California Court of Appeal Decision Explores the Impact of EMTALA On Hospital Disclosure Of Emergency Room Charges

In a recent decision in Gray v. Dignity Health, the California Court of Appeal analyzed the impact of the federal Emergency Medical Treatment and Active Labor Act (“EMTALA”) statute, and similar provisions of California law, on hospitals’ disclosure of the fees for emergency medical care prior to providing emergency services. The court rejected an argument that hospitals have a duty to post emergency room rates in the emergency room and held that posting of such rates could violate EMTALA because it would discourage patients from seeking emergency medical care. The Court thereby affirmed that the requirements of EMTALA preclude an affirmative duty to disclose rates in the emergency room.

The plaintiff, Gordon Gray, received emergency services at a Dignity Health hospital and was distressed when he received a bill that included a charge for the use of the hospital’s emergency room (the hospital’s facility fee). Gray sued for violations of California’s Unfair Competition Law (“UCL”) and the Consumer Legal Remedies Act (“CLRA”), alleging that the hospital had acted unfairly by failing to disclose the facility fee prior to treating him. Gray did not contend that the hospital’s charge was too high or that the charge was not reflected in the hospital’s publicly available chargemaster as required by law. Gray’s sole claim was that the hospital’s charge for using its emergency room should have been disclosed in the emergency room itself, either by posting it on the wall or disclosing it by other means so that patients would see it prior to obtaining emergency services.

Not surprisingly, the court rejected Gray’s claim.  A prior case, Nolte v. Cedars-Sinai Medical Center, 236 Cal.App.4th 1401 (2015), had rejected similar claims in the context of a non-emergency physician office visit that took place in a Cedars-Sinai medical building. Cedars charged Nolte a facility fee for the office visit (in addition to the physician’s fee) and Nolte sued, claiming that charging the undisclosed fee violated the UCL and CLRA. The court upheld a dismissal of these claims, finding that the Conditions of Admission form that Nolte signed prior to the office visit disclosed that the services were being provided as an outpatient service of the hospital and that both the hospital and the physician would separately bill for their services. Because Nolte had agreed to pay the hospital for its services, and the challenged fees were set forth it the hospital’s publicly available chargemaster as required by law, the court held that Nolte could not make a claim under the UCL or CLRA.

The Gray court followed Nolte’s reasoning.  However, it went on to explain that Gray’s claim was even weaker than Nolte’s because it arose from Gray’s receipt of emergency medical services:

Not only did Dignity fully comply with all state and federal disclosure requirements, including the requirement that there be signage in its emergency room departments stating how its pricing information can be accessed . . ., but requiring individualized disclosure that the hospital will include an ER charge in its emergency room billing, prior to providing any emergency medical services, is at odds with the spirit, if not the letter, of the hospital’s statutory and regulatory obligations with respect to providing emergency medical care.

As we have recited, state and federal law governing emergency medical care require California hospitals to provide emergency treatment to any person presenting at an emergency department who needs emergency care. Care required to stabilize a patient must be provided prior to discussing the patient’s ability to pay with the patient or anyone else.  And after emergency medical care is provided, hospitals must, in their billing, notify patients of the availability of financial assistance.  Together, this multi-faceted statutory and regulatory scheme reflects a strong legislative policy to ensure that emergency medical care is provided immediately to those who need it, and that billing disclosure requirements are not to stand in the way of this paramount objective.

Further, Gray claims Dignity owes this pre-treatment disclosure duty in order to accomplish an objective antithetical to state and federal law—to discourage some patients from remaining in the emergency room and receiving medical care. He asserts, for example, that if signage were posted—identifying the cost of each of the five levels of ER Charges . . .—this would be “particularly beneficial” to patients with “relatively minor ailments” and go a long way towards making emergency departments “less crowded.” Even if lessening the load on our emergency rooms might be a laudable goal, Gray’s sweeping assumption that those seeking care at an emergency department can accurately diagnose whether their ailment is “relatively minor” and whether they can safely transport themselves or be transported to a lower acuity facility, is unsupportable. And while Gray complains this is a “paternalistic” attitude and asserts every person has a right to decide for him or herself whether to seek medical treatment at an emergency department, and to do so based on readily accessible cost information, this disregards the long-standing regulatory environment within which emergency departments operate, which emphasizes that no one in need of emergency care should be deterred from receiving it because of its cost.

The holding in Gray provides protection to hospitals from claims that they are obligated to post their charges in the emergency room or otherwise notify patients of those charges prior to providing emergency services. It is also a good reminder that EMTALA and California law prohibit hospitals from discouraging patients from seeking emergency medical care and that disclosing the hospital’s charges for emergency services in the emergency room prior to rendering services can be viewed as discouraging patients from seeking emergency medical care.