Class Action Defense Cases–Solon v. Midwest Medical: Illinois State Appellate Court Holds Statutory Authorization For Reasonable Expenses Up To $20 Did Not Support Charging $20 Flat Fee In Connection With Copy Services

Feb 19, 2009 | By: Michael J. Hassen

As Matter of First Impression, in Class Action Challenging $20 Flat Fee for “Handling” Copy Requests for Medical Requests, Statute Only Authorized Reimbursement of “Reasonable Expenses” which, by Definition, would Vary Among Copy Requests Illinois State Court Holds

Plaintiffs filed a class action against Midwest Medical Records Association (MMRA) alleging deceptive and illegal practices in violation of Illinois law; specifically, the class action complaint alleged that MMRA “overcharge[ed] patients for requested copies of medical records.” Solon v. Midwest Medical Records Ass’n, Inc., 898 N.E.2d 207, 208 (Ill.App. 2008). According to the allegations underlying the class action, MMRA is retained by health care facilities and practitioners to handle patient requests for copies of medical records; MMRA employees work on-site at the health care offices where they “receive medical records requests, locate and copy the requested records, and send the records to the patient along with a bill for services.” Id. The class action further alleges that MMRA does not charge the health care provider for its services but, rather, charges the patients a fee for providing the records requested, id. Specifically, MMRA negotiates a “price per page” that it will charge the patients, and adds a “flat $20 handling fee, which defendant refers to as a ‘process fee.’” Id., at 208-09. The class action alleged, inter alia, that this charge violated the Consumer Fraud and Deceptive Business Practices Act and the Uniform Deceptive Trade Practices Act, id., at 209. Defense attorneys moved to strike portions of the class action on the grounds that the flat $20 handling fee did not violate Illinois law, id. at 208. The trial court denied the motion but certified the following question for appellate review: “Is it reasonable per se for a provider of medical record copies under [sections 8-2001 and 8-2003 of the Code] to charge the full amount of the $20 process fee, or is the provider limited to a lesser charge if the evidence shows that the lesser charge is all that is reasonable?” Id., at 209. The appellate court concluded that the $20 fee was not per se reasonable.

In essence, the class action alleged that Illinois law “only permits defendant to charge for the lesser of the ‘reasonable expense of production, Illinois’ statutory price limit for copies applicable to the type of copies [defendant] furnished, or a fair price for the copies.’” Solon, at 209. The gravamen of the class action was that it was improper to charge a flat $20 handling fee in connection with the copy requests. Id. The Illinois appellate court recognized that this presented an issue of first impression, and it began its legal analysis by summarizing the rules governing statutory construction. Id. The relevant statute provides, “Every [health care provider] shall, upon the request of any patient * * *, * * * permit copies of [a patient’s medical] records to be made by him * * * or his * * * physician * * *…. The [health care provider] shall be reimbursed by the person requesting copies of records at the time of such copying for all reasonable expenses, including the costs of independent copy service companies, incurred by the health care facility in connection with such copying not to exceed a $20 handling charge for processing the request for copies * * *.” Id., at 209-10 (quoting 735 ILCS 58-2001 (West 2004)). Additionally, “the patient must reimburse health care providers for the cost of the copies at a maximum per-page rate that varies with the number of pages copied, as well as any shipping costs.” Id., at 210(citing 735 ILCS 58-2001, 8-2003 (West 2004)). Defense attorneys argued that a flat $20 fee is reasonable per se “because it is within the maximum amount allowed to be charged under the statute”; plaintiffs countered that the statute permits only “‘reasonable expenses’ incurred in connection with copying the records” in addition to the per page cost of the copies themselves, and that the amount of those expenses may not exceed $20. Id.

The Court of Appeal agreed with plaintiffs, concluding that “the legislature intended for patients to repay health care providers for the actual costs they incurred in processing the records request, rather than pay a flat fee in all circumstances, regardless of the costs incurred.” Solon, at 210-11. The Court rejected defendant’s interpretation of the statute because defendant’s argument, “which advocates for a flat fee, renders that language meaningless, in contravention of the principles of statutory construction.” Id., at 211 (citation omitted). In the appellate court’s view, “the legislature acknowledged that the actual cost of processing a records request could vary with the complexity of the request,” and explained further that “it stands to reason that the fewer records a patient requests, the less time defendant’s employees may spend processing the request” and, accordingly, “it would be unreasonable to charge the maximum amount of recovery to process a simple request.” Id., at 211. The trial court “is capable of determining the reasonableness of a health care provider’s processing costs based on evidence presented by the parties,” so defendant’s concerns in that regard are unpersuasive. Id., at 212. Accordingly, the appellate court affirmed the trial court’s ruling, answering the certified question in the negative because it could not be said that a flat $20 fee is per se reasonable. Id.

NOTE: One justice dissented, concluding that the $20 fee charged by defendant was per se reasonable. See Solon, at 212-15 (Greiman, J., dissenting).

Download PDF file of Solon v. Midwest Medical Records Association

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