasonableness of any charge must be based on
a patient-by-patient and charge-by-charge inquiry.
{40} Seeking to find precedential support for his argument, Plaintiff
contends that determining the reasonable value of Mission’s services is
comparable to measuring damages, and cites Faulkenbury for the proposition
that any individualized inquiry into charges on a per-patient basis is
collateral to common liability issues of whether Mission’s overall charges are
reasonable or whether self-pay patients are discriminated against by
Mission’s billing. (Reply Br. Supp. Class. Cert. 10 (citing Faulkenbury, 345
N.C. at 698, 483 S.E.2d at 423).) Plaintiff argues that determining whether
Mission’s Chargemaster rates are unreasonable may be resolved by
calculating damages within an acceptable overall range and using this
calculation to control liability. (Reply Br. Supp. Class. Cert. 10–11 (citing
Weyerhaeuser v. Godwin Bldg. Supply, 292 N.C. 557, 561, 234 S.E.2d 605,
607 (1977).) Plaintiff offers that courts have adopted various approaches to
determine such an acceptable range without the need to make patient-by-
patient inquiries, such as using blended averages for insurance and
Medicare/Medicaid reimbursement rates or determining an appropriate
average profit percentage to be applied to actual calculated costs for hospital
services. (Reply Br. Supp. Class. Cert. 10–11.) Plaintiff urges that insisting
on an individualized inquiry effectively means that Mission’s rates can never
be challenged, because no individualized claim is sufficiently large to justify
the expense of litigation. (Br. Supp. Pl.’s Mot. Class Cert. 15–16.)
{41} Based on this logic, Plaintiff defines the overarching common issue to
be decided as “Is Mission Hospital entitled to bill and enforce payment for the
emergency services it provides to self-pay patients at its artificially inflated
‘Chargemaster’ rates?” (Br. Supp. Pl.’s Mot. Class Cert. 4.) Plaintiff then argues
that this ultimate issue turns on the following common questions that can and
should be answered on a class-wide basis:
(1) Whether Defendants had a policy and practice of billing class
members substantially more than it was [sic] reimbursed by other
patients for the same emergency care treatment and services;
(2) Whether the “regular rates and terms” in Mission Hospital’s
Contract can be construed to refer to its Chargemaster rates, where
(a) the Contracts do not reference the Chargemaster rates; (b) the
Chargemaster rates are not published or available on Mission’s
website, and (c) the vast majority of Mission’s patients and their
government or private insurers are not charged at, do not pay, and
are not expected to pay Chargemaster rates;
(3) Whether Defendants are limited, under express or implied contract
law, to charging uninsured patients no more than the reasonable
value of its [sic] emergency treatment and services where its [sic]
Contract form contains an open or indefinite pricing term;
(4) Whether Defendants have charged and continue[] to charge
Plaintiff and putative class members unreasonable and/or
unconscionable amounts for emergency medical care in breach of its
[sic] Contract and the covenant of good faith and fair dealing;
(5) Whether Defendants have been unjustly enriched by these
practices; and
(6) Whether the acts and conduct of Defendants render them liable to
Plaintiff and the Class for restitution, injunctive relief and/or
damages.
(Br. Supp. Pl.’s Mot. Class Cert. 15.)
{42} Mission contends that it is impossible to determine the reasonableness
of charges on an across-the-board basis. It argues that the above-listed questions
are not, in fact, common, but instead depend upon individualized inquiries. Mission
argues that Plaintiff’s invitation to simply apply an average or a blanket discount to
all charges should not be accepted, particularly, because Mission will present
individualized evidence to demonstrate the overall and individualized
reasonableness of its charges. (Defs.’ Mem. Opp’n. Class Cert. 17 (citing Blades v.
Monsanto Co., 400 F.3d 562 (8th Cir. 2005).) Mission suggests that, in order to
certify a class,
for each chargemaster code in each of hundreds of thousands of bills,
Mission would have to introduce evidence to show (i) the cost of the
service, (ii) the charges of other hospitals, for the same services, (iii)
the amount private insurers have agreed to pay, and the terms on
which they have agreed to make payment, [and] (iv) the appropriate
adjustments to be made given likely problems with collectability,
which would be uniquely relevant to uninsured patients.
(Defs.’ Mem. Opp’n. Class Cert. 17.) Further attacking the lack of commonality,
Mission argues that it would be impossible to determine details relevant to the
damages determination, such as which patients had already paid their bills, which
patients were currently eligible for larger discounts, and other individualized
issues. (Defs.’ Mem. Opp’n. Class Cert. 13.) Inquiry would have to extend into
various discounts for which uninsured or self-pay patients may be eligible.
C. Discussion
{43} The Court concludes that this case is much more comparable to Beroth
than Faulkenbury. After thoroughly considering the parties’ contrasting positions
in light of the developed record, the Court concludes, as did the court in Beroth, that
“Plaintiff[‘s] argument oversimplifies the issue of liability.” Beroth Oil Co., ___N.C.
at ___, 757 S.E.2d at 472. The Court rejects Plaintiff’s assertion that simply
“[b]ecause [Mission]’s behavior was uniform towards all class members, it
predominates over class members’ individual behavior.” (Br. Supp. Pl.’s Mot. Class
Cert. 18.) The fact that each Mission patient may sign the same Consent and
Authorization Form agreeing to assume responsibility for Mission’s regular charges
does not lead to the conclusion that liability can be determined on a class-wide basis
through calculating an average. The central issue that runs through each of
Plaintiff’s proposed questions is whether the rates charged to either uninsured or
self-pay patients were arbitrary, as opposed to a reasonable reflection of actual
costs, and whether they must be found to be unreasonable when comparing charges
of insured patients with those of self-pay or uninsured patients. Plaintiff seeks to
avoid an individualized inquiry in the Court’s liability determination by urging that
the Court need only develop some generalized measure of reasonableness based on
averages of overall charges, reimbursements, or profit margins. Having reviewed
Plaintiff’s argument and the authority upon which the argument relies,3 the Court
3See Nassau Anesthesia Assoc. P.C. v. Chin, 924 N.Y.S.2d 252 (N.Y. Dist. Ct. 2011); Gaasland Co. v.
Hyak Lumber & Millwork, Inc., 257 P.2d 784 (Wash. 1953). Not only do neither of these cases
involve class actions, Plaintiff’s argument conflates also the analysis of whether the charges were
rejects the notion that it would be appropriate or fair, either to Mission or to the
individual members of the class Plaintiff purports to represent, to reduce the
question of the reasonableness of individualized charges to some form of averaging.
Rather, the Court believes that there is not sufficient uniformity in Mission’s
application of charges and discounts, either to insured patients or those who are
uninsured or self-pay, to reduce liability to a question of averages.4
{44} Beroth makes it clear that a Plaintiff seeking class certification must
produce evidence that each putative class member was affected the same way and
at least to approximately the same extent by a defendant’s actions. If liability as to
the proposed class can only be established after an individualized investigation into
the circumstances of each class member, the class does not satisfy the commonality
prerequisite.
{45} Here, the developed record indicates that Plaintiff has not met the
predominance required by the Beroth test, but rather that individual issues of fact
predominate over common issues of law or fact. It is apparent that Mission’s
treatment of the patients did not affect each patient in the same way and to the
same extent, and that ultimately, the reasonableness of any particular charge,
either before or after discounting, must be examined individually.5 There is a
panoply of potential issues factoring into the ultimate question of reasonableness,
because every patient treated at Mission received different services and was billed
reasonable with the determination of damages, and thus does not obviate the Court’s required
analysis of whether common issues of law or fact predominate over individual issues.
4 Obviously, not every patient received an “average” bill. The Court is reminded of Garrison Keillor’s
mythical Lake Wobegon, where “all the children are above average.” While the Court has not and
need not undertake a further specific analysis, Plaintiff’s logic leads to a conclusion that some class
members may have been charged above and some below the “average” by which Plaintiff would seek
to define “reasonableness,” with the assumption that only those overcharged need receive
compensation. If the “average” here applies equally, the Court could reasonably conclude that some
class members were actually underbilled.
5 Plaintiff incorrectly relies on Faulkenbury for the proposition that differences in the amount of
recovery is a collateral issue to the question of liability. The Faulkenbury court allowed certification
of a class of individuals based on the common question of an alleged violation of a constitutional
right. Faulkenbury, 345 N.C. at 697–98, 483 S.E.2d at 431–32. It was for this reason the class was
certified, and was why issues related to individual recovery were only collateral to the liability
determination, not, as Plaintiff seems to argue, because individual issues of recovery are always
collateral to a liability determination.
for different amounts. With 98,674 uninsured patients billed based on a
Chargemaster containing more than 35,000 different rates, and variable approaches
to discounting based on individualized circumstances, the number of potential
combinations of charges is vast. Also, certain facts in the developed record suggest
that it may not always be the case that charges billed to an insured patient are less
than charges billed to an uninsured or self-pay patient who was afforded a discount,
belying, at least in some cases, Plaintiff’s assumption that Mission regularly and
systematically imposes unreasonable charges on uninsured or self-pay patients that
it would be unable to charge under the scrutiny of a carrier or other reimbursement
agent.
{46} Further, Plaintiff’s proposed class definition does not account for the
fact that there are significant variations among putative class members themselves
as to how they may have been billed, negotiated discounts, paid their bill, or
qualified for revised charges based on ultimate Medicaid eligibility.
{47} To conclude, the Court finds that there are substantial factual issues
individual to the proposed class members that would impact a liability
determination as to an individual patient, such that determination of liability on a
class-wide basis would be at least impractical, if not impossible. The same set of
charges could be reasonable to one patient and unreasonable to another. Thus,
liability to the class is only able to be established after extensive investigation into
the individual billing circumstances of each patient. The Court therefore finds that
common issues of law or fact do not predominate over individual issues of law and
fact, and thus the commonality prerequisite to whether a class exists has not been
met. For that reason, no class exists.
{48} The Court’s conclusion is consistent both with North Carolina
appellate precedents and prior holdings of this Court.6 While their decisions are not
6 See, e.g., Blitz v. Agean, 2012 NCBC LEXIS 21 (N.C. Super. Ct. April 11, 2012) (denying class
certification because individual questions regarding whether class members should properly be
included in the class predominated over common questions of fact or law) aff’d, __ N.C. App. __, 743
S.E.2d 247 (2013); Lee v. Coastal Agrobusiness, Inc., 2012 NCBC LEXIS 51 (N.C. Super. Ct. Sept.
27, 2012) (denying class certification due to plaintiff’s failure to prove the existence of a class because
binding on this Court, other courts’ determinations that similar changes to hospital
billing practices do not qualify for class certification are consistent and persuasive.
See Maldonado v. Ochsner Clinic Found., 493 F.3d 521, 525–26 (5th Cir. 2007);
Colomar v. Mercy Hosp., Inc., 242 F.R.D. 671, 676–77 (S.D. Fla. 2007); Eufaula
Hosp. Corp. v. Lawrence, 32 So.3d 30, 35–46 (Ala. 2009). At least two other similar
cases brought by Plaintiff’s counsel were not certified for the same reasons the
Court outlines here. See Hale v. Sharp Healthcare, 2013 WL 3871436, at *3–4 (Cal.
Super. Ct. 2013) (decertifying a class for failure to meet predominance
requirement); Terrazas v. Mem’l Health Servs., 2013 WL 3497701, at *3–4 (Cal.
Super. Ct. 2013) (applying a similar analysis to determine putative class’s failure to
meet superiority requirement).
V. CONCLUSION
{49} For the foregoing reasons, Plaintiff’s Motion for Class Certification is
DENIED. Because the Court’s determination would be the same regardless of
whether the Court used the definition originally proposed in Plaintiff’s Class Action
Complaint or the definition proposed in Plaintiff’s Brief in Support of Plaintiff’s
Motion for Class Certification, Defendant’s Motion to Strike Class Certification is
denied as MOOT.
This the 8th day of December, 2014.
individual issues predominated over common issues, requiring a significant factual inquiry by the
court).