Summary Judgment Granted In Overcharging Class Action

The Legal Intelligencer
Wednesday, June 15, 2005
By Asher Hawkins

A Philadelphia judge has granted summary judgment to a class of plaintiffs - many of them attorneys - who claim that a company that retrieves records from Pennsylvania hospitals charged them rates in excess of the maximums permissible under Pennsylvania's Medical Records Act.

The amount of any damages that will be available to the class members has yet to be determined.

In Liss & Marion P.C. v. Recordex Acquisition Corp., according to previous court opinions in the matter, both sides agreed that Recordex - which provides records from numerous Philadelphia hospitals - would obtain records from hospitals electronically and then charge the maximum rate permitted under the Medical Records Act for copies from microfilm, as opposed to the lower maximum rate for paper copies.

In a two-page order filed late last week, Judge Mark I. Bernstein ruled in favor of the plaintiffs' summary judgment motion, and ordered that a full accounting of the overcharges be made at Recordex's expense.

Class counsel in Liss & Marion were Alan Feldman and Thomas More Marrone of Feldman Shepherd Wohlgelernter Tanner & Weinstock.

Feldman said an initial accounting of the roughly 10,000 invoices involved in the matter indicate that members of the class paid at least $1.2 million in overcharges. The accounting is being done by RSM McGladrey Inc., a Bloomington, Minn.-based business-consulting group that has performed other administrative services related to the Liss & Marion class action.

Recordex's attorney, Don Foster of Klehr Harrison Harvey Branzburg & Ellers, said there is "a very significant difference of opinion between the two parties" as to the amount of money at issue.

Foster said his client is considering its appellate options, but declined to comment further until a written opinion is made available.

The Medical Records Act, which took effect in 1998, sets maximum per-page medical records copy rates for both paper and microfilm copies, according to Bernstein's July 2004 decision certifying as a class a group of attorneys and firms who sought documents from Recordex on behalf of clients.

In certifying as a class the attorney-plaintiffs, Bernstein had declined to grant class status to the group of personal injury plaintiffs for whom the attorneys had sought the records in question.

In last week's order, Bernstein gave Recordex 30 days to give the class plaintiffs a computerized list containing the names of the class members who requested documents, the people for whom those documents were requested and the number of nonmicrofilm pages produced yet charged at microfilm rates.

Most of the class members are attorneys, Feldman said. His firm believes that it, too, has been overcharged by Recordex in the past, but under the terms of Bernstein's July 2004 certification order, Feldman Shepherd has been excluded from the class.

However, the firm's alleged experience during the handling of one of its cases offers an example of the type of overcharging the lawyer-plaintiffs in Liss & Marion feel they may have experienced.

In 2002, class co-counsel Marrone said, a wrongful death case Feldman Shepherd worked on generated 113 pages of medical records copies. The firm was charged $183.06 under the microfilm rate. Under the paper copy rate for that year (the rates under the Medical Records Act are adjusted for inflation), the firm would have owed Recordex $69.44, according to Marrone.

The numbers aren't staggering at the individual case level, Feldman acknowledges, but he contends that they do add up in the long run. He said he tried to set up settlement talks with Recordex, but was rebuffed.

"In my view, at least, the case should have been settled," Feldman said.

Foster said no demand was ever made by the plaintiffs, and that Recordex was willing to discuss a settlement as soon as either side was able to quantify the damages at issue.

Feldman said he believes Bernstein's certification of the Liss & Marion class contributed to Recordex's changing its billing practices. Foster said the company's billing practices did change after the lawsuit was brought, but argued that that was not done "in response to any concern of liability."