Business Law
Capito v. San Jose Healthcare System, LP (Dec. 23, 2024, S280018) ___ Cal.5th ___, 2024 WL 5196670
Hospitals have no duty to disclose to patients emergency room fees other than those specified by statute.
Taylor Capito filed a class action lawsuit against Regional Medical Center San Jose (Regional) after receiving emergency room services. She alleged that Regional violated the Unfair Competition Law (UCL) and the Consumer Legal Remedies Act by failing to give her sufficient notice of an Evaluation and Management Services (EMS) fee that it charged. The trial court sustained Regional’s demurrer without leave to amend. Capito appealed the judgment of dismissal. The Court of Appeal affirmed, and then the California Supreme Court granted review.
The Supreme Court also affirmed, holding that 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.” The court reasoned that imposing such a duty would upset “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” and thwart the “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.” Moreover, requiring hospitals to disclose the wide range of EMS fees that could potentially apply depending on the severity of the patient’s condition probably would not “provide reliable notice of actual costs” and “would be misleading because virtually no patients are required to pay the full amount of the EMS Fee.” Finally, provided that hospitals comply with statutory disclosure requirements, their failure to provide potential fee range information to ER patients “is unlikely to deceive the public.”
The Court approved the decisions in Gray v. Dignity Health (2021) 70 Cal.App.5th 225, Saini v. Sutter Health (2022) 80 Cal.App.5th 105, and Moran v. Prime Healthcare Management, Inc. (2023) 94 Cal.App.5th 166, and disapproved the decisions in Torres v. Adventist Health System/West (2022) 77 Cal.App.5th 500 and Naranjo v. Doctors Medical Center of Modesto, Inc. (2023) 90 Cal.App.5th 1193.
The bulletin describing this appellate decision was originally prepared for the California Society for Healthcare Attorneys (CSHA) by H. Thomas Watson, Peder K. Batalden, and Lacey Estudillo at the appellate firm Horvitz & Levy LLP, and is republished with permission.