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Win for Uninsured Patients at Indiana Court of Appeals

The Indiana medical malpractice lawyers at Garau Germano Hanley & Pennington, P.C. have secured a major victory for uninsured patients at the Indiana Court of Appeals. On October 12, 2011, the court handed down itsopinion in the case of Abby Allen and Walter Moore v. Clarian Health Partners, Inc. In its opinion, the court held that when Indiana health care providers supply services to patients under a contract that does not specify a price for the services, their charges are required by law to be reasonable.

The case arose from charges billed by Clarian for medical services received by Abby Allen and Walter Moore. Clarian (now known as Indiana University Health) is one of the largest health care providers in Indiana, operating multiple hospitals throughout the state. At the time Moore and Allen received their treatments from Clarian, they signed Clarian's form contract for medical services. Under that contract, Clarian agreed to provide the necessary medical services while Moore and Allen agreed to "pay the account." The contracts specified no price for the services to be provided by Clarian and referenced no source from which pricing information could be obtained.

Clarian ultimately billed its "chargemaster" rates to Moore and Allen for the medical services provided. The chargemaster rates are significantly inflated over what Clarian receives for the same services from patients with private insurance or Medicare coverage. In fact, under Indiana law, if Moore or Allen had been an inmate in an Indiana prison, Clarian could not have received more than 65% of the chargemaster rates for the services rendered. It appears that the only individuals expected to pay Clarian's chargemaster rates are those least likely to be able to afford them -- uninsured patients.

Moore and Allen believed the charges levied by Clarian were unreasonable, and filed suit seeking a declaration of their rights under their contract with Clarian. They also sought to have the suit made into a class action on behalf of all other uninsured patients who have been subjected to Clarian's chargemaster rates.

The trial court dismissed Moore and Allen's claim, finding that it failed to state a claim upon which relief could be granted under Indiana law. That decision was reversed by the court of appeals. The court of appeals noted that for more than 120 years, Indiana law has "held that a reasonable charge will be implied in a contract that does not otherwise specify a charge." The court also relied heavily upon the Indiana Supreme Court's decision in Stanley v. Walker. In that case, the Indiana Supreme Court repeatedly noted the lack of correlation between hospital charges and the actual value of the services provided for those charges. In fact, the court in Stanley quoted a brief filed in the case by the Insurance Institute of Indiana, Inc. which asserted that "charges billed by health care providers are effectively irrelevant to the value of the services provided."

The court of appeals' decision reinstates Moore and Allen's claims and remands the case to the trial court for further proceedings consistent with the decision. Clarian has 30 days from the court of appeals' decision to seek a rehearing in the court of appeals or transfer to the Indiana Supreme Court.

This case is indicative of the scope of litigation pursued by the Indiana medical malpractice lawyers at Garau Germano Hanley & Pennington, P.C. While the firm's focus is on medical malpractice, the firm's attorneys pursue valid claims in other areas where individual's rights have been compromised. The firm's practice is statewide, including Fort Wayne, Evansville and South Bend. Contact us for a free consultation if you or a loved one has been injured as the result of another's negligence, or if your rights under a contract for health care or insurance have been violated.

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