Collection Professionals v. Schlosser

ILLINOIS OFFICIAL REPORTS
Appellate Court
Collection Professionals, Inc. v. Schlosser, 2012 IL App (3d) 110519
Appellate Court COLLECTION PROFESSIONALS, INC., Plaintiff-Appellee, v.
Caption MORGAN SCHLOSSER, Defendant-Appellant.
District & No. Third District
Docket No. 3-11-0519
Filed September 28, 2012
Held In an action to collect for the medical services provided to defendant
(Note: This syllabus during her pregnancy and the birth of one of her children while she was
constitutes no part of uninsured and not receiving public benefits for medical services, the trial
the opinion of the court court did not err in preventing defendant from introducing evidence that
but has been prepared the providers involved routinely accepted less than the billed amount for
by the Reporter of purposes of showing that the billed amount was not the providers’
Decisions for the customary charges.
convenience of the
reader.)
Decision Under Appeal from the Circuit Court of La Salle County, No. 10-SC-2171; the
Review Hon. Daniel J. Bute, Judge, presiding.
Judgment Affirmed.
Counsel on John Grivetti, of Wenona, for appellant.
Appeal
Robert B. Steele and Natasha G. Steele, both of Aplington, Kaufman,
McClintock, Steele & Barry, of La Salle, for appellee.
Panel JUSTICE WRIGHT delivered the judgment of the court, with opinion.
Justices Holdridge and O’Brien concurred in the judgment and opinion.
OPINION
¶1 Defendant received medical treatment, services, and lab work from Illinois Valley
Community Hospital and Health Clinics, St. Margaret’s Hospital and Community Health
Clinics, and Hospital Radiology Service at a time when defendant was both uninsured and
not receiving any public benefits regarding medical services. Plaintiff, a collection agency,
filed a complaint on November 9, 2010, as assignee, asking the trial court to enter a judgment
against defendant for the full amount of the medical bills totaling $8,906.16, plus attorney
fees of $250 and court costs.
¶2 During the bench trial, plaintiff presented undisputed evidence that defendant received
medical services billed in the amount totaling $8,906.16 during 2007 and 2008 for
pregnancy-related treatments. It was also undisputed that, when defendant requested these
medical services, she was unemployed and signed paperwork indicating she was uninsured
and would be responsible for the payment of the medical treatment she was about to receive.
¶3 Defendant’s attorney attempted to cross-examine plaintiff’s witness regarding whether
the medical provider accepted less than the entire billed amount to satisfy the bills from other
patients. The court sustained plaintiff’s objection to this line of inquiry.
¶4 At the close of the evidence, the trial court found that plaintiff complied with the
requirements of the Fair Patient Billing Act (210 ILCS 88/1 et seq. (West 2010)) and proved
that the entire billed amount reflected the usual and customary amount for similar services
performed by other providers in the area. The court entered judgment for plaintiff in the
amount of $9,156.16 plus attorney fees of $250 and court costs. We affirm.
¶5 BACKGROUND
¶6 Plaintiff-appellee Collection Professionals, Inc. (plaintiff), became the assignee of
defendant’s unpaid past-due accounts for medical services provided to defendant by Illinois
Valley Community Hospital and Health Clinics (IVCH), St. Margaret’s Hospital and
Community Health Clinics (St. Margaret’s), and Hospital Radiology Service for pregnancy-
related medical services she received in 2007 and 2008. At the time defendant received these
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medical services related to her pregnancy, she was uninsured, unemployed, and not receiving
any type of public assistance. At the time she requested services, she agreed in writing to be
personally responsible for the payment for those services.
¶7 On November 9, 2010, plaintiff filed a small claims complaint alleging defendant owed
$453 to Hospital Radiology Services, $2,356 to St. Margaret’s, and $6,097.16 to IVCH for
medical treatment and services provided to defendant. The complaint asked for judgment to
be entered for that amount plus attorney fees in the amount of $250, for a total amount of
$9,156.16. Defendant requested a bench trial, which occurred on June 27, 2011.
¶8 During trial, plaintiff called Janette Kneebone, the patient accounts director for St.
Margaret’s, who presented defendant’s signed written agreement to pay for services before
defendant received medical treatment, lab and radiology tests, and services from St.
Margaret’s health care providers in October, November, and December of 2007, and
February and April of 2008. This included treatment provided at St. Margaret’s clinics, for
follow-up OB/GYN treatment and lab tests for defendant. Kneebone testified the total
amount billed for medical services defendant received at St. Margaret’s included only the
usual and customary charges that were consistent with the amount charged by other medical
providers in the area for the very same health services. To assure their charges were
reasonable and customary charges, Kneebone said St. Margaret’s periodically reviewed
charges from other medical providers in the area for the same health services, as well as
purchasing explanation of benefits information from insurance companies regarding amounts
they paid for medical treatment services, fee schedules, and Medicare fee schedules.
Kneebone stated St. Margaret’s billed all patients the same amount for the respective health
care services provided regardless of the source of payment.
¶9 During cross-examination, defense counsel asked Kneebone whether these customary
medical charges were “in any way reflective [of] what is normally received” for the same
services and whether they “receive the same amount from either a patient or a third party for
all services.” Plaintiff’s counsel objected to this line of questioning on cross-examination.
In response, defense counsel argued the court should consider whether St. Margaret’s
accepted less than the billed amount to settle other patient’s accounts as a factor to ascertain
the reasonable and customary charges for health care services. The court sustained plaintiffs’
attorney’s objection.
¶ 10 Defendant’s attorney asked Kneebone whether she prepared a written document for her
records stating that she “reasonably met the condition of 210 Illinois Compiled Statutes
88/30?” Kneebone answered, “I don’t know what that statute is.” Then, defendant’s attorney
clarified that he was referring to the section of the Fair Patient Billing Act which provided
that legal action may not be initiated against a patient for nonpayment of a hospital bill
without “written approval of an authorized hospital employee who reasonably believes
conditions for pursuing collection action have been met.” Defendant’s counsel asked if there
was any written document in the file stating that the hospital had complied with that statute.
After a recess, defendant’s attorney restated the question, asking Kneebone whether she or
any other St. Margaret’s employee had “certified” in writing that they had complied with the
Fair Patient Billing Act (210 ILCS 88/30(c) (West 2010)) prior to the filing of the current
collections lawsuit. Plaintiff’s attorney objected, but the court allowed the witness to testify
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that she had not prepared a written certification that she complied with the Act. Kneebone
thereafter, based on the attorney’s questioning, described the procedure used to encourage
patients to pay any outstanding bills, as follows:
“Originally, the patient would have gotten a statement that said they needed to call
us within thirty days to set up a payment plan or to pay in full. She [defendant] received
statements and she also received letters. We also sent more than one charity application
out to the patient. We didn’t get a return call.”
¶ 11 Kneebone stated that, on November 16, 2008, she sent a letter to defendant offering her
to pay a reasonable payment plan of $300 per month, along with a charity application in the
event defendant could not afford the monthly payments. Defendant returned the completed
charity application, but failed to include the requested income information. Defendant did
not make any payments toward the bill, failed to respond to a second letter from Kneebone,
and did not provide income verification for the charity application, such as pay stubs, tax
returns, bank statements, or social security or other benefits documentation.
¶ 12 Kneebone said the only time defendant contacted her by telephone was on October 22,
2009, when defendant reported she either was eligible for, or currently receiving, public aid
and public aid would pay the bill. However, Ms. Kneebone stated a patient only has a year
to provide this information and this phone call was more than a year after the treatment.
¶ 13 The parties stipulated that the testimony of the account director at IVCH would be
substantially the same as that of Ms. Kneebone and the outstanding amount of unpaid bills
for medical treatment and services rendered to defendant at that hospital was $6,097.16, plus
an unpaid radiology bill for an ultrasound totaling $453.
¶ 14 Next, defendant testified that she had an appointment with Dr. Whatcott1, an “O/B”
doctor, on February 19, 2008, for an ultrasound. While at that appointment, defendant stated
that she told the secretary she had no income to pay for the treatment and the secretary gave
her some paperwork to fill out and told her the costs for her medical treatment for her
pregnancy would be covered by the state. Defendant stated that she submitted a charity
application to both hospitals but did not submit financial information to either health care
provider because she was unemployed and did not have any pay stubs. Eventually, defendant
became employed at the “Horizon House,” at $10.13 per hour for 32 hours per week.
Defendant testified it was her understanding that the state would pay the bills for her medical
treatment for her pregnancy in the instant case. Defendant said she also subsequently became
pregnant a second time and all of those bills were paid by the state.
¶ 15 At the close of the evidence, the court found, first, that the medical providers complied
with the Fair Patient Billing Act and, then, entered judgment for plaintiff in the total amount
of $9,156.16, which included $250 for attorney fees, plus court costs. Defendant filed a
timely notice of appeal.
1
The records show this doctor was affiliated with St. Margaret’s clinics.
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¶ 16 ANALYSIS
¶ 17 On appeal, defendant claims that the court erred by barring defendant’s questions about
whether the medical provider regularly accepted less than the billed amount to settle
outstanding accounts of other patients who received the same services provided to defendant.
Defendant asserts this line of inquiry was relevant to the issue of whether the undisputed bills
reflected the reasonable and customary charges for the medical services provided. Defendant
also argues the medical providers did not comply with the Fair Patient Billing Act.
¶ 18 It is well established in situations where there is an express or implied contract for one
party to supply services to another, with no provision as to the specific amount the supplier
is to be compensated, the law implies that there is an agreement to pay a reasonable price for
the goods and services. Victory Memorial Hospital v. Rice, 143 Ill. App. 3d 621, 623 (1986);
Protestant Hospital Builders Club v. Goedde, 98 Ill. App. 3d 1028, 1031 (1981). To recover
under this type of contract, the hospital must not merely submit billings for services
provided, but must prove that the charges are reasonable. Victory Memorial, 143 Ill. App. 3d
at 624-25.
¶ 19 The cases cited by both parties explain that a hospital must establish that its charges are
reasonable in that they are the usual and customary charges of that particular hospital and are
comparable to the billed charges of other area hospitals. See Sherman Hospital v. Wingren,
169 Ill. App. 3d 161, 164 (1988); Victory Memorial, 143 Ill. App. 3d at 625. In this case, it
is undisputed the billed amounts at issue reflected the usual and customary amount charged
or billed to patients by other medical providers in the area for the same health services.
¶ 20 Illinois courts have held that the assessment of the reasonableness of the charges for the
medical services provided is strictly a question of fact and a provider seeking recovery for
services rendered must prove only that its charges are reasonable by showing they are
customary and usual as compared to other area hospitals. Sisters of the Third Order of St.
Francis v. Summerson, 217 Ill. App. 3d 377, 380 (1991) (citing Sherman Hospital v.
Wingren, 169 Ill. App. 3d 161 (1988)); see also Majid v. Stubblefield, 226 Ill. App. 3d 637,
642 (1992). In Majid, this court extended the holdings in the Victory Memorial Hospital
case, which dealt solely with hospital bills, to cases involving doctors’ fees for medical
services rendered at clinics. Majid, 226 Ill. App. 3d at 642.
¶ 21 The issue raised in this appeal is whether the trial court erroneously prevented defendant
from attempting to present evidence to the trial court to prove plaintiff routinely accepted less
than the entire billed amount to show the billed amount in this case did not reflect this
provider’s customary charges. It is well established that the admission of evidence is within
the sound discretion of the trial court and a reviewing court will not reverse the trial court
unless that discretion was clearly abused. Gill v. Foster, 157 Ill. 2d 304, 312-13 (1993).
¶ 22 After carefully researching this narrow issue to determine if the court abused its
discretion by restricting cross-examination, we conclude there is no case law directly on
point. However, our decision in Nickon v. City of Princeton, 376 Ill. App. 3d 1095 (2007),
provides helpful guidance even though the circumstances in that case are not completely
analogous to the case at bar.
¶ 23 In Nickon, plaintiff introduced evidence in the form of the medical bills to establish the
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amount of actual damages in a personal injury action. Id. at 1097-98. The defense sought to
introduce evidence demonstrating the medical provider, in that case, accepted a significantly
reduced amount from a collateral source to satisfy plaintiff’s account. Id. at 1098.
Specifically, although the plaintiff in that case received a bill for $119,723.11, the medical
provider accepted Medicare’s discounted payment of $34,888.61 in full for satisfaction for
all medical charges originally billed at a much higher rate. Id. In that case, the defense
asserted the discounted payment, rather than the amount billed, should be considered by the
trier of fact when evaluating the reasonableness of the original medical charges. Id. at 1102.
When upholding the trial court’s decision to bar the evidence of a discounted payment, we
held the “initially billed” or full amount was the appropriate measure of the charges to be
considered by the jury, regardless of the amount “ ‘ultimately paid.’ ” Id. at 1100.
Recognizing the instant case does not involve the collateral source rule, a similar result is
required here.
¶ 24 In this case, we conclude it is not relevant whether the collateral sources of other patients
ultimately paid less than the initially billed amount based on a contractual agreement
between the medical provider and the third party. Here, it is undisputed a third party or
collateral source did not come forward to pay any portion of defendant’s medical charges.
In addition, defendant specifically agreed to pay for the medical sources before she received
services from these medical providers. Finally, it is undisputed that all patients are billed the
same amount for these services, which was comparable to the fees charged by other medical
providers in the area for the same services. This evidence satisfied plaintiff’s burden of proof
to demonstrate the reasonableness of the charges reflected in plaintiff’s initial bill.
¶ 25 When determining whether the billed amount reflected only usual and customary charges
in this case, it was not relevant whether the medical provider seeking full payment from this
patient may have accepted discounted payments from a collateral source toward another
patient’s bill, based on a contract between that collateral source and the medical provider.
However, in this case, if defendant demonstrated the medical provider accepted a payment
from the same collateral source toward this defendant’s bill for similar medical services, that
information could have been relevant.
¶ 26 Next, defendant contends that since Kneebone admitted, during her testimony before the
court, that she was unaware of the statute and not certain whether she complied with “210
Illinois Compiled Statutes 88/30,” a portion of the Fair Patient Billing Act, plaintiff did not
establish compliance with the statutory requirements which must precede legal action
initiated by the medical provider to secure payment for services. Additionally, defendant
submits that, since plaintiff did not introduce copies of the correspondence Kneebone
allegedly sent to defendant, plaintiff did not prove compliance with the Fair Patient Billing
Act.
¶ 27 The Fair Patient Billing Act provides steps to follow to pursue a collection or legal action
against an uninsured patient. 210 ILCS 88/1 et seq. (West 2010). Specifically, a hospital must
allow the patient the opportunity to assess the accuracy of the bill, apply for financial
assistance, and offer a reasonable payment plan. 210 ILCS 88/30(a), (b) (West 2010).
¶ 28 In the instant case, the trial court specifically found that the medical providers complied
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with the Fair Patient Billing Act. On review, this court may only set aside a trial court’s
findings of fact where it is shown that those findings are contrary to the manifest weight of
the evidence. Greene v. City of Chicago, 73 Ill. 2d 100, 110 (1978).
¶ 29 In this case, the record shows Kneebone sent several letters to defendant along with the
bills; attempted to contact defendant by telephone; and suggested a payment plan of $300 per
month toward the bill. Defendant admitted to receiving some of these letters and returned a
completed charity application included with one of the letters. In addition, when defendant
returned an incomplete charity application, Kneebone sent defendant another letter, to the
same address, explaining the nature of the additional information required. Defendant also
told the court she did not respond to letters and phone messages because she thought the state
would pay. Although defendant contacted Kneebone by telephone once, more than one year
after her treatment, it was too late to submit the additional information for processing.
¶ 30 Here, the trial court was in a superior position to judge the credibility of the witnesses.
See Greene, 73 Ill. 2d at 110. The absence of a copy documenting the letter dispatched to
defendant is inconsequential because defendant admitted receiving the letter, which included
a suggested $300-per-month payment plan, and returned a completed charity form Kneebone
included with that communication. Defendant also testified that she received some of the
billings for the medical services and sometimes she received forwarded mail, and sometimes
she did not receive her mail. With regard to whether Kneebone testified truthfully about
dispatching the charity application denial letter, before beginning the formal collection
process, the court obviously found her testimony truthful. Based on the record, we conclude
the court’s finding in this regard is not against the manifest weight of the evidence.
¶ 31 CONCLUSION
¶ 32 For the foregoing reasons, we affirm the judgment of the circuit court of La Salle County.
¶ 33 Affirmed.
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