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Tomlin v. Estate of Malone

June 10, 2003


On appeal from the Superior Court of New Jersey, Law Division, Cape May County, CPM L-820-00.

Before Judges King and Wecker.

The opinion of the court was delivered by: King, P.J.A.D.


Submitted: May 21, 2003

This is an appeal from an order granting summary judgment in favor of plaintiff Burdette Tomlin Memorial Hospital (the Hospital) on a bill for unpaid medical expenses in the amount of $18,472.76. Medicare had originally been billed for these services in the amount of $5,659.72. Medicare refused to pay the Hospital's bill because defendant's Medicare life-time-care coverage had expired. See Vencor, Inc. v. Standard Life and Accident Ins. Co., 317 F.3d 629 (6th Cir. 2003) (explaining limits of Medicare Part A coverage, 42 U.S.C.A.' 1395; 42 C.F.R.' 413). The Hospital then sought payment of more than triple the Medicare rate from the decedent-patient's estate. The Law Division judge granted the Hospital's motion for summary judgment in the amount of $18,472.76. We conclude that the judge erred and that the Hospital was only entitled to recover the Medicare rate from the estate, the sum of $5,659.72, in these particular circumstances.

The decedent, Mrs. Malone, was admitted as a Medicare patient"on numerous occasions prior to her receiving treatment that relates to this final bill." As noted, Medicare refused to pay the bill after Mrs. Malone died. The bill then was revised and she was sent a new statement for $18,472.76"almost a year after her death."

Lynn Riley, the Hospital's credit supervisor, testified in discovery that if the $5,659.72 amount had been paid by Medicare, the bill would have been satisfied in full. William Zauner, Vice President of Finance, certified that the $18,472.76 charges finally billed to Mrs. Malone and the estate were"the usual and customary charges for the services involved" and"were fair and reasonable." The Hospital rejected the estate's offer to pay the Medicare bill as"full and final settlement" of the claim.

At argument on rehearing, counsel for the estate urged his position this way:

MR. MCCANN: I'm not sure if it was clear from the original argument presented that this lady was accepted on this particular occasion into the hospital as a Medicare/Medicaid patient. She's been in the hospital a number of times. That was the condition on which she was accepted into the hospital. They accepted her under the current [sic] conditions and expected to render a bill for whatever their usual and customary charges were.

After some period of time, they determined -- well, Medicare determined that she didn't have any more money that they would pay out, so the hospital tripled the bill. This is -- there's no statutory scheme that gives them the right to do that. They don't have -- they didn't come to Mrs. Malone and say, oh, Mrs. Malone, your Medicaid ran out. You have an option of moving out of the hospital now, but if you don't, I want you to know that the room is going from two hundred dollars a day to siX hundred dollars a day, or something to that effect.

This woman was in the hospital for a number of days. They thought they were billing fifty-six hundred dollars. They billed fifty-six hundred dollars. They didn't get it. They must be thrilled to death that she ran out of payments -- that she ran out of money through Medicaid. There is no conscionable way they can just take and triple the bill and say that's our usual customary fee. That's like someone coming into my office for a pro bono case and you say, oh, I now discover you got money, I'm going to charge you whatever I please.

There's no -- nothing submitted on behalf of the plaintiff that says they have any right to do that. So my position is the usual and customary fee is what they anticipated they would be able to bill, not what they choose to bill after they find out that some provider is not paying. And I don't believe that was particularly and completely articulated in a prior argument.

In this particular circumstance, we agree with the estate's position. There is no evidence that the hospital alerted the decedent or her next-of-kin, her son John Malone, of any new billing practice or expectations if Mrs. Malone's Medicare benefits ...

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