Collection Efforts for Medical Care

Judge David Langham

On February 12, 2021, the Eleventh Circuit Court of Appeals rendered an affirmance in Kottler v. Gulf Coast Collection Bureau, Inc., No. 20-12239; D.C. Docket No. 0:19-cv-61190-BB. The underlying case was filed in the U.S. District Court for the Southern District of Florida. That tribunal entered a summary judgement in favor of the plaintiff, and the collection bureau sought review.

The plaintiff, Ms. Kottler was injured when shelves fell upon her in February 2018, according to the initial petition filed in the workers’ compensation case, 18-005010. As is typical in a work accident, medical care was provided to Ms. Kottler. The statutory framework for Florida workers’ compensation medical care has changed various times over the last 86 years, but the general premise remains that medical care is the employer’s responsibility.

For whatever reason, some portion of the bills for Ms. Kottler’s medical care were not timely paid. One of the medical care providers referred the balance due to Gulf Coast Collection Bureau, Inc. There was no dispute that Gulf Coast then sent Ms. Kottler a letter regarding the debt and its efforts to collect the money. According to the Court:

“Gulf Coast demanded that Kottler pay her medical bills, but in Florida an ’employee is not liable for payment for medical treatment or services provided,’ Fla. Stat. § 440.13(13)(g), and ‘[a] health care provider may not collect or receive a fee from an injured employee,’ id. § 440.13(13)(a). Instead, ‘[s]uch providers have recourse against the employer or carrier for payment for [medical] services rendered . . . .’ Id.”

This prohibition on collection actions against injured workers was not in the 1935 statute, but has been integral to the Florida Workers’ Compensation Law for decades.

In 1983, the legislature made its first effort regarding the protection of employees in this regard, adding to section 440.13(3):

“The healthcare provider or health care facility providing services pursuant to this section shall be paid for the services solely by the employer or its insurance carrier, except for payments from third parties who have been determined to be liable for such payment.”

In 1990, the Legislature added clarifying language to this:

“Subject to the provisions of paragraph (2)(d), the employee is not liable for payment for treatment or services provided pursuant to this section.”

Thus for at least thirty years (1990) and arguably longer (1983), the injured worker in a Florida workers’ compensation case is not liable for the cost of medical care provided under the workers’ compensation law.

Despite this long-standing prohibition, it has not been uncommon for injured workers to receive such billing. There are a multitude of reasons. First, it must be remembered that human beings are imperfect and make errors. Second, there are likely many injured workers who neither (1) know of this prohibition, nor (2) are comfortable reacting to such a billing to inform a medical provider. Third, the collection efforts regarding such bills are more likely to be pursued by an agent (collection company) of the medical practice than by the medical practice itself, and the agent’s information may be less than ideal.

The Court in Kottler explained that the Fair Debt Collections Practices Act (FDCPA) does not allow a “debt collector” to make “false representation(s) of the character, amount, or legal status of any debt.” The definition of “false,” should one escape our collective agreement is “if an unsophisticated or naïve consumer would be deceived by the statement of the debt collector.” The collector may be required to pay damages for improper or untoward collection efforts even if it can demonstrate its actions (the “violation(s)”) “are not knowing or intentional.”

As explained by the Court in Kottler, Gulf Coast sent Ms. Kottler “a validation notice” regarding charges for medical care related to her work accident. Gulf Coast thus sought to characterize this letter in an attempt to “verify, not to collect a debt.” However, the Court noted that “undisputed evidence established” this was “a dunning letter.” It stated the “account . . . had been listed for collection,” and that “[t]his is an attempt to collect a debt.” The Court concluded that this “validation” unequivocally “conveyed that Ms. Kottler was responsible for and overdue in paying outstanding medical bills.” The Court concluded:

“Any consumer in Florida unfamiliar with its worker’s compensation laws who received the letter Kottler received would be misled to think that she was obligated to remit payment for medical bills that were owed by her employer.”

Second, Gulf Coast argued that the letter it sent was “attributable to a bona fide error,” and thus should therefore be insufficient to render it liable (the lack of intent, a simple mistake). The Court explained this is “a bona fide error defense.” To avoid liability on this basis, the debt collector must demonstrate the mistake “occurred despite the maintenance of procedures reasonably adapted to avoid any such error.” That is collector (agent) procedures, not the referring medical provider’s procedures.

The Court explained that a debt collector must

“’actually employ[] or implement[] . . . procedures to avoid errors,’ and then ensure those procedures were ‘reasonably adapted to avoid the specific error at issue.’”

It concluded that Gulf Coast’s were not “reasonably tailored to identify a debt covered by the worker’s compensation law.” Instead, the collector merely “relied on its clients to provide data that identified possible worker’s compensation coverage.” The evidence supported that “Gulf Coast used no additional screening procedures to detect if a debt was subject to worker’s compensation.” Thus, it inappropriately “relegated “its oversight task to its creditor[s]” and “was not entitled to avoid liability for a bona fide error.”

Finally, Gulf Coast argued “that Kottler suffered no concrete injury to give her standing to sue.” The Court explained that “injury in fact” is required for standing, consisting of four elements: (1) “the injury must invade a legally protected interest and be (2) concrete, (3) particularized, and (4) imminent.” Thus, the allegations of false statements in the letter and phone calls, Ms. Kottler’s testimony regarding her reactions to these communications, and her resulting fears, were collectively sufficient to afford her standing under the applicable requirements. Stated differently, “Kottler was entitled to avoid communication concerning (debt) collection . . . she expended time addressing unwarranted collection calls . . ., and those calls upset her.”

As an aside, the Court addressed the process of summary judgment. The process for this tool is set forth in the various rules of court, and may differ from jurisdiction to jurisdiction. Recently, the Florida Supreme Court announced that the Florida process will soon (perhaps May or June) be interpreted more similarly to the process in federal courts. The Eleventh Circuit’s explanation of summary judgement is therefore of pertinence to Floridians, as the state transitions to the analysis explained.

The Kottler Court explained summary judgement:

“is appropriate when there exists no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a).”

It affirmed the conclusion of the District Court granting summary judgement in favor of Ms. Kottler. The reader should take from this:

(1) injured workers should not be subject to collection efforts regarding treatment for workers’ compensation injuries.

(2) whether such billing is or is not appropriate may depend upon whether a claimed injury is or is not deemed compensable.

(3) those who collect such debts should take independent steps to verify whether billed treatment was for such a compensable workers’ compensation injury.

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