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Julian v. The University Of North Carolina Health Care System

Court of Appeals of North Carolina

March 19, 2019

ALEXANDER JULIAN, III, individually and on behalf of all others similarly situated, Plaintiff,
v.
THE UNIVERSITY OF NORTH CAROLINA HEALTH CARE SYSTEM, d/b/a THE UNIVERSITY OF NORTH CAROLINA HOSPITALS, Defendant.

          Heard in the Court of Appeals 28 November 2018.

          Appeal by plaintiff from order entered 28 November 2017 by Judge Michael J. O'Foghludha in Orange County No. 16 CVS 001206 Superior Court.

          Lewis & Roberts, PLLC, by Matthew D. Quinn and James A. Roberts, III, for plaintiff-appellant.

          Attorney General Joshua H. Stein, by Assistant Attorney General Derek L. Hunter, for defendant-appellee.

          DIETZ, JUDGE.

         Alexander Julian brought this class action lawsuit against the University of North Carolina Health Care System after a visit to one of the system's hospitals. The hospital charges for operating room time in half-hour increments. Julian alleges that this billing practice permits the hospital to overcharge patients-Julian, for example, was in the operating room for approximately two hours and four minutes but the hospital billed him for two and a half hours of operating room time. This, Julian claims, is a breach of the contract between the hospital and its patients.

         The trial court dismissed Julian's complaint under Rule 12(b)(6) for failure to state a claim on which relief can be granted. As explained below, we affirm that ruling. Julian asserts that N.C. Gen. Stat. § 131E-273-a statute he believes is incorporated by law into his contract with the hospital-bars healthcare providers from charging for a "component of any health care procedure that was not performed or supplied." Julian contends that the hospital violated this statute by charging him for time when he was not actually in the operating room.

         But even assuming that this statute is part of the contract and means what Julian claims (the hospital disputes both these points), the "component" of a healthcare procedure at issue here is a half-hour block of operating room time. The hospital supplied that component to Julian, although he did not use it in full. This is no different from charging a patient for a bag of solution used in an intravenous fluid drip even though the patient does not use every drop of fluid in the bag. The plain language of N.C. Gen. Stat. § 131E-273 permits a hospital to bill for these types of components of a procedure even if they are only partially used.

         Julian's express contract claim fails for a similar reason: the terms of the contract state that operating room time is billed in "half hour increments" even if only a portion of that final half hour block is used. This means the hospital billed Julian precisely as the contract required. Accordingly, Julian's claims fail as a matter of law and the trial court properly dismissed them under Rule 12(b)(6).

         Facts and Procedural History

         On 17 October 2014, Alexander Julian, III arrived at the UNC Ambulatory Surgery Center in Chapel Hill for outpatient surgery. Before beginning his surgery, Julian entered into a contract with the hospital. Julian concedes that this contract included a document that the parties refer to as the "O.R. Charge Rules," although Julian did not receive a copy of that particular document before his surgery. The O.R. Charge Rules establish the rates the hospital will charge for operating room services. The rules state that the hospital charges patients for operating room time "based on half hour increments with time measured from the time the patient enters the room until the patient leaves the room." The charge rules also state that "[i]f the procedure goes into the next time increment, the charge is for the next increment of time."

         In January 2015, Julian received a non-itemized bill from the hospital for his surgery. The bill was much higher than Julian expected, so he contacted the hospital for additional information. In February 2015, the hospital sent Julian a letter explaining that his total operating room time was "2 hours and 4 minutes" and "OR time is charged in 30 minutes [sic] increments, making 2 hours and 4 minutes fall between the OR time charge of 2:01 to 2:30 hours." Although Julian concedes in this lawsuit that he agreed to be bound by the terms of the O.R. Charge Rules when he signed the contract with the hospital, the parties also acknowledge that Julian did not receive a copy of the O.R. Charge Rules when he signed the contract and agreed to be bound by its terms. As a result, when Julian received this response from the hospital, it was the first time Julian learned that the hospital billed for operating room time in half-hour increments.

         In 2016, Julian filed a putative class action against the University of North Carolina Health Care System, alleging claims for breach of contract, breach of implied-in-fact contract, and breach of the implied covenant of good faith and fair dealing. The complaint also requested a declaratory judgment and injunctive relief. The hospital moved to dismiss the complaint under Rules 12(b)(1), (2), and (6) of the North Carolina Rules of Civil Procedure. After a hearing, the trial court granted the ...


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