Missouri Supreme Court sides with Mercy Hospital St. Louis in class action over billing practices

In a 3-2 decision issued Jan. 29, the Missouri Supreme Court affirmed a summary judgment in favor of Thompson Coburn client Mercy Hospital St. Louis (formerly known as St. John’s Mercy Medical Center) in a class action over the billing practices of several St. Louis hospitals. The court’s decision may assist other health care providers by affirming the fact that insured patients cannot speculatively claim they could be damaged by questionable billing practices if their insurers paid the alleged overcharged amounts.

The class action initially was filed in St. Louis City Circuit Court in 2004. The plaintiffs alleged a physician had “miscoded” and overcharged for certain medical procedures, and that Mercy and the other defendant medical centers “upcoded” the medical center’s charges.

Over the next eight years, the suit traveled to the U.S. District Court for the Eastern District of Missouri, where U.S. District Court Judge Jean Hamilton ruled the plaintiffs lacked standing and failed to show they had been injured because insurers had paid the medical bills and but were not included in the class. After the case was sent back to the St. Louis Circuit Court, Circuit Judge Robert Dierker granted the hospitals’ motion for summary judgment, a ruling unanimously upheld by the Missouri Court of Appeals Eastern District in May 2012.

In its Jan. 29 decision, the Missouri Supreme Court affirmed the judgment, agreeing with Mercy that the plaintiffs had not submitted any proof that they had been damaged.

“On the facts here, plaintiffs’ insurers were billed for and paid the alleged overcharges, and plaintiffs’ potential liability remained a speculative harm that did not materialize,” Judge Mary Rhodes Russell wrote in the majority opinion, joined by Judges Zel Fischer and Laura Denvir Stith. Chief Justice Richard Teitelman and Judge Patricia Breckenridge dissented. Judges George Draper III and Paul Wilson did not participate.

Partners Allen Allred and Larry Friedman represented Mercy in the trial court, federal court, the Court of Appeals and the Supreme Court. Allred argued the appeal on behalf of Mercy in the Court of Appeals and the Supreme Court, and also argued an appeal from the federal court’s dismissal in the 8th U.S. Circuit Court of Appeals.