Background
After receiving emergency treatment at Byrd Regional Hospital, Dennis Gibson alleged that the hospital improperly filed a lien for its undiscounted charges without first seeking payment from his health insurer. He brought a putative class action asserting claims under Louisiana’s Balance Billing Act and for breach of contract.
Gibson’s statutory claims were later dismissed as prescribed, leaving his contractual claims. Byrd sought summary judgment based on the assignment Gibson signed when treated, arguing that it imposed no duty on the hospital to bill his insurer before pursuing payment from him. The district court denied summary judgment, and the court of appeal denied supervisory relief.
The Court’s Holding
The Louisiana Supreme Court reversed and granted summary judgment to Byrd, dismissing Gibson’s remaining claims with prejudice. The Court held that a hospital’s contractual duty to submit charges to a patient’s insurer before collecting from the patient must arise from a specific, express contractual provision and cannot be implied from a general duty of good faith.
The assignment established Gibson’s obligation to pay charges not covered by insurance and to pay according to the hospital’s regular rates and terms, but it imposed no corresponding obligation on Byrd to seek insurance payment first. Because the language was clear and unambiguous, extrinsic evidence about patients’ expectations could not create an ambiguity. The Court also rejected Gibson’s quasi-contractual theories and overruled the earlier appellate decision in the case to the extent it held that summary judgment was inappropriate on these facts.
Key Takeaways
- A contractual prohibition against balance billing must rest on specific, express contract language rather than an implied duty.
- Language making a patient responsible for charges not covered by insurance does not require the hospital to bill the insurer before pursuing the patient.
- Extrinsic evidence cannot be used to create ambiguity in an otherwise clear written agreement.
Why It Matters
The decision resolves a conflict among Louisiana appellate courts over identical assignment language and limits contract-based billing claims when statutory Balance Billing Act claims are unavailable. Hospitals using this language may pursue patients directly unless another express contractual provision requires prior submission to insurance.
Justice Hughes dissented, reasoning that the statement making the patient responsible for charges “not covered” by insurance created a contractual issue and that the lower courts should have been affirmed.