Dennis Gibson, Individually and on Behalf of All Others Similarly Situated v. National Healthcare of Leesville, Inc., D/B/A Byrd Regional Hospital

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

CA 18-710

DENNIS GIBSON, INDIVIDUALLY AND ON
BEHALF OF ALL OTHERS SIMILARLY SITUATED

VERSUS

NATIONAL HEALTHCARE OF LEESVILLE,
INC., D/B/A BYRD REGIONAL HOSPITAL

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APPEAL FROM THE
THIRTIETH JUDICIAL DISTRICT COURT
PARISH OF VERNON, NO. 93,228
HONORABLE VERNON BRUCE CLARK, DISTRICT JUDGE

**********

BILLY HOWARD EZELL
JUDGE

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Court composed of Sylvia R. Cooks, Billy Howard Ezell, and Candyce G. Perret,
Judges.

AFFIRMED.

Scott R. Bickford
Lawrence J. Centola, III
Martzell, Bickford & Centola, PC
338 Lafayette St.
New Orleans, LA 70130
(504) 581-9065
COUNSEL FOR PLAINTIFF/APPELLEE:
Dennis Gibson

Edwin Dunahoe
Jared Dunahoe
The Dunahoe Law Firm
P. O. Box 607
Natchitoches, LA 71458-0607
(318) 352-1999
COUNSEL FOR PLAINTIFF/APPELLEE:
Dennis Gibson

Derrick G. Earles
Laborde Earles Law Firm
203 Energy Parkway, Building B
Lafayette, LA 71351
(337) 777-7777
COUNSEL FOR PLAINTIFF/APPELLEE:
Dennis Gibson

J. Lee Hoffoss, Jr.
Claude P. Devall
Donald W. McKnight
Hoffoss Devall, LLC
517 W. College Street
Lake Charles, LA 70605
(337) 433-2053
COUNSEL FOR PLAINTIFF/APPELLEE:
Dennis Gibson

David R. Kelly
Thomas R. Temple, Jr.
Chris D. Billings
Breazeale, Sachse & Wilson, L.L.P.
P. O. Box 3197
Baton Rouge, LA 70821-3197
(225) 387-4000
COUNSEL FOR DEFENDANT/APPELLANT:
National Healthcare of Leesville, Inc. D/B/A Byrd Regional Hospital

EZELL, Judge.

This case raises the issue of whether certification of a class action under

La.R.S. 22:1874, the Balance Billing Act, was proper. National Healthcare of

Leesville, Inc. D/B/A Byrd Regional Hospital (Byrd Regional) appeals the

decision of the trial court arguing that the trial court failed to conduct a rigorous

analysis of all the elements for class certification. For the following reasons, we

affirm the trial court’s decision.

FACTS

Dennis Gibson was injured in an accident on April 25, 2011, when a car ran

into the motorcycle he was driving. He was taken to Byrd Regional for treatment.

At the time of his admission, Mr. Gibson’s account was designated as Financial

Class “L” which stood for “liability” and meant he had been in a motor vehicle

accident. The intake sheet at Byrd Regional noted that Mr. Gibson worked for the

Louisiana Department of Agriculture and Forestry in DeRidder. Mr. Gibson was

covered by health insurance with the State of Louisiana, Office of Group Benefits.

That insurance was provided by Blue Cross and Blue Shield of Louisiana.

Linda Davis, director of patient financial services with Byrd Regional since

1996, testified at the hearing on class certification. She explained that prior to

2013, Byrd Regional was instructed to bill the motor vehicle insurance company as

primary. This policy was effective in 2005. After July 1, 2013, the health insurer

was billed as primary. Ms. Davis explained that Byrd Regional is a contracted

healthcare provider for various health insurance companies, including Blue Cross.

She stated that a Membership Provider Agreement spelled out the obligations

between Blue Cross and Byrd Regional, and Byrd Regional agreed to accept the

health insurance rate in accordance with the contract. This is known as the

contracted reimbursement rate, which is less than the charge master rate, or total

charge.

Michael Lynch, the lien unit department manager for Professional Account

Services Incorporated, (PASI), also testified at the hearing. He explained that

PASI handles claims for hospitals involving automobile accidents. PASI will run a

query on the hospital system looking for accounts that indicate there was a motor

vehicle accident, or Class “L” accounts. PASI will then begin working the case by

filing a lien against the at-fault insurer. This occurs before any attempt to collect

from the health insurer. “This practice of rejecting insurance and collecting or

attempting to collect full charges is referred to as ‘balance billing’ and is prohibited

by law.” Emigh v. West Calcasieu Cameron Hosp., 13-2985, p. 2 (La. 7/1/14), 145

So.3d 369, 371; La.R.S. 22:1874.

In Mr. Gibson’s case, the total charges were $5,292.55. A notice of hospital

lien was filed against Farm Bureau Insurance Company, the liability insurer of the

at-fault driver, on May 6, 2011. On December 2, 2011, Farm Bureau paid the

entire bill, which is more than Blue Cross would have paid pursuant to the

contracted reimbursement rate. Byrd Regional released the lien on December 14,

2011.

On July 25, 2016, Mr. Gibson, individually and on behalf of others similarly

situated, filed a class action suit for damages against Byrd Regional. Mr. Gibson

asserted statutory violations and breach of contract claims. Specifically, Mr.

Gibson alleged that Byrd Regional improperly refused to submit medical bills to

patient’s health insurers and attempted to collect payment from patients in

violation of Louisiana’s Balance Billing Act, La.R.S. 22:1871 to 22:1881, and in

violation of the Member Provider Agreement.

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After the hearing on September 28, 2017, the trial court certified this matter

as a class action. Reasons for ruling were issued on October 10, 2017, and

judgment was signed on October 27, 2017. The class was defined as (alterations in

original):

All persons currently and/or formerly residing in the State of
Louisiana during the period from May 1, 2005 to July 1, 2013:

(1) Having “Health Insurance Coverage’ [as defined by La. R.S.
22:1872(18)] providing coverage for themselves or for
others for whom they are legally responsible, with any
“Health Insurance Issuer” [as defined by La. R.S.
22:11872(19)] at the time “covered health care services” [as
defined by La. R.S. 22:1872(8)] were provided by any
company owned and/or operated by BYRD; and,

(2) With which “Health Insurance Issuer” and company owned
and/or operated by BYRD was a “contracted health care
provider” at the time of service [as defined by La. R.S.
22:1872(6)]; and,

(3) From whom BYRD and/or any company owned and/or
operated by BYRD collected, and/or attempted to collect,
the “Health Insurance Issuer’s Liability” [as defined by La.
R.S. 22:1872(20)], including, but not limited to, any
collection or attempt to collect from any settlement,
judgment or claim made against any third person or insurer
who may have been liable for any injuries sustained by the
patient which insurers include those providing liability
coverage to third person, uninsured/underinsured coverage,
and /or medical payments coverage); and/or,

(4) From whom BYRD and/or any company owned and/or
operated by BYRD, collected, and/or attempted to collect,
any amount in excess of the “Contracted Reimbursement
Rate” [as defined by La. R.S. 22:1872(7)], including but not
limited to, any collection or attempt to collect from any
settlement, judgment, or claim made against any third
person or any insurer which may have been liable for any
injuries sustained by the patient (which insurers include
those providing liability coverage to third person,
uninsured/underinsured coverage, and/or medical payments
coverage); and/or

(5) From whom BYRD and/or any company owned and/or
operated by BYRD collected, and/or attempted to collect,

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any amount without first receiving an explanation of
benefits or other information from the Health Insurance
Issuer setting forth the liability of the insured as required by
La. R.S. 22:1874(A)(2) and (3).

Byrd Regional filed a motion for new trial on November 9, 2017. A hearing

on the motion for new trial was held on March 1, 2018. The motion was denied,

and judgment was signed on March 26, 2018. Byrd Regional then filed the present

appeal claiming that Mr. Gibson did not meet his burden of proof under La.Code

Civ.P. art. 591 to certify the class and the trial court abused its discretion when it

granted Mr. Gibson’s motion to certify the class.

CLASS CERTIFICATION

In Baker v. PHC-Minden, L.P., 14-2243, p. 23 (La. 5/5/15), 167 So.3d 528,

544, the supreme court specifically held that “the class action is the superior

method for adjudicating the common issue regarding the legality, under the

Balance Billing Act, of a health care provider’s collection policy of filing medical

liens to recover its full rate for services from an insured’s settlement or judgment

with a third-party [tort feasor].” Louisiana Code Civil Procedure Article 591 sets

forth the requirements for class certification. Specifically, La.Code Civ.P. art.

591(A) provides for five prerequisites that a representative party or parties must

meet for class certification “often referred to as numerosity, commonality,

typicality, adequacy of representation, and objective definability of class[.]” Baker,

167 So.3d at 538. Furthermore, in a Balance Billing Act class certification case, a

party must also “prove common questions of law or fact predominate over

individual issues[.]” Id. at 539. On appeal, Byrd Regional claims that Mr. Gibson

was unable to meet his burden of proof with respect to the numerosity, adequacy,

and predominance elements.

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“The burden of establishing the statutory criteria have been satisfied falls on

the party seeking to maintain the class action.” Id. A trial court has wide

discretion in determining whether a class should be certified, and its factual

findings are subject to the manifest error standard of review. Id. “What is of

primary concern in the certification proceeding is simply whether the plaintiffs

have met the statutory requirements to become a class action, not the merits of the

underlying litigation.” Id. at 541(alteration in original). “[A] court’s focus on

review must be on the requirements and whether the evidence establishes the

procedural device is appropriate.” Id.

The supreme court in Baker has already determined that the class action is a

proper procedural device for a claim alleging violations of the Balance Billing Act

by healthcare providers. Therefore, we will review the trial court’s determinations

regarding the statutory requirements that Byrd Regional alleges Mr. Gibson failed

to establish under La.Code Civ.P. art 591 pursuant to the manifest error standard of

review.

Numerosity

Byrd Regional first claims that Mr. Gibson failed to submit any evidence as

to the likely number of potential claimants and improperly relied on an assumption

that the potential claimants are so numerous that joinder is impractical.

A court must look at the facts and circumstances of each individual case to

determine numerosity. Baker, 167 So.3d 528. “This requirement reflects the basic

function of the class action as a device for allowing a small number of persons to

protect or enforce rights or claims for the benefit of many where it would be

inequitable and impracticable to join every person sharing an interest in the rights

or claims at issue in the suit.” Id. at 542.

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There is no set number above which a class is automatically
considered so numerous as to make joinder impractical as a matter of
law. Likewise, the numerosity element may not be met by simply
alleging a large number of potential claimants exist. While the
determination of numerosity is in part based upon the number of
putative class members, it is also based upon considerations of
judicial economy in avoiding a multiplicity of lawsuits, financial
resources of class members, and the size of the individual claim.
Ultimately, to meet this requirement, the plaintiff must show joinder is
impractical, but, at the same time, there is a definable group of
aggrieved persons.

Id. (citations omitted).

Mr. Gibson introduced Exhibit 9 at the hearing, which was provided by Byrd

Regional. Ms. Davis explained that Exhibit 9 is a list generated by Byrd Regional

that lists over 600 patients who were treated after motor vehicular accidents and

were both “L” and Occurrence Code 01, indicating that another vehicle was

involved and that there may be a liability claim. The trial court found that there

may be as many as 600 patients based on this list. As noted by Byrd Regional, this

exhibit does list a few claims that are outside the period of time when the

classification policy was in place.

Byrd Regional claims that the list is not limited to accounts on which liens

were issued to patients with health insurance. It claims that the list includes all

self-pay accounts, patients insured under a fully-funded ERISA policy, uninsured

patients, and all patients covered under Medicare, Medicaid, or some other

government sponsored program. Byrd Regional argues that the class definition

does not include these patients and, as such, the list is broad and over-inclusive.

As a result, it claims that Mr. Gibson failed to establish that the class is so large

that joinder would be impractical.

Clearly, of these 600 patients, there are numerous patients who were treated

at Byrd Regional for motor vehicular accidents and liens were issued on the

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liability policy as primary when health insurance was involved. While Mr. Lynch

testified that there is nothing in PASI’s software that would allow it to identify

Class “L” accidents where only health insurance was involved, he agreed that it

would not necessarily be a problem for Byrd Regional. Even Byrd Regional’s own

Hospital Lien Policy regarding motor vehicle accidents with liability provided

what information should be noted at registration for a patient involved in a motor

vehicle accident. It required notation of whether a patient had Blue Cross

insurance, other auto/liability insurance, no insurance, did not know the specific

insurance, or no insurance.

Ms. Davis explained that Byrd Regional labeled all motor vehicle accidents

as Class “L” resulting in the liability insurance policy as primary over the health

insurance policy. She testified that from May 2005 to July 1, 2013, this policy had

been implemented at the hospital more than 100 times. So, we know more than

100 names on the list would qualify as members of this class.

Also, many of the amounts listed in Exhibit 9 are relatively small so

considerations of judicial economy come into play. As noted by the supreme court

in Baker, 167 So.3d at 542, “many claims may be small or nominal in nature,

rendering individual actions financially impractical, if not impossible.” We find no

manifest error in the trial court’s conclusion that the numerosity requirement was

met by Mr. Gibson.

Adequacy of Representation

Byrd Regional claims that Mr. Gibson is not capable of fairly and adequately

protecting the interests of the purported class. It claims that there are aspects of his

own claim that make his interests in direct conflict with those of the purported

class. Specifically, Byrd Regional argues Mr. Gibson has no general damages

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claim even though he is trying to pursue a general damages claim on behalf of the

class. Byrd Regional also claims that Mr. Gibson’s claim is subject to the defense

of prescription.

There are factors that are relevant to the inquiry of whether Mr. Gibson will

fairly and adequately protect the interests of the class:

(1) The representative must be able to demonstrate that
he or she suffered an actual-vis-à-vis hypothetical-injury;

(2) The representative should possess first hand
knowledge or experience of the conduct at issue in the
litigation;

(3) The representative’s stake in the litigation, that is, the
substantiality of his or her interest in winning the lawsuit,
should be significant enough, relative to that of other
class members, to ensure that representative’s
conscientious participation in the litigation; and

(4) The representative should not have interests seriously
antagonistic to or in direct conflict with those of other
class members, whether because the representative is
subject to unique defenses or additional claims against
him or her, or where the representative is seeking special
or additional relief.

Baker, 167 So.3d at 543-44 (quoting Kent A. Lambert, Certification of Class

Actions in Louisiana, 58 La.L.Rev. 1085, 1117 (1998)).

The Balance Billing Act is a consumer protection law designed to prohibit

health providers from “attempting to collect . . . or collect . . . an amount in excess

of the contracted reimbursement rate for covered health care services. La.R.S.

22:1874(A). The supreme court in Anderson v. Ochsner Health System, 13-2970

(La. 7/1/14), 172 So.3d 579, held that La.R.S. 22:1874(B) grants a private cause of

action to an insured to sue under the Balance Billing Act. Specifically, La.R.S.

22:1874(B) grants a prevailing party the right to “recover all costs incurred,

including reasonable attorney fees and court costs” when a health care provider

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maintains an action at law to collect an amount in excess of the contracted

reimbursement rate.

While Mr. Gibson did testify that he had no worry or concern related to Byrd

Regional’s handling of his medical claim, the Balance Billing Act allows recovery

of all costs incurred. There is no doubt that a medical lien was filed in Mr.

Gibson’s case and Farm Bureau, the liability insurer, paid the full amount sought.

Mr. Gibson received notice of the medical lien from Byrd Regional and

acknowledged that he never got the benefit of the discounted rate. He, like many

others, will have a claim aside from mental health damages. Mr. Gibson agreed

that at the time of his deposition, he was not very familiar with the Balance Billing

Act or a class action. However, he testified that he now has a better understanding

of the issues and process and is willing to serve as the class representative.

Byrd Regional also claims that Mr. Gibson is subject to the unique defense

of prescription citing Stewart v. Ruston Louisiana Hospital Co., L.L.C., 3:14-0083,

p. 5 (W.D. La. 2016)(unpublished opinion), in which the federal court held “that

the appropriate prescriptive period for a cause of action based on a violation of the

Balanced [sic] Billing Act is one year.” However, this court in Vallare v. Ville

Platte Medical Center, 16-863, 16-953 (La.App. 3 Cir. 2/22/17), 214 So.3d 45,

writs denied, 17-498, 17-513 (La. 5/12/17), 221 So.3d 73, specifically disagreed

with Stewart and found that the cause of action involved a contract or quasi-

contractual obligation and is not based on tort so that the proper prescriptive period

is ten years.

Byrd Regional also takes issue with Mr. Gibson’s failure to file suit against

Blue Cross. Citing Emigh, 145 So.3d 369, Byrd Regional argues that Mr. Gibson

has failed to pursue a claim against the health insurers for breach of contract. It

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claims that should any claim against it be dismissed, then the class could pursue

claims against the health insurers for breach of contract because Blue Cross’s

contract promises that a health care provider will provide care at discounted health

care costs.

We first observe that the supreme court in Emigh simply held that the

petition against the health insurers stated a cause of action under La.Civ.Code art.

1977 for breach of contract due to the failure of a third party to perform an

obligation. The supreme court further stated that it was offering no opinion as to

the success on the merits of the claim.

The fact that Mr. Gibson did not seek to sue his own health insurer does not

render him an inadequate class representative for the claims against Byrd Regional.

See Gunderson v. F.A. Richard and Assocs., Inc., 07-264, 07-331, 07-400 (La.App.

3 Cir. 2/27/08), 977 So.2d 1128, writs denied, 0-1063, 08-1069, 08-1072 (La.

9/19/08), 992 So.2d 953.

We find no manifest error in the trial court’s determination that Mr. Gibson

is an adequate representative of the proposed class.

Predominance

Byrd Regional also claims the trial court failed to complete an analysis of

the requirements of La.Code Civ.P. art. 591(B)(3), which requires Mr. Gibson to

show that any common questions of law or fact predominate over the individual

issues involved. It argues that there are numerous individual issues that will make

it impossible for the court to ultimately determine liability and assess damages

feasibly and efficiently across the class without conducting mini-trials. Mr. Gibson

argues that class certification has been approved by this court and the supreme

court even though there may be possible individual issues. He argues that there is

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a common issue that predominates: Whether the Defendant’s collection policy,

which was applied to all plaintiffs, violates the prohibitions under the Balance

Billing Act and the provider’s contractual obligations under Louisiana law.

“An inquiry into predominance tests ‘whether the proposed classes are

sufficiently cohesive to warrant adjudication by representation.’” Brooks v. Union

Pacific R.R. Co., 08-2035, p. 19 (La. 5/22/09), 13 So.3d 546, 560 (quoting

Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623, 117 S.Ct. 2231, 2249 (1997);

Vallare, 151 So.3d 984. “The predominance requirement ‘entails identifying the

substantive issues that will control the outcome, assessing which issues will

predominate, and then determining whether the issues are common to the class,’ a

process that ultimately ‘prevents the class from degenerating into a series of

individual trials.’” Brooks, 13 So.3d at 560 (quoting O’Sullivan v. Countrywide

Home Loans, Inc., 319 F.3d 732, 738 (5th Cir. 2003)).

We agree with the trial court that the issue of whether Byrd Regional’s

actions violated the prohibition found in the Balance Billing Act predominates over

any individual claims. As we previously stated, many of the claims will be so

small so as make individual actions impractical.

For the reasons set forth in this opinion, we affirm the trial court’s judgment

certifying this matter as a class action. All costs of this appeal are assessed to

National Healthcare of Leesville, Inc. D/B/A Byrd Regional Hospital.

AFFIRMED.

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