Hospital’s failure to provide pretreatment disclosure of emergency medical evaluation fees beyond what is required by statute is not actionable.
Gene Moran received emergency care at a Prime Healthcare hospital and was charged an emergency room evaluation and management services (EMS) fee in addition to the charges for treatment provided. The fee was listed in the hospital’s published chargemaster, as required by state and federal statutes, but was not further disclosed at the time of treatment. Moran sued Prime, alleging that its failure to disclose the EMS fee violated the Unfair Competition Law (UCL) and the Consumer Legal Remedies Act (CLRA) because the fee was effectively hidden from patients who might otherwise seek cheaper treatments. Prime moved to strike, arguing that there was no duty to disclose the fees beyond the requirements of state and federal regulations. The trial court granted the motion and Moran appealed.
The Court of Appeal affirmed. The court observed that several recent opinions addressed UCL and CLRA claims regarding EMS fees, including Naranjo v. Doctors Medical Center of Modesto, Inc. (2023) 90 Cal.App.5th 1193, which the Supreme Court accepted for review on July 26, 2023. Most of these cases held either that hospitals had no duty to disclose beyond state and federal regulatory requirements, or that the plaintiff failed to adequately allege reliance under the CLRA. Naranjo was the only decision allowing the plaintiff’s claim to proceed on the merits. Naranjo held that the hospital’s exclusive knowledge of its EMS fee, which was not reasonably accessible to the patient, led to an actionable claim under the CLRA and UCL. But the Moran court declined to follow Naranjo, and instead followed the majority rule—disclosing chargemaster rates under applicable statutes and regulations forecloses a duty to make additional pretreatment disclosure of the EMS fee. The court explained that numerous state and federal rulemaking bodies have developed an extensive statutory and regulatory scheme to provide price transparency for medical services while avoiding price disclosure requirements that might dissuade patients from receiving urgently needed treatment due to cost. Accordingly, Moran’s claims were not actionable under the UCL. In addition, Moran failed to allege a viable CLRA cause of action because the hospital did not conceal its EMS fee (it was in the published chargemaster), and because Moran failed to adequately plead reliance (given the severity of his medical emergencies, there was no reasonable inference that disclosing the EMS fee would have caused him to seek treatment elsewhere).
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.