Hospital Sued Over Debt Collection Practices

On Monday a class action against The Valley Hospital concerning alleged privacy violations was removed to New Jersey federal court The plaintiffs allege violations of the Health Insurance Portability and Accountability Act (HIPAA) during the debt collection process.

Hospitals use debt collection firms to pursue patients who have failed to pay remaining balances related to their medical treatment. These debt collections firms can pursue the debts in court, however they are bound in these pursuits by statutory requirements, including the HIPAA and the Fair Debt Collection Practices Act.

The complaint explained that CSW LLP, a defendant, filed suit against the plaintiff to collect a balance of $472.25. In addition to seeking the balance, the suit demanded: “interest, attorney’s fees, costs of suit, and for such other and further relief as the court may deem to be equitable and just.”

The plaintiff notes that under New Jersey law, statutory attorney’s fees are included in the costs of suit, so a separate request for attorneys fees is either a demand for contractual fees or an attempt to collect attorney’s fees twice over. The plaintiff also notes that prejudgment interest is only recoverable in certain tort actions. Finally, the plaintiff notes that the exhibits included with CSW LLP’s motion for summary judgment included insurance policy number information, which allegedly constitutes personally identifiable health information protected by HIPAA.

The plaintiff is bringing a class action for violation of HIPAA and violation of the FDCPA for misleading requests for damages. Plaintiff is represented by the Kim Law Firm LLC. Defendants are represented by Gordon Rees Scully Mansukhani