Court rules in favor of Mercy Hospitals East Communities over lien on patient's tort claim

By Tomas Kassahun | Jan 4, 2019

ST. LOUIS – The U.S. District Court Eastern District of Missouri, Eastern Division has granted Mercy Hospitals East Communities’ motion for reconsideration in a lawsuit against a patient who was treated at the hospital.

Judge Audrey G. Fleissig granted the motion and a motion for summary judgment in full Dec. 28, stating that it had the right to assert a lien.

According to the court, plaintiff Cynthia Hoops was treated at a Mercy hospital in Missouri after being injured in an accident on May 31, 2016, resulting in medical treatment charges totaling $6,519.54. 

The court said Hoop’s husband signed a contract with Mercy on behalf of his wife. The contract, according to the court, provided that plaintiff consented to the services performed at Mercy and that plaintiff agreed to pay for goods and services provided at the rates disclosed by Mercy “unless she was entitled to pay a different amount under her health insurance plan.”

"On June 8, 2016, Mercy billed Hoops’ automobile insurance policy with State Farm for the total amount of $6,519.54," the court said.

"On July 7, 2016, Mercy’s billing agent Medical Reimbursements of America Inc. placed a lien for $6,519.54 on the tort claim that Hoops asserted against the other driver involved in the automobile accident," according to the court.

The court said Hoops filed a lawsuit, claiming that Mercy’s assertion of the lien for the full amount of Mercy’s charges breached the hold harmless provision of the network agreement. 

According to the opinion, Hoops also claimed that Mercy breached the consent and agreement provision because "she was entitled to pay a lesser amount - limited to the $209 cost share - under her health insurance plan by virtue of the hold harmless provision."  

“In its earlier summary judgment briefing, Mercy argued that plaintiff’s contract claims related to the hospital lien failed because plaintiff suffered no actual damages,” the opinion stated. 

"Mercy also argued that the lien was properly asserted because Missouri’s hospital lien statute permits the assertion of a lien by a hospital as long as a patient’s debt on the hospital bill remains outstanding," the district court said.

The district court agreed with Mercy, saying the hold harmless provision only protects covered individuals and Hoops "didn’t become a covered individual until CareFirst determined that the plaintiff was eligible for coverage for her treatment at Mercy under the health insurance plan."

“Because Mercy undisputedly asserted the lien before CareFirst made its coverage determination— and at a time when plaintiff may have been liable for the full amount of Mercy’s charges— and released the lien before CareFirst made its determination, Mercy did not breach the network agreement’s hold harmless provision or, by extension, the consent and agreement,” the opinion stated.

The court concluded that neither the network agreement nor the consent and agreement precluded Mercy from “asserting a lien at the time and in the manner it did here.”

“Accordingly, the court will reconsider the memorandum and order and will grant Mercy’s motion for summary judgment on all counts,” the opinion stated. “At the hearing plaintiff conceded that her motion for class certification would also fail if the court granted Mercy’s motion for reconsideration.”   

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