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Limberg v. Sanford Medical Center Fargo

Supreme Court of North Dakota

June 30, 2016

Dustin Limberg, on behalf of himself and all others similarly situated, Plaintiff and Appellant
v.
Sanford Medical Center Fargo, a North Dakota corporation, Sanford Health Network North, a North Dakota corporation, Sanford North, a North Dakota corporation and Sanford, a North Dakota corporation and Does 1 through 25, inclusive, Defendants and Appellees

         Appeal from the District Court of Cass County, East Central Judicial District, the Honorable Thomas R. Olson, Judge.

          Barry L. Kramer (argued), Daniel E. Phillips (appeared), Mike Miller (on brief), and Todd M. Miller (on brief), for plaintiff and appellant.

          Vanessa L. Anderson (argued) and W. Todd Haggart (on brief), for defendants and appellees.

          OPINION

          Dale V. Sandstrom, Justice.

         [¶ 1] Dustin Limberg appeals after the district court dismissed his lawsuit against Sanford Medical Center for failing to state a claim for which relief could be granted. On appeal, he argues the district court should not have dismissed the case. Because the district court appropriately dismissed the case, we affirm the judgment.

         I

         [¶ 2] According to the complaint, Limberg sought emergency department care and treatment at Sanford Medical Center Fargo. He did not have insurance and was asked to sign, and did sign, Sanford's "Statement of Financial Responsibility and Release of Information" form ("the contract"). The contract provided:

I agree that I am financially responsible for all charges related to services provided by Sanford. I also agree to abide by Sanford's payment guidelines. I understand that these guidelines are available for my review, upon request to Sanford. I understand that if I have additional questions about my financial responsibility for Sanford's charges, I may contact Sanford Business Services.

         Limberg acknowledges that all patients sign this contract upon admission, regardless of whether they have some form of insurance or are self-pay patients.

         [¶ 3] Limberg explained in his complaint how Sanford calculates gross charges to bill patients for its services. Sanford maintains spreadsheets which include code numbers, descriptions, and gross charges for each of the thousands of items that are provided to patients upon request. Within the hospital industry, these spreadsheets are called Chargemasters. The Chargemaster rates, however, may differ from what Sanford receives as payment from governmental programs, commercial insurers, or HMOs because Sanford's reimbursement rates from these payers are governed by separate governmental regulations, contracts with insurers, or agreements with HMOs. Therefore, patients covered by governmental health care plans, commercial insurance plans, or other privately negotiated fixed fee agreements do not pay the Chargemaster rates. Self-pay patients such as Limberg, however, who are solely responsible for payment, are charged the Chargemaster rate. Limberg was not insured during the visit in this case and therefore was a self-pay patient. Limberg agrees his hospital bill was based on the Chargemaster rates.

         [¶ 4] After receiving his bill for the visit, Limberg filed a class action lawsuit seeking a declaratory judgment that Sanford's billing practices were unfair, unconscionable, or unreasonable because the contract contained an "open price" term. He claimed the term "all charges" as referenced in the Sanford contract was ambiguous and he and the class were liable to Sanford only for the reasonable value of the treatment and services provided to them. Sanford moved for dismissal, which the district court granted. Limberg appealed.

         [¶ 5] The district court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 27-05-06. Limberg's appeal is timely under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, §§ 2 and 6, and N.D.C.C. § 28-27-01.

         II

         [¶ 6] On appeal, Limberg argues Sanford's billing practices are unfair, unconscionable, and unreasonable because the contract, signed by all patients seeking care at Sanford, contains an "open price" term and is ambiguous. Sanford argues the contract contains no "open ...


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