The Supreme Court of California dismissed a lawsuit arguing that hospitals not showing certain costs for emergency care prior to treatment violates state laws, ruling that the institutions are not obligated to disclose such fees.

The ruling was made in a class action lawsuit filed by plaintiff Taylor Capito against San Jose Healthcare System, also known as Regional Medical Center San Jose. In 2019, Capito was treated twice at the medical center’s emergency department and paid more than $41,000. Capito filed a complaint against the medical center in 2020, accusing it of not providing advance notice of evaluation and management services (EMS) fees.

She alleged that this amounted to an “unlawful, unfair or fraudulent” business practice under California’s Unfair Competition Law (UCL) and violated the state’s Consumers Legal Remedies Act (CLRA).

Capito’s claims were rejected by the trial court and by a court of appeals. The Supreme Court of California then took up the case.

In a Dec. 23 opinion, the Supreme Court dismissed Capito’s claims, agreeing with the two lower courts.

“Hospitals do not have a duty under the UCL or CLRA, beyond their obligations under the relevant statutory and regulatory scheme, to disclose EMS fees prior to treating emergency room patients,” the Supreme Court stated in its opinion.

“The California Legislature, the United States Congress, and numerous rulemaking bodies have already decided what pricing information to make available in a hospital’s emergency room. Just as importantly, they have decided what not to include in those requirements.”

The reason that authorities have avoided mandating the inclusion of certain fees is to prevent patients from getting dissuaded by seeing prices and opting out of potentially life-saving care, the court wrote.

Forcing hospitals to show EMS costs would lead to patients weighing the price against the necessity of such procedures. Insisting that such prices be shown assumes that patients in emergency rooms are capable of diagnosing “whether their ailment is relatively minor.”

In the lawsuit, the plaintiff did not accuse Regional Medical Center of failing to comply with the mandated disclosure requirements. Capito also did not allege that she was charged fees for services not provided or that the fees were excessive.

“Neither the UCL nor CLRA requires further disclosure of EMS fees beyond what the regulatory scheme requires,” the court stated in its opinion.

Burden on Hospitals

In June 2023, the organization filed an amicus brief in another lawsuit in which a plaintiff made arguments similar to those in the Capito case. The plaintiff said that California hospitals must disclose EMS fees to patients in emergency care prior to their treatment in accordance with UCL and CLRA laws.

Allowing such a policy would impose “an unreasonable duty” on hospitals, the CHA stated.

“Hospitals cannot determine the costs of patient care prior to treatment, especially emergency care. The treatment necessary for a particular patient depends on the severity of the patient’s condition, which is impossible for either the patient or the hospital to know in advance,” the CHA wrote.

“Besides, a patient’s financial responsibility for treatment costs depends on his or her insurance status and coverage. Even assuming a patient has insurance, the hospital cannot foresee whether, and to what extent, the insurer will provide coverage for the services ultimately rendered to the patient.”

Meanwhile, Sen. Gary Peters (D-Mich.) is looking into the potential impact of private equity-run emergency care services provided to hospital patients.

According to an April 1 statement, Peters sent letters to private equity companies and physician staffing companies asking for information on patient care and other matters.

The letters followed multiple interviews conducted by his office with more than 40 emergency medicine physicians across the United States.

“I am concerned that our nation’s largest emergency medicine staffing companies may be engaging in cost-saving measures at the expense of patient safety and care, which could put our nation’s emergency preparedness at risk,” Peters stated. “I am pressing these companies and their private equity owners for needed transparency.”