• Court of Appeals Rejects Uninsured Patient's Objection to Hospital's Charges
  • March 30, 2010 | Author: Stephen R. Ryan
  • Law Firm: Miller Johnson - Grand Rapids Office
  • In the published decision, Holland v. Trinity Health Care Corporation, the Michigan Court of Appeals held that an uninsured patient must pay a hospital’s “charges” and is not entitled to discounts provided to contractual or government payors.

    Patient Kellie Holland was treated at Trinity Health’s St. Joseph Regional Medical Center in 2005.  At admission, the patient signed the hospital’s standard contract promising to pay the hospital’s “usual and customary charges.”  Upon receipt of the hospital’s undiscounted billings, the patient filed suit, claiming that she was only obligated to pay at the discounted rates the hospital accepted from contracted or government payors. 

    The Oakland County Circuit Court rejected the patient’s claim and awarded judgment to the hospital.  In a published decision, the Court of Appeals affirmed, holding that the contract between the hospital and patient required payment at the hospital chargemaster prices rather than amounts the hospital accepted from contracted or governmental payors.  The Court of Appeals ruled that the hospital’s admission contract was not ambiguous and that the contract required payment at the undiscounted chargemaster rate.  The Court rejected authority from other states, which defined “charges” as the amount “accepted by the hospital” in payment of a bill. 

    Hospitals across the country are facing pressure to provide discounts to uninsured patients.  While this pressure will undoubtedly continue, Michigan law now rejects court-imposed discounts that conflict with an admission contract.  The decision is consistent with Michigan’s no-fault authority, which distinguishes “charges” from “discounted payments” and bucks the national trend mandating discounts to uninsured patients by prohibiting bills at chargemaster rates.