California Supreme Court Rules That Advance Notice of Hospital Emergency Care Fees is Unnecessary

The Supreme Court of California has dismissed a lawsuit that argued hospitals are in violation of state laws for not disclosing certain costs related to emergency care prior to treatment, affirming that these institutions are not obliged to reveal such fees.

Capito contended that this constituted an “unlawful, unfair or fraudulent business” practice under California’s Unfair Competition Law (UCL) and violated the state’s Consumers Legal Remedies Act (CLRA).

The trial court and the appeals court both dismissed her claims, which then led to the case being reviewed by the Supreme Court of California.

On December 23, the Supreme Court issued an opinion dismissing Capito’s claims and agreeing with the previous courts.

“Hospitals do not have a duty under the UCL or CLRA, beyond their obligations under the relevant statutory and regulatory framework, to disclose EMS fees prior to treating patients in emergency rooms,” it stated.

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“The California Legislature, the United States Congress, and multiple regulatory bodies have already determined which pricing information should be accessible in a hospital’s emergency room. Equally important, they have established what is not required to be disclosed.”

The court indicated that the avoidance of mandating the disclosure of certain fees aims to prevent patients from being discouraged by seeing prices and potentially opting out of crucial care.

Mandating hospitals to display EMS costs could prompt patients to weigh the expenses against the urgency of their medical needs. Requiring such price disclosures assumes that patients in emergency situations can accurately assess “whether their ailment is relatively minor.”

In her lawsuit, Capito did not claim that Regional Medical Center failed to meet existing disclosure requirements. Additionally, she did not suggest that she was charged for services that were not rendered or that the fees were excessive.

“Neither the UCL nor CLRA mandates further disclosure of EMS fees beyond what is stipulated by the regulatory framework,” stated the court opinion.

Challenges for Hospitals

The California Hospital Association (CHA) has opposed the initiative to inform patients about fees for emergency care.

Allowing such a requirement would place “an unreasonable duty” onto hospitals, the association argued.

“Hospitals cannot ascertain the costs of patient care in advance of treatment, particularly in emergencies. The necessary treatment for a patient is contingent upon the severity of their condition, which cannot be determined beforehand by either the patient or the hospital,” the association stated.

Moreover, a patient’s financial obligation for treatment costs is influenced by their insurance status and coverage. Even if a patient has insurance, the hospital cannot predict if, or how much, the insurer will cover for the services ultimately provided to the patient.

Meanwhile, Senator Gary Peters (D-Mich.) is examining the effects of private equity ownership on emergency care services provided to hospital patients.

On April 1, he issued letters to private equity firms and physician staffing companies requesting information about patient care and related matters.

This outreach followed a series of interviews his office conducted with over 40 emergency medicine physicians nationwide.

“I am concerned that the largest emergency medicine staffing companies in our nation may be implementing cost-saving strategies that compromise patient safety and care, which could jeopardize our national emergency preparedness,” Peters stated. “I am seeking transparency from these companies and their private equity owners.”