Hospitals Sue for EMTALA Services to HMO Members

A Richmond Circuit Court says plaintiff hospitals do not have a private right of action under Va. Code § 38.2-4312.3(B), which governs provision of emergency services under the federal Emergency Treatment and Active Labor Act, to sue defendant HMO for failure to pay for emergency services provided to HMO members, by plaintiff hospitals, which are not participating medical providers in the HMO.

Plaintiff hospitals allege that defendant Optima Health Plan, a Virginia licensed HMO, violated Va. Code § 38.2-4312.3(B), causing $703,646.34 in damages to plaintiffs, for services rendered to Optima members as required under the federal Emergency Treatment and Active Labor Act, 42 U.S.C. § 1395dd. Under EMTALA, a hospital must provide emergency services to any individual, regardless of their insurance coverage, who presents with an emergency medical condition. Between July 11, 2006 and July 13, 2008, the hospitals provided EMTALA services to Optima members because either Optima referred its members to these hospitals or Optima failed to otherwise have a system for 24-hour emergency access. The hospitals have billed Optima requesting payment for emergency services rendered to Optima members, but Optima has not provided any reimbursement because the hospitals are not participating medical providers with Optima.

The commonwealth is not inclined to recognize private rights of action that have not been clearly legislated because of its regard for the state legislature as a repository of sovereign powers, whose dispensation must in any context be strictly construed. These principles have been used to foreclose litigants from pursuing private rights of action in any number of contexts.

In this case, the only remedy contemplated in Chapter 43, which governs HMOS, can be found in Va. Code § 38.2-4316(A)(8), which states the commission may suspend or revoke any license issued to an HMO if it finds certain conditions exist, or if the HMO has otherwise failed to substantially comply with the chapter’s provisions.

Like the exclusive administrative oversight established in similar regulatory schemes such as CRESPA, the Virginia Wage and Hour law, and the Unfair Insurance Practices Act, this Code section appears to provide suspension or revocation of the HMO licenses as the only remedy available for enforcing HMO compliance with this chapter, including the disputed statute governing reimbursement for EMTALA services.

Given the dearth of case law in the commonwealth on these issues, the court has considered the persuasive authority of other states.

In this case, the legislative history is spare and the explanatory letter of the Virginia Commissioner of Insurance of the State Corporation Commission does not comment on whether a private right of action exists. Rather, it directs all HMOs to review their procedures to ensure compliance and then notify the Bureau of Insurance within 60 days of the letter of any corrective measures that will be implemented for noncompliance that is identified. Although the hospitals likewise had a duty under EMTALA to render services without regard to a patient’s insurance status or ability to pay, this duty alone provides insufficient reason to find a private right of action in the commonwealth without even a hint of the supporting legislative and administrative intent evident in Bell v. Blue Cross of Cal., 131 Cal. App. 4th 211 (2005).

In light of Virginia’s strict construction of statutes and the important differences between the instant case and the cases of Bell and Peter F. Merkle M.D., P.A. v. Health Options Inc., 940 So. 2d 1190 (Fla. Dist. Ct.App. 2006), the court will sustain the demurrer to count I without leave to amend.

Riverside Hospital Inc. v. Optima Health Plan (Snukals) No. CL10-88, Feb. 17, 2011; Richmond Cir.Ct.; Emily M. Scott, Todd Gerber for the parties. VLW 011-8-064, 5 pp.