In the recent case of Pagnani-Braga-Kimmel Urologic Assoc., P.A. v. Chappell, Atlantic County Superior Court Judge Joseph E. Kane was presented with an interesting issue: should a patient be required to pay a surgeon out of pocket when the patient was assured by the hospital where the surgeon performed the surgery that her insurance would be accepted. Defendant Lynne Chappell was diagnosed with a kidney infection and referred to Shore Memorial Hospital for surgery. When she arrived at Shore Memorial, Ms. Chappell asked hospital staff whether the hospital would accept her insurance. Ms. Chappell was assured that Shore Memorial was an “in-network” service provider under her insurance policy, and would therefore accept her insurance.
Plaintiff performed a successful surgery on Ms. Chappell. Shortly after the surgery, Ms. Chappell returned to the surgeon for a follow-up, at which time she learned that plaintiff did not accept her insurance plan. Ms. Chappell immediately cancelled her appointment and made an appointment with another doctor who would accept her insurance. Afterwards, Ms. Chappell also received a bill from the surgeon seeking payment for the surgery that he performed at Shore Memorial. At no time prior to the surgery did either the hospital or the surgeon inform Ms. Chappell that the surgeon was not an employee of the hospital or that the surgeon might not accept Ms. Chappell’s insurance.
The plaintiff brought this lawsuit against Ms. Chappell seeking payment for the surgery that he had performed. The first argument advanced by plaintiff is that he was entitled to payment under the equitable doctrine of quantum meruit. Under this doctrine, even in the absence of a valid contract, there is an assumption that anyone who provides a service to another does so with the expectation that he will be compensated; therefore, where no valid contract is found to exist, he can recover the reasonable value of the service provided. If the service-provider is not compensated, then the person who received the benefit of the service has been unjustly enriched.
In the present case, while the Court agreed that the doctrine of quantum meruit applies, the Court found that Shore Memorial also received a benefit from the service provided by the plaintiff. Shore Memorial was required to treat Ms. Chappell, regardless of who performed the surgery because, under New Jersey law, hospitals have a duty to accept and treat all patients. Therefore, Shore Memorial’s obligation to provide treatment was discharged by the surgeon. Since Shore Memorial was in a better position to absorb the cost of the surgery than Ms. Chappell, the Court held that any remedy for compensation under the doctrine of quantum meruit to the surgeon should come from Shore Memorial.
With respect to the issue of whether a contract was ever formed between plaintiff and Ms. Chappell, the Court found that there was no mutual assent between Ms. Chappell and the surgeon, and therefore, no contract. Mutual assent is a requirement for the formation of a contract. In other words, the parties to the transaction must have a “meeting of the minds” between them where they agree to all of the material terms of the contract. Here, Ms. Chappell’s agreement to accept services from Shore Memorial was conditioned on their promise to accept her insurance. Ms. Chappell never expressed any assent to receiving a bill from anyone other than Shore Memorial. Since there was no other contract between the parties that would obligate Ms. Chappell to pay a surgeon separately for the surgery, the Court held that Ms. Chappell was not obligated to pay the surgeon out-of-pocket. Of course, the surgeon is free to seek compensation directly from Shore Memorial.
It would be prudent for hospitals to fully inform patients of all of the ramifications of the hospital’s relationship with the doctors and surgeons who work for the hospital. While doctors and surgeons have a right to payment for their services, it is unfair to expect out-of-pocket payment from a patient who was lead to believe that all hospital services would be covered under an applicable insurance policy. For assistance in any contract dispute, contact a New Jersey contract litigation lawyer for a consultation.