By Fredrick P. Niemann, Esq. a New Jersey Consumer Fraud Lawyer
The question whether a hospital’s admissions contract and collection methods violated the New Jersey Consumer Fraud Act (CFA) was addressed. The federal court examined New Jersey’s learned professional exception to determine if collection efforts by a hospital are “services” and thereby excluded from prosecution under CFA. The plaintiff patient was indigent, had no health insurance and did not qualify for Medicare or Medicaid. At the time of his admission, he signed a contract guaranteeing payment of unspecified charges that read, in relevant part, “I also guarantee payment of all charges and collection costs for services rendered….” The defendant billed the plaintiff for the services rendered, in accordance with the hospital’s index of prices for services, supplies, and medications. Alleging that the agreement was unconscionable and the charges excessive, unfair and unreasonable, the plaintiff brought suit against the defendants claiming, among other things, violation of the CFA.
New Jersey courts have held that the services rendered by most professionals are not covered by the Consumer Fraud Act. The Third Circuit concluded that the defendant hospital’s billing practices were part of the professional services exception to the CFA and such practices were not unconscionable. Although we are not bound by the opinions of lower federal courts, including the Circuit Court of Appeals, New Jersey courts, nonetheless, find after the opinion rendered.
Here, defendant was entitled to seek payment for the outstanding debt from plaintiff, the responsible party, as authorized by federal and state law.
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