Typically, claims against health care providers are adjudicated through the Tennessee Health Care Liability Act. In Franks v. Sykes, No. W2018-00654-SC-R11-CV (Tenn. May 1, 2020), the Tennessee Supreme Court ruled that certain claims against health care providers may be pursued through the Tennessee Consumer Protection Act. The key question in these cases is “whether the health care provider was acting in a business or in a professional capacity.” Franks, slip op. at 7.
The factual scenario in the Franks case has unfortunately become more common lately in Tennessee. Essentially, the plaintiffs were injured in automobile crashes and received medical treatment from the defendant health care providers. Although the plaintiffs had health insurance coverage for their treatment, the defendants did not file claims with the plaintiffs’ health insurance companies, and instead filed hospital liens for the full amount of the hospital bills. This goal of this tactic was to receive the full, undiscounted amount of the hospital charges rather than the discounted amount negotiated by the plaintiffs’ health insurance companies.
Although the plaintiffs did not allege that the health care providers deviated from the standard of care in the treatment they provided, the plaintiffs asserted that the defendants’ debt collection practices violated the Tennessee Consumer Protection Act. Based on these facts, the Supreme Court ruled in favor of the plaintiffs:
Under this analysis, when a plaintiff alleges an injury caused by a health care provider’s business practices—including, but not limited to, deceptive practices in advertising, billing, or collections—the plaintiff may state a claim under the Act. When a plaintiff asserts a claim that an injury is caused by a health care provider’s professional conduct, such as a deviation from the applicable standard of medical care, then the Act does not apply because that claim would be based on medical negligence under the Tennessee Health Care Liability Act.Franks, slip op. at 7.
Reversing the lower court decision, the Supreme Court held that the plaintiffs “have stated a cause of action under the Act by alleging that they were injured by unfair or deceptive acts of the Hospitals that affect the conduct of trade or commerce.” Franks, slip op. at 9.
This decision represents a victory for Tennessee consumers and properly enforces the agreements negotiated between hospitals and insurance companies.
To read this decision, use this link: http://www.tncourts.gov/sites/default/files/franks.roy_.opn_.pdf