On January 14, 2021, the Court of Common Pleas in Cuyahoga County, Ohio denied a healthcare foundation’s motion to dismiss, ruling that healthcare clinics and hospitals are not “physicians,” as that term is defined in the Ohio Consumer Sales Practices Act, and accordingly, are not exempt from liability resulting from consumer transactions. The case, Brakle v. Cleveland Clinic Foundation, could serve as a guide for how clinics and hospitals in Ohio should transact with their patients.

The case was brought by Amanda van Brakle (“Brakle”) alleging she received radiology imaging services on August 24, 2018, at the Cleveland Clinic Foundation (“Clinic”) facility in Lakewood, Ohio, and, of note, no physician was involved in administering the imaging test. Brakle further alleges that, prior to the imaging, she was never informed by the Clinic of the actual or estimated cost of the procedure. Subsequently, Brakle claimed that she made multiple partial payments totaling $288.00 toward the bill for the August 24 services; however, she stated that she never received a receipt for any of these payments and that all of these payments were not applied to the August 24 imaging. All these events culminated in the Clinic hiring a debt collector to pursue Brakle for her balance due for the August 24 imaging. In response, Brakle filed suit alleging the Clinic violated the Ohio Consumer Sales Practices Act (“CSPA”) by failing to provide her with receipts, notify patients of their right to a pre-service estimate, and provide such an estimate. Additionally, Brakle pled for certification of her suit as a class action under Rule 23 of the Ohio Rules of Civil Procedure.

The Clinic moved to dismiss Brakle’s claims on four grounds: (1) that the service it provided to Brakle is not a “consumer transaction” covered by the CSPA; (2) sections of the Ohio Administrative Code (“OAC”) relied upon by Brakle do not apply to the provision of medical imaging services; (3) that the attorney general lacked authority to regulate “medical billing” under section 5162.80 of the Ohio Revised Code (“Ohio Code”), and; (4) that the Clinic’s practices are not unfair or deceptive because the failure to apply Brakle’s deposits to the imaging bill is not an enumerated unfair or deceptive act in either the CSPA or the OAC. Finally, the Clinic requested that the Court deny certification as a class action because Brakle had not alleged facts showing that the Clinic was on notice that its conduct was deceptive or unconscionable.

The CSPA applies to all “consumer transactions” defined to include services provided to an individual for purposes that are primarily personal. It also prohibits a corporation engaged in the business of consumer transactions from committing unfair or deceptive acts in connection with such a transaction. Transactions between physicians and patients are specifically exempt from the statute; however, this exemption makes no mention of hospitals or clinics.

The Court promptly disagreed with the Clinic’s first reason for dismissal, stating that the Clinic’s case law did not say what the Clinic suggested it did, but instead supported the finding that the Clinic was not a physician under the CSPA. The Clinic’s second argument fared no better because the Court held that the purpose of the OAC’s unfair and deceptive acts and practices provisions is to apply to all consumer transactions, including this imaging appointment. The Clinic’s third reason was rejected because the section of the Ohio Code the Clinic relied upon in its reasoning was found to be unconstitutional in February of 2020 (11 months prior to the filing of this motion), but the Court stated, even if the section of the Ohio Code had not been deemed unconstitutional, it still would not have conflicted with the OAC to a point of precluding hospitals from having to adhere to the statute. The Court denied the Clinic’s fourth reason stating that it is impossible to foresee every consumer transaction that may be unfair or deceptive, leaving the question of whether unenumerated transactions can be unfair or deceptive to be answered by the finder of fact.

Finally, the Court denied the Clinic’s request to deny certification as a class action. The Court held that there are two circumstances which would allow the certification of a class action. First, if the conduct alleged by a plaintiff was an act declared by Ohio’s attorney general to be deceptive or unconscionable through the adoption of a substantive rule in the OAC. Second, if an Ohio court has found that the act or practice complained of is unfair, deceptive, or unconscionable. Here, Brakle alleged that she never received a receipt after making a payment, an action deemed deceptive by the attorney general. Accordingly, at this motion to dismiss phase, the Court could not grant the Clinic’s request to deny certification.

The Court noted that to avoid some of these issues, healthcare clinics and hospitals in Ohio can provide patients with a pre-service estimate based on the assumption that insurance will not cover the cost, i.e. a “worst-case scenario” estimate, and provide patients with receipts of each payment of their bill.