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Taylor Capito received treatment in the emergency room of San Jose Healthcare System LP dba Regional Medical Center San Jose on two occasions. Regional is a major hospital in San Jose with an emergency room.

Regional initially billed Capito $41,016 for her two visits, including two “`Level 4′ Evaluation and Management Services Fee” charges of $3,780. Regional thereafter reduced Capito’s total bill to $8,855.38, after deducting adjustments and discounts.

Capito alleges she did not receive advance notice that Regional would charge the EMS fee in addition to each item of service and treatment provided by the hospital. Capito claims that had she been informed that she would be charged the EMS fee before incurring treatment, she would have left Regional and sought less expensive treatment elsewhere.
Capito filed a complaint against  on behalf of herself and all others similarly situated in June 2020, under the Consumer Legal Remedies Act (CLRA), which she amended shortly thereafter, challenging Regional’s “unfair, deceptive, and unlawful practice of charging [an EMS fee] without any notification of its intention to charge a prospective emergency room patient such a Fee for the patient’s emergency room visit.”

Capito claimed that Regional charged the EMS fee simply for seeking care in the emergency room – describing it as designed to cover overhead’ type expenses of operating an emergency room without correlating the fee to the individual items of treatment and service that a patient received, and that the EMS fee “invariably comes as a complete surprise to unsuspecting emergency room patients.”

Regional demurred and moved to strike the class allegations. In doing so, it briefed the legislative history behind the Payers’ Bill of Rights (Health & Saf. Code, § 1339.50 et seq.) and other federal and state regulations governing its pricing disclosures.The trial court sustained the demurrer and dismissed the case. And the Court of Appeal affirmed the dismissal in the unpublished case of Capito v. San Jose Healthcare System, LP – H049022, – H049646 (April 2023).

In another case, Joshua Naranjo filed a class action lawsuit against the Doctors Medical Center of Modesto Inc., seeking declaratory and injunctive relief, and alleging violations of the unfair competition law (UCL) and the Consumer Legal Remedies Act (CLRA) in connection with Medical Center’s emergency room billing practices. The Medical Center charged Naranjo a total of $12,889.93 before any discounts or adjustments were applied. The gross charge included a “Level 4” EMS Fee in the amount of $8,833.35. The trial court dismissed his case, however the Court of Appeal reversed and reinstated his class action against the Medical Center.

On July 26, the California Supreme Court granted review in the two different cases in which appellate courts had addressed the same issue and come to different conclusions. The first is Naranjo v. Doctors Medical Center of Modesto (2023) 90 Cal.App.5th 1193, a published decision of the Fifth Appellate District in which the court had ruled that the hospital was required to further disclose the EMS fee prior to treating ER patients. The second case is Capito v. San Jose Healthcare System, an unpublished decision of the Sixth Appellate District holding that no additional disclosure was required.

This month the California Attorney General filed an Amicus Brief in Capito urging the California Supreme Court to reverse the Court of Appeal. He urges the Supreme Court to “ensure that lower courts have clear guidance in deciding cases alleging fraudulent practices, and to adopt a standard definition of unfairness under the Unfair Competition Law, as the current lack of clarity inhibits effective enforcement and creates confusion.”

The California Hospital Association points out that for “over a decade, at least 15 different class action lawsuits have been filed against California hospitals for failing to disclose their facility fees before patients were treated.”

These lawsuits were brought even though each hospital had fully complied with both state and federal pricing transparency laws by disclosing the EMS fee in their chargemaster. While some of these lawsuits were settled or dismissed by the plaintiff after losing important rulings, other cases are on appeal or proceeding to trial.”  

The California Hosptial Association has filed as amicus in both Captio and Narango.