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Collection Actions: 9.3.1.3.1 Overview

The Affordable Care Act requires hospitals to develop written financial assistance policies (FAPs) approved by the hospital’s “authorized body,”209 which generally means the board of directors, board of trustees, other governing body, or a committee thereof.210

Among other requirements, FAPs must include:211

Collection Actions: 9.3.1.3.3 Billing and collections policies

A nonprofit hospital must have a separate policy on billing and collections, or its financial assistance policy must include a description of such policies.221 If the hospital has a separate billing and collections policy, the FAP must disclose the existence of the policy, and how to obtain a copy of it.222

The billing and collections policy or the FAP must describe:

Collection Actions: 9.3.1.4 Limited Protections Against Discriminatory Pricing

The Affordable Care Act limits what hospitals can charge patients who are eligible for financial assistance under the hospital’s FAP. Those patients cannot be billed more than the amount generally billed to individuals who have insurance covering such care.237 This provision appears to restrict discriminatory pricing, but only for FAP-eligible patients.238 It applies whether or not the patient is insured or has insurance coverage.239

Collection Actions: 9.3.1.5.1 Overview

The Affordable Care Act prohibits nonprofit hospitals from engaging in “extraordinary collection actions” (ECAs) before they make a “reasonable” effort to determine whether a person qualifies for the hospital’s financial assistance policy.248 The rule applies whether the ECA is taken against a patient who owes the debt or against any individual who has accepted or is required to accept responsibility for the care.249 Presumably, the latter category includes parents of minor patients and spouses

Consumer Class Actions: 1.1.4 Legal Citations and Resources

Since this treatise is essentially a “nuts and bolts” guide, the case citations that primarily support the plaintiff’s positions focus on consumer cases, are not exhaustive, and are intended primarily to illustrate the points made. Typical defendants’ arguments in opposition to class certification are also outlined, and some case precedent supporting defendants’ positions is provided to flesh these out. However, these examples are not meant to be a comprehensive compilation. United States Supreme Court class action cases are, of course, set out as applicable.

Consumer Class Actions: 1.3.2 Legislation, Court Decisions, and Corporate Practices Contribute to Limiting the Opportunities for Successful Consumer Class Actions

A class action is an exception to the general rule that litigation is conducted by and on behalf of individual named parties only.25 Due to the fact that individuals who may be bound by a class action judgment are not named parties, the Supreme Court has fairly characterized class actions as a “nontraditional” form of litigation.26

Consumer Class Actions: 1.4 Maintaining High Ethical and Practice Standards in Class Actions

As discussed above, the continued availability of the class action mechanism is essential to enforcing consumer rights, but there are constant efforts by industry to erode its availability. Every time a poorly conceived class action case results in bad publicity or a negative court opinion—and, even worse, every time a class settlement providing inadequate compensation to class members is negotiated and approved—it serves as ammunition for opponents of class action litigation.

Consumer Class Actions: 1.6.1 Joinder

On rare occasions, classes have been certified with as few as eighteen to twenty class members.35 However, if the class is small and if most or all of the class members can be identified prior to filing suit, an alternative is to join all the aggrieved persons as plaintiffs and represent them in a single case on a multi-plaintiff basis. Indeed, in this circumstance, a class may not be certifiable precisely because joinder is not impracticable, as required by Federal Rule of Civil Procedure 23(a)(1).

Consumer Class Actions: 1.6.2 Mass Arbitration

As discussed in § 1.7.2, infra, consumer contracts increasingly contain binding arbitration provisions with class action waivers.39 In such cases, the consumer may not be able to pursue a class action. Such limitations do not end the ability of the consumer attorney to attempt to obtain relief, however.

Consumer Class Actions: 1.6.3 Public Injunctive Relief

If public injunctive relief is available, as in California for example, this may be another alternative method of obtaining broad relief that will benefit more than just the individual consumer when it is difficult to prove damages for a class or when individual consumers are potentially bound by arbitration provisions with class action waivers. This type of relief is available in individual consumer cases in which the business is engaging in a practice that constitutes an ongoing threat to the general public.

Consumer Class Actions: 1.7.2.1 Generally

One of the most important issues to consider in evaluating a potential class action is whether the consumer contract includes a clause requiring any dispute to be submitted to binding arbitration and prohibiting arbitration on a classwide basis. An arbitration requirement is a matter of contract. So, if there is no arbitration requirement in the contract, or if the consumer did not assent to the provision, and the defendant cannot take advantage of another entity’s binding arbitration requirement, then arbitration should not be a concern.

Consumer Class Actions: 1.7.2.4 Mass Arbitration

When both class actions in court and in arbitration are foreclosed, an increasingly common alternative to obtain relief for a large number of consumers or workers is to proceed with a mass arbitration, sometimes referred to as an arbitration swarm. Mass arbitration involves numerous individual claimants bringing largely identical individual arbitration claims against the same defendant, at the same time, before the same arbitration provider, and through the same lawyers.

Consumer Class Actions: 1.7.4 The Effect of State Law Limitations on Federal Class Actions (Shady Grove)

Several states have statutes restricting the availability of class actions as an enforcement mechanism. These restrictions vary; some are broadly applicable bans, some apply to certain categories of cases or remedies, and some are included in and specific to particular substantive statutes.72 However, some of these legislative restrictions may not apply if the case is brought in federal court.73 The Supreme Court’s decision in Shady Grove Orthopedic Associates, P.A. v.

Truth in Lending: 5.12.1.2 Definitions

In many consumer loans, contractual provisions permit changes to the interest rate after consummation. These loans are commonly known as “variable rate” transactions. Mortgages with variable rate provisions are typically called adjustable-rate mortgages or ARMs.

Variable rate loan notes use some terminology not found in fixed rate loan documents. The following three terms are critical:

Collection Actions: 9.1.5 Determining the Extent of a Consumer’s Medical Debt

A single medical incident will often create debts owed to a variety of actors. For example, a single hospital visit can result in bills from the ambulance service, the hospital itself, the surgeon, the anesthesiologist, and medical equipment providers.88 Even if a patient has insurance coverage, is able to obtain charity care, or can negotiate a settlement to cover a hospital bill, they may still owe significant debts to a physician or other health care provider.