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N.C. Supreme Court: Charlotte-Mecklenburg Hospital Authority v. Talford- Standard for Establishing Medical Debts

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By Ed Boltz, 19 June, 2012
Summary: Mr. Talford received medical treatment at the Charlotte-Mecklenburg Hospital (“CMH”), but was unable to pay the asserted $14,419.57 bill. CMH sued presenting as evidence an Affidavit from its Director of Revenue Management (“DRM”)stating that the amounts charged were reasonable because it “was consistent with the amounts charged to all similarly situated patients, was ‘within industry norms for similar facilities providing similar services at similar levels of care’ and was ‘compliant with various published billing and charging regulations and guidelines, including those for Medicare and Medicaid Services.’” Salford, while admitting that services had been provided, contended that these charges were excessive. At issue on appeal was whether the Affidavit, which did not include any statement regarding whether the DRM was competent to make statements about the reasonableness of fees. The North Carolina Supreme Court held that “while a party’s bill for services may be some evidence of the value of the work performed ... a ledger sheet showing the amount an individual wants to be paid for a service the provider contends was performed is not sufficient, standing alone, to establish the service’s market value.” Instead, it should include “some reference or comparison to a ‘community or industry standard’”. In this case, the Majority felt that, while it would be “the better practice” to expressly state that “the Affiant is”familiar either with the amounts other similar facilities charge for medical services or with various published billing regulations and guidelines” and should “provide itemized comparisons of the amounts plaintiff charged for a particular service and either the amounts other facilities charge for the same service or any applicable regulations or guidelines regarding such charges”, it was permissible to infer that the DRM was qualified to provide this information. The Dissent, however, would have made such findings mandatory and returned this case to the trial court for further findings. Commentary: Even though a loss for Talford, this case does establish grounds for both medical collection lawsuits and also objecting to Proofs of Claim filed by medical (and other service provider) creditors in bankruptcy cases. At a minimum, Complaints, supporting Affidavits and/or Proofs of Claim must include the following: 1. A reference or comparison between the amount charged and a “community or industry standard.” It should also contain: 2. An express statement that party signing the Verification of the Complaint, Affidavit or Proof of Claim is familiar either with the amounts other similar facilities charge for medical services or with various published billing regulations and guidelines; or 3. Itemized comparisons of the amounts charged for a particular service and either amounts other facilities charge for the same service or any applicable regulations or guidelines regarding such charges. This can be a sticky wicket for medical providers, in particular, to navigate, since they would need to comply with these comparison requirements, while at the same time not disclosing private medical information in violation of HIPAA. For a copy of the opinion, please see: Charlotte-Mecklenburg Hospital Authority v. Talford- Standard for Establishing Medical Debts.pdf

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