On March 14, 2016, the Indiana Court of Appeals decided the case of Parkview Hospital v. Frost. (Parkview seems to make a lot of case law on the subject of hospital liens.) The question was the proper amount of the hospital lien against the proceeds of an injured party’s personal injury suit. Parkview asserted a lien based on the sticker prices for medical services found in its chargemaster. Frost wanted evidence from Parkview about what it accepted as payment in full for similar procedures from people covered by private insurance or government programs. Parkview declined to provide that information and asked the court to determine that its chargemaster rates were owed as a matter of law. The trial court declined to make that finding. Two members of the Court of Appeals panel agreed and said that Frost should be able to discover information about what other patients paid and introduce that to challenge the lien amounts.
Judge Najam, however, said that — while he agreed this would be a reasonable decision in a vacuum — it ignored the Supreme Court’s ruling in Allen v. Clarian Health Partners. The Supreme Court in that case had overruled an opinion written by Judge Najam. Judge Najam argues that Allen stands for the proposition that patients signing an agreement to pay for medical services are, in fact, agreeing to pay the chargemaster rates regardless of whether those rates are reasonable, rational, or known to the patient. He feels bound by Allen but disagrees with it and urges the Supreme Court to revisit its holding:
Thus, in its operation and effect, Allen places health care consumers, including emergency room patients, at a permanent, take-it-or-leave-it disadvantage. Allen immunizes a hospital’s unilateral pricing scheme from an evaluation or comparison by individual consumers or the marketplace at the front-end and then leaves those same consumers without recourse from a trier of fact at the back-end. Given that there is no price transparency, to insinuate chargemaster rates into an agreement “to pay the account” cannot possibly represent a meeting of the minds between the contracting parties. Chargemaster rates are not per se reasonable when they are, first, confidential and, second, incomprehensible. In sum, there is no discernable or reliable correlation between chargemaster rates and the reasonable value of the health care services provided.
(As is probably evident from my prior blog posts linked above), I tend to agree with Judge Najam. We need more consistency on standards of proof and whether a reasonableness standard applies where there is no prior meeting of the minds as to health care charges. At the moment, there seems to be a lot of variability based on who is paying and not so much based on what services were provided and the reasonable costs/prices of those services.