"When an entity attempts to skirt Louisiana law in order to increase profits, then seeking to increase profits becomes sinister."
In a blistering judgment that puts an end to Acadian Ambulance's "illegal" billing practice across the state and questions the company's truthfulness, 12th Judicial District Court Judge Mark Jeansonne ordered the Lafayette-based ambulance services provider to pay $17 million to a class of approximately 14,000 plaintiffs. The judgment was handed down last week in Avoyelles Parish in the case of Keisha Desselle et al vs. Acadian Ambulance Service and signed by Jeansonne Thursday.
The plaintiffs challenged Acadian's practice of filing liens against insurance settlements and civil awards paid to accident victims rather than accept their insurance.
Here's how the Acadian billing system works: Acadian routinely enters into contracts with health insurance companies like Blue Cross/Blue Shield of Louisiana in which Acadian offers services to Blue Cross customers at an agreed-upon reduced rate. If Jane Doe, a Blue Cross customer, has a heart attack or suffers some other kind of emergency injury at her home and Acadian transports her to the hospital, the ambulance company will bill Blue Cross at that reduced rate. But, if that same Blue Cross customer is in a car accident and there's a third party involved who may be at fault, Acadian will set Jane Doe's bill aside and wait to see what happens. If Jane Doe gets a settlement from that third party's insurance company, Acadian will bill Jane Doe at the full price, not the reduced rate Acadian and Blue Cross agreed on in the contract. Read more about Keisha Dessell, et al v. Acadian Ambulance Service, Inc. in IND Monthly's March cover story, "A Real Class Act."
In finding that Acadian's practice of not submitting a patient's claim to the health insurance company and instead filing a lien against the patient, the third party liability carrier and the patient's attorney was illegal, the judge awarded the plaintiffs $6.9 million as reimbursement for payment of a sum not due, along with interest from the date of each wrongful payment. The judge further awarded $10.3 million in general damages for each class member from Oct. 29, 2009, to the present, along with interest. The court took the average of each claim and multiplied it by five to get a damage figure per claim, then multiplied that number by the number of class members.
The judge did not mince words in recounting Acadian's testimony during the trial.
"... [E]xtracting the truth from Acadian proved very difficult," Jeansonne writes. "At the outset, this Court recognizes that increasing one's profit margin in not evil. However, when an entity attempts to skirt Louisiana law in order to increase profits, then seeking to increase profits becomes sinister."
Acadian's practice of issuing liens (redacted example above) on insurance settlements, essentially taking a cut from the accident victim's compensation,
is illegal, an Avoyelles Parish judge ruled last week.
The judge further ordered Acadian to immediately discontinue its lien practices and "balance billing" (billing the patient for the difference between the negotiated rate of reimburse and what Acadian wants to charge) for patients who have health insurance and are involved in liability accidents. The court explained that Acadian is a contracted health provider with companies like Blue Cross/Blue Shield and agrees as part of the contract to accept the patient's health insurance as payment: "The result of this agreement is that Acadian agrees to file a claim with the patient's health insurance carrier, agrees to accept the contract reimbursement rate from the health insurance carrier as payment in full, and agrees to only seek deductibles, co-insurance, or co-payments from a patient after receiving an explanation of benefits from the health insurance company."
As far back as the 1990s Acadian implemented a company-wide policy for this class of patients.
In 2003, however, the state Legislature passed the Health Care Consumer Billing and Disclosure Act, which went into effect in January of the following year. The law prohibits a contracted health care provider from collecting or attempting to collect from a patient any amounts in excess of the contracted reimbursement rate, or any amounts that are the health insurance company's liability. "There are no exceptions in this law that allows a provider to act otherwise when treating a patient involved in a liability accident," Jeansonne writes. The judge says most telling was the testimony of longtime Acadian employee Debra Martin, who is in charge of billing, claims and liens, noting that she admitted money being sought by Acadian came from the patient's settlement and that Acadian was looking for the patient to pay the bill - "a clear violation of the Legislature's intent to protect the insured public."
The practice may be exclusive to Acadian as an ambulance service provider but is not uncommon among hospitals in the state; a number of suits against hospitals for a similar billing practice are under way. Lake Charles attorney Lee Hoffoss, who is among the attorneys representing the plaintiffs in the Desselle case, has at least seven lawsuits with similar claims pending against hospitals in Calcasieu, Evangeline, Avoyelles, Jefferson and Webster parishes. He has also filed suit in Avoyelles Parish against Lafayette-based Schumacher Group, which Hoffoss claims for a short time took part in the practice.
Hoffos says Acadian "ramped up" the practice in 2005, after the state Attorney General issued an opinion that collecting from a third party or the patient's attorney did not violate the law's prohibition against collecting from the patient.
Jeansonne did not share that opinion and believes Acadian did not either.
In court testimony, Acadian admitted it lobbied the state Legislature to amend laws that would clarify the provider-lien statute. Its efforts were not successful, the court notes, saying Acadian "sought legislative blessing of its practices, merely to legalize its profits."
The court found that Acadian's actions not only violated the 2003 law but also the member provider agreements it has with Blue Cross, Mutual of Omaha, Humana, GEHA and Golden Rule, "as all of these agreements prohibit what Acadian has done," Jeansonne writes. According to court documents, Blue Cross' general counsel testified that Acadian made numerous attempts to get Blue Cross to allow it to balance bill patients involved in liability accidents but that Blue Cross' contracts don't allow for the practice.
Acadian will appeal.
"Unfortunately, the verdict announced in the Desselle, et al vs. Acadian Ambulance Service case was not unexpected by Acadian Ambulance," writes Allyson Pharr, Acadian's senior vice president for legal and governmental affairs, in an emailed response. "Based on factors unrelated to the merits of the case, while we are disappointed, we are regrettably not surprised by this ruling and look forward to having the merits of the case fully and properly examined by the Appeals Court. This suit is about an interpretation of a contract regarding billing procedures and Acadian firmly believes that the evidence and law do not support the verdict as rendered and will continue to defend our rights under the contract and our billing process."
Hoffoss fully expects to win on appeal. "For a decade we've been dealing with these billing practices. We, as lawyers, just got a little fed up with the practice," he says. "We feel confident in the sound basis of the judgment. We feel confident the law is on our side."
This is the second major legal blow to Acadian this year. In August a jury in Iberville Parish awarded $117 million in a case involving a woman who was left paralyzed and brain damaged when the ambulance she was riding in crashed into the back of a sugar cane truck. The award was reduced to $104 million in November. It's unclear what portion of that will be paid by Acadian.
"Acadian settled within its authority prior to the District Court trial in which the original $117 million verdict was rendered," Pharr writes. "The only defendant parties remaining in the case at the time it was tried were the excess insurers. Therefore, all decisions made during the trial and on appeal have been those of the attorneys representing the excess carriers."