Martis v. Pekin Memorial Hospital, Inc.

JUSTICE McDADE,

specially concurring in part and dissenting in part:

The majority has found that, assuming “a private right of action exists under the Medical Practice Act, plaintiff has nonetheless failed to establish that defendants engaged in fee-sharing or fee-splitting” (395 Ill. App. 3d at 949) and, therefore, plaintiff has failed to allege a violation of section 22(A)(14) of the Medical Practice Act. 395 Ill. App. 3d at 949. The majority has found that defendants’ alleged violation of the Medical Practice Act cannot constitute a violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) because the Medical Practice Act is not an enumerated statute under section 2Z of the Consumer Fraud Act. 395 Ill. App. 3d at 950.

The majority also finds that “defendants’ professional component billing was not an unfair or deceptive practice” (395 Ill. App. 3d at 952) because plaintiff obligated himself to pay for indirect professional component services by initialing the authorization form for services provided directly or indirectly to him. 395 Ill. App. 3d at 952. Similarly, the majority holds that because plaintiff entered into an express contract with the hospital, pursuant to which he agreed to pay for all direct and indirect services provided to him by independent physicians, plaintiff has failed to state a claim for unjust enrichment. 395 Ill. App. 3d at 952. Finally, the majority holds that plaintiff failed to state a claim under the Medical Patient Rights Act because his bill contains a clear and thorough explanation of defendants’ charges. 395 Ill. App. 3d at 953.

I agree with the majority’s judgment that the trial court properly dismissed plaintiffs direct claims under the Medical Practice Act and the Medical Patient Rights Act because I believe that neither statute grants plaintiff a private cause of action under the Acts. Therefore, I concur in that portion of the judgment. For the following reasons, I dissent from the remainder of the majority’s findings and judgment.

The majority concludes that defendants did not engage in fee-splitting or fee-sharing in violation of section 22(A)(14) of the Medical Practice Act because “the bills from the hospital and pathology group are for separate services.” 395 Ill. App. 3d at 949. I disagree with the majority because I believe that plaintiff has raised a material question of fact as to whether the bills from the hospital and pathology group were not for separate services but were in fact for the same service.

The majority relies heavily on decisions of other courts to conclude that defendants’ practice of billing for professional component services of pathologists is not unfair or deceptive. I find that the cases the majority relies upon are of limited persuasiveness not only because they lack precedential weight in this court but, primarily, because those cases present different questions than those raised here. Most notably, I find Central States Health & Welfare Fund v. Pathology Laboratories of Arkansas, 71 F.3d 1251, 1253 (7th Cir. 1995), of limited persuasiveness. The Central States court’s actual decision focuses on whether the plaintiff was required to pay the pathology group under the parties’ written agreement.

The Central States court found that in November 1991 the insurer simply “stopped paying the professional component bills, pointing to Article 4.11 of its Plan Document, which restricts payment to the expenses of a person who ‘receives treatment.’ The professional component fee does not signify that the patient received any treatment by a pathologist and therefore, the Fund concluded, is not compensable.” Central States, 73 F.3d at 1252-53. The lower court held and the Seventh Circuit affirmed that the group was entitled to payment under the agreement because “the Fund had been aware of the nature of professional-component bills long before November 1991.” Central States, 73 F.3d at 1253. Central States is best interpreted as holding that the plaintiff could not reinterpret the parties’ agreement long after it became effective and while it remained in effect.

In this case, plaintiff has raised a question of material fact as to whether the hospital and the pathology group billed him for the same service. Because the facts are so similar, Central States is instructive, in my opinion, only on that question. The Seventh Circuit found that the district court judge held that “the professional component does not represent ‘treatment’ within the meaning of §4.11 of the Plan Document because Pathology Laboratories cannot demonstrate that it provided hands-on services for any particular patient.” Central States, 73 F.3d at 1253.

Notably, the Central States court did not disturb the district court’s determination that the pathology group did not provide treatment to a particular patient. The Seventh Circuit’s written opinion indicates that it agreed with the district court’s assessment. It found that “[t]he professional component *** spreads costs across all patients.” Central States, 73 F.3d at 1252.

If the trier of fact in this case were to find, as did the court in Central States, that the pathology group provides “supervisory services of value to all patients, and interpretation services of value to [(only)] some” (Central States, 73 F.3d at 1253), then it might also reasonably infer that a portion of the pathology group’s bill is also embodied in the hospital’s cost for maintaining a laboratory. If the trier of fact were to find that defendants are billing plaintiff for the same service in providing and maintaining a laboratory, it could reasonably conclude that, in purporting to distinguish the cost of certain components of that service, defendants are in fact splitting plaintiffs payment for laboratory service in violation of section 22(A)(14). Alternatively, those findings could also reasonably result in a conclusion that the hospital and the pathology group are double-billing the patient for the same cost.

I have already stated my agreement with the majority that plaintiff does not possess the right to a private cause of action under the Medical Practice Act. The effect of defendants’ possible violation of the Medical Practice Act is not to provide a remedy to plaintiff under that statute but to serve as a basis for plaintiff’s claims under the Consumer Fraud Act, regardless that the Medical Practice Act is not listed in section 2Z.

I find that plaintiffs allegations are sufficient to state a cause of action for consumer fraud because defendants’ billing practices may violate the Medical Practice Act and, therefore, may constitute a violation of the public policy of this state. Vine Street Clinic v. HealthLink, Inc., 222 Ill. 2d 276, 295, 856 N.E.2d 422, 435 (2006), supports my conclusion. First, the HealthLink court held that the Medical Practice Act, and subsection (14) specifically, expresses the public policy of the state. HealthLink, Inc., 222 Ill. 2d at 296, quoting Practice Management Ltd. v. Schwartz, 256 Ill. App. 3d 949, 953 (1993) (“ ‘fee-splitting arrangements’ violated public policy”).

Second, a violation of public policy may constitute consumer fraud. The supreme court has recognized as follows:

“Section 10a of the [Consumer Fraud Act] creates a remedy for those suffering damage as a result of a violation of the Act. 815 ILCS 505/10a(a) (West 2004); Robinson[ v. Toyota Motor Credit Corp., 201 Ill. 2d 403, 417, 775 N.E.2d 951, 960 (2002)]. Recovery under the Act may be had for unfair as well as deceptive conduct. Robinson, 201 Ill. 2d at 417, 775 N.E.2d at 960.
In determining whether conduct or an action is unfair, we must consider whether the practice or action (1) offends public policy ***. [Citation.] The conduct ‘must violate public policy, be so oppressive as to leave the consumer with little alternative except to submit to it, and injure the consumer.’ [Citation.] All three criteria need not be satisfied to support a finding of unfairness; rather, an action may be unfair because of the degree to which it meets a single criteria or because it meets all three to a lesser extent. [Citation.]” Pantoja-Cahue v. Ford Motor Credit Co., 375 Ill. App. 3d 49, 60-61, 872 N.E.2d 1039, 1048-49 (2007).

I would find that plaintiff has stated a claim that defendants’ billing practices may violate the Consumer Fraud Act in that they may contravene public policy embodied in section 22(A)(14) of the Medical Practice Act. In Ramirez v. Smart Corp., 371 Ill. App. 3d 797, 807, 863 N.E.2d 800, 812 (2007), we found as follows:

“At a minimum, a reasonable inference from the limited evidence adduced indicates that Ramirez sufficiently pled a cause of action under the statute. This cause involves a uniform billing practice that, at this stage of the proceedings, has the potential to be unethical and offend public policy. Accordingly, we find that there is sufficient evidence to create a genuine issue of material fact as to whether Smart’s actions violated the Consumer Fraud Act. See Avery, 216 Ill. 2d 100 (generally, proof of elements of Consumer Fraud Act involves factual questions and determinations). Moreover, our conclusion is consistent with the requirement that the Consumer Fraud Act be construed liberally to promote its purpose. Robinson, 201 Ill. 2d at 417.” Ramirez v. Smart Corp., 371 Ill. App. 3d 797, 807, 863 N.E.2d 800, 812 (2007).

I disagree with the majority’s conclusion that the existence of an express contract in which plaintiff agrees to pay for indirect professional services is dispositive of plaintiffs claims. The majority’s reliance on plaintiffs agreement “to pay for all direct and indirect services provided to him by independent physicians” (395 Ill. App. 3d at 952-53) is misplaced. Nothing in the language of the authorization of treatment obligated him to pay a pro rata share of professional services the pathology group renders to the hospital or to all of its patients by, among its many other general duties, supervising the laboratory or being on call to review any patients’ results. The clear import of the contract is that the patient agrees to pay for services provided to him, not to anyone else.

Plaintiff has stated facts from which the trier of fact could reasonably find that the parties do not have a valid contract for a separate (arguably second) payment to the pathology group for its general services. Even if the parties did enter such a contract, for the reasons I have provided, a reasonable trier of fact could find that requiring a patient to pay for those general services in fact violates the Medical Practice Act and, therefore, constitutes consumer fraud.

Accordingly, I would also find that plaintiff has stated a cause of action for unjust enrichment.

“The doctrine of unjust enrichment underlies a number of legal and equitable actions and remedies. [Citation.] *** ‘[I]t is a condition that may be brought about by unlawful or improper conduct as defined by law, such as fraud *** and may be redressed by a cause of action based upon that improper conduct.’ [Citation.]” Mortis v. Grinnell Mutual Reinsurance Co., 388 Ill. App. 3d 1017, 1024 (2009).

A reasonable trier of fact could find that defendants’ billing practice requires patients to pay for services that the group does not actually provide to the patient but to the hospital in the form of “supervisory services” of the hospital’s laboratories which they are required by law to maintain. See Central States Health & Welfare Fund, 71 F.3d at 1253. A reasonable trier of fact could, therefore, also find that the cost of the pathology group’s “ ‘supervisory services’ ” is subsumed in the hospital’s “ ‘costs in furnishing *** technician’s service involved with [the] test(s)’ ” (395 Ill. App. 3d at 946). The hospital bills its patients separately from the pathology group for its costs in furnishing technician’s service involved with laboratory tests. If defendants have billed plaintiff twice for the same service, or retained plaintiffs payment by violating the public policy embodied in the Medical Practice Act, then a reasonable trier of fact could also find that the defendants have been unjustly enriched.

Accordingly, for all of the foregoing reasons, I would reverse the trial court’s order dismissing plaintiff’s complaint and remand for further proceedings.