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McAteer v. DCH Regional Medical Center

United States District Court, N.D. Alabama, Southern Division

January 2, 2020

MITCHELL MCATEER, on Behalf of Himself and All Others Similarly Situated, Plaintiff,



         This class action suit comes before the Court on a renewed motion to dismiss filed by defendants DCH Regional Medical Center and DCH Health Systems, (Doc. 42), and a motion to dismiss filed by defendant Avectus Healthcare Solutions, LLC, (Doc. 46). On behalf of a proposed plaintiff class, Mitchell McAteer alleges that DCH and Avectus wrongfully billed and collected payments from insured patients and collected payments that exceeded what the DCH defendants were entitled to recover under their contracts with Blue Cross/Blue Shield of Alabama and other insurers. (Doc. 40, pp. 1, 3, ¶¶ 3, 11).

         Mr. McAteer seeks recovery on seven counts: (1) violation of Alabama Deceptive Trade Practices Acts (“ADTPA”); (2) tortious interference with contractual relationship/business expectancy; (3) unjust enrichment; (4) money paid by mistake; (5) civil conspiracy; (6) breach of contract; and (7) injunctive relief. (Doc. 40, pp. 11-18). DCH and Avectus argue that the Court may not exercise jurisdiction over these state law claims under CAFA's home-state exception. For the reasons stated below, the Court disagrees.


         Rule 12(b)(6) of the Federal Rules of Civil Procedure enables a defendant to move to dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6).[1] When evaluating a Rule 12(b)(6) motion to dismiss, a district court accepts as true the allegations in the complaint and construes the allegations in the light most favorable to the plaintiff. See Brophy v. Jiangbo Pharms. Inc., 781 F.3d 1296, 1301 (11th Cir. 2015). The Court reviews Mr. McAteer's factual allegations accordingly.


         DCH Health Systems, Inc. provides medical services and operates a medical facility called DCH Regional Medical Center. (Doc. 40, p. 2, ¶ 7). Defendant DCH Regional Medical Center is affiliated with DCH Health Systems, Inc. (Doc. 40, p. 2, ¶ 8).[2] DCH entered into contracts with health insurance providers, including Blue Cross/Blue Shield of Alabama, to provide medical services to insured patients at contracted rates. (Doc. 40, p. 3, ¶ 12). Those agreements obligate DCH to provide medical services to patients at the contract rate, bill the patients' insurance carriers, and accept payment from the patients' insurance carriers in satisfaction of the patients' debts. (Doc. 40, pp. 3-4, ¶ 12).

         When a patient arrives at the hospital, DCH screens the patient to determine why the patient requires treatment and “whether payment sources other than health insurance are available.” (Doc. 40, p. 4, ¶ 15). If DCH classifies a patient's account as part of its “accident claims group, ” then that patient's account is added to a “work list” that DCH provides to Avectus. (Sealed Doc. 48-1, p. 4; Sealed Doc. 48-2, p. 2). According to the agreement between Avectus and DCH, the phrase “accident claims group” refers to “those accounts of [DCH] which are identified as claims in which the patient's medical treatment is actually or potentially related to an accident or injury.” (Sealed Doc. 48-2, p. 2). The agreement also provides that “[t]he parties have established a criteria for identifying these claims, which is attached hereto as Exhibit ‘B'.” (Sealed Doc. 48-2, p. 2). Exhibit “B” is a list of billing codes that cause a patient's file to be flagged for inclusion on ACH's “work list.” (Sealed Doc. 48-2, p. 7; see also Sealed Doc. 48-1, p. 4).

         If DCH places a patient's account on the “work list, ” then DCH submits that patient's files to Avectus rather than the patient's insurance carrier. (Doc. 40, p. 4, ¶¶ 16-17). When it receives a file, Avectus evaluates the file and determines whether the patient has sources of payment other than health insurance. (Doc. 40, p. 4, ¶¶16-17). If other payment sources exist, then Avectus contacts the patient and demands full payment for the medical services performed by DCH. (Doc. 40, p. 5, ¶ 19). In some cases, Avectus files and perfects liens on a patient's third-party tort claims; in others, Avectus seeks medical payment benefits from an auto insurer. (Doc. 40, p. 5, ¶ 20). Ultimately, Avectus negotiates with a patient and, according to Mr. McAteer, determines whether, and for what amount, to settle with that patient. (Doc. 40, p. 5, ¶ 21). For these services, Avectus receives from DCH a percentage of every dollar Avectus recovers. (Doc. 40, p. 5, ¶ 22; Sealed Doc. 48-2, p. 7).

         In November of 2015, Mr. McAteer received emergency medical care at DCH for injuries resulting from an automobile accident. (Doc. 40, p. 6, ¶ 24). At the time, Mr. McAteer was insured with Blue Cross/Blue Shield of Alabama. (Doc. 40, p. 6, ¶ 25). Mr. McAteer provided his health insurance information to DCH. (Doc. 40, p. 6, ¶ 25). Three months later, Avectus began contacting Mr. McAteer and his attorney for information about his accident and insurance claims related to the accident. (Doc. 40, p. 7, ¶ 31). During these interactions, Avectus notified Mr. McAteer of a hospital lien asserted against him for $4, 321.50. (Doc. 40, p. 7, ¶¶ 32- 33). Mr. McAteer “paid $2, 881.00 to satisfy DCH's lien.” (Doc. 40, p. 7, ¶ 37).

         Mr. McAteer alleges that DCH and Avectus gave him false or misleading information about DCH's billing practices and Avectus's involvement in the collection process. Specifically, Mr. McAteer alleges:

• “At the time of treatment, DCH never informed Plaintiff that it would not accept Plaintiff's health insurance. DCH never explained that it would be seeking the balance of Plaintiff's medical bills from him personally or by asserting a lien against his third-party tort claim. DCH failed to inform Plaintiff that DCH would be asserting a third-party lien against his personal injury recovery.” (Doc. 40, p. 6, ¶ 26);
• “DCH . . . did not inform Plaintiff that it had a contract with BCBSAL, requiring Plaintiff's charges be submitted to BCBSAL for payment and that DCH was precluded from pursuing any charges from Plaintiff and/or any asset of Plaintiff.” (Doc. 40, p. 6, ¶ 28);
• “Although Avectus represented that it was communicating with DCH concerning negotiation of the full amount of charges, Avectus acted independently in negotiating and reducing the amount of the lien. . . . Avectus never communicated with DCH about negotiation or settlement of Plaintiff's lien prior to ...

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