Jeffrey P. Gale, P.A. // Florida Personal Injury Cases and Hospital Price Gouging

dollarsPrice gouging for medical services is the scourge of personal injury cases. Hospitals are the worst offenders.

By ambulance from the accident scene to admissions for surgery, accident victims wind up in hospitals. The hospital charges are always staggering.

The charges are phony, having no relationship to either costs or value. Average pricing at Florida hospitals is a minimum of 500 percent of Medicare allowable amounts (which amounts to roughly three to four times more than hospitals negotiate as reasonable rates with commercial health insurers).

The gouging is especially problematic in personal injury cases for the uninsured and those with large deductibles or unpaid charges. Large outstanding balances can stand in the way of resolving cases involving low policy limits or of questionable value because of causation issues.

Compounding the problem is the difficulty of negotiating with hospitals. Strong local, state, and federal lien laws embolden hospitals to drive a hard bargain. Ignoring the lien is not a viable option for the lawyer, as doing so may result in personal liability and even criminal sanctions.

All is not lost.

Florida case law arms patients to fight back. In Mercy Hospital v. Carr, 297 So. 2d 598 (Fla. 3d DCA 1974), cert. denied, 307 So. 2d 448 (Fla. 1974), the court held that the hospital’s patient “may not be bound by the charges put in the contract as he is entitled to question the reasonableness thereof.” The referenced contract provided that the patient pay all charges in accordance with “existing standard and current rates as set forth in regular schedules which are available for inspection and review.”

Arguably, Carr was qualified by Payne v. Humana Hospital, 661 So. 2d 1239 (Fla. 1st DCA 1995). While the First DCA expressly adopted the holding in Carr, at 1241, it seemed to suggest that set and ascertainable prices in a contract may not be overridden to imply a reasonableness requirement. The court explained:

When a contract fails to fix a price furthermore, a reasonable price is implied. See F.L. Stitt & Co. v. Powell, 94 Fla. 550, 556, 114 So. 375, 378 (1927) (holding that, where a contract for legal services fails to expressly provide for the amount of the fee, a “reasonable” fee is implied); McGill v. Cockrell, 88 Fla. 54, 58, 101 So. 199, 201 (1924) (where a contract fixes no definite sum to be paid for services, “a reasonable sum is presumed by law to have been contemplated by the parties”).

This may be a distinction without practical consequence. Detailed written estimates are rarely given before services are provided. The sticker shock comes afterwards.

Some ways of determining reasonableness. 

  • In Giacalone v. Helen Ellis Memorial Hospital, 8 So. 3d 1233 (Fla. 1st DCA 2009), in a challenge to the hospital’s charges as being unreasonable and unconscionable, the patient was allowed to discover the hospital’s charges to various categories of patients, including self-pay patients, Medicare patients, Medicaid patients, and privately insured patients, as well as the hospital’s cost structure.
  • Florida Statute §641.513 limits payments from Florida HMOs for emergency services to the lesser of the (a) The provider’s charges or (b) the usual and customary provider charges for similar services in the community where the services were provided. In Baker County Medical Services v. Aetna Health, et al., 31 So. 3d 842 (Fla. 1st DCA 2010), the court interpreted the hospital’s contract language, “usual and customary provider charges,” as meaning the “fair market value” of the services rendered. The court described “fair market value” as “the price a willing buyer will pay and a willing seller with accept in an arm’s-length transaction.” Baker at 845.
  • Medicare Allowable. Examples: Transient Ischemia (Avg. hospital price: $30,912.00/Total Medicare Allowable: $4,724.00); Back and Neck Fusion ($51,584.65/$6,881.58); Laparoscopic Cholecystectomy ($70,545.43/$10,699.04)
  • PIP allowable charges.
  • Workers’ compensation reimbursement rates.

The defenses to excessive charges include.

  • Unconscionability (based on unreasonable pricing)
  • Lack of mutual assent
  • Fraudulent nondisclosure
  • Undue influence
  • Unfair or deceptive trade practices
  • Breach of contract (implied covenants of good faith and fair dealing)
  • Fraud in the inducement

A recent experience. Our client sustained a deep laceration when struck by a machete at work. He was taken by a co-worker to a Miami hospital, where he received emergency care and was admitted for two days. The bill was $48,329. Believing our client was uninsured — the employer failed to furnish the hospital with its workers’ compensation information and ultimately denied the claim — the hospital unilaterally reduced its bill to $7,249 as part of an “Uninsured Disco Discount.” When our client returned to the same hospital two months later for follow up care, his bill was $32,923. It was reduced to $4,938. We settled the workers’ compensation case at mediation. Without the discounts, the case would not have settled. Days before we were about to pay the hospital from the money withheld from the settlement, we received a phone call from a nice lady inquiring about the status of the case on behalf of the hospital. I told her that the case had settled and asked if she could negotiate further discounts. To my surprise and amazement, she said Yes and agreed to a 45% reduction. Hence, on charges totaling $81,252, the hospital accepted $6,702, which works out to 8%.

This was a minor miracle … I do not expect similar results in other cases. However, it demonstrates the crazy world of hospital billing. Lawyers and patients facing excessive charges should arm themselves with the knowledge to fight back. Hospitals know their charges are obscene. Only the most brazen of them are willing to take that fight to court. Push back. You might be surprised.

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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.

While prompt resolution of your legal matter is our goal, our approach is fundamentally different. Our clients are “people” and not “cases” or “files.” We take the time to build a relationship with our clients, realizing that only through meaningful interaction can we best serve their needs. In this manner, we have been able to best help those requiring legal representation.