Suit over toenail bill from clinic can be class action

It began last year with Lori Mill's toenail — or rather, with Mill's $1,133 medical bill from Virginia Mason Medical Center for a 30-second office procedure on her toenail.

Mill complained about a $418 charge for "miscellaneous hospital charges." When Virginia Mason responded that it routinely adds such a "facilities charge" when patients go to its downtown clinic instead of its other clinics, she got a lawyer and sued.

This week, a King County Superior Court judge granted class-action status to her consumer-protection lawsuit, meaning she will represent all Virginia Mason patients whose bills have included such fees. That likely will encompass tens of thousands of patients, said Mill's attorney, John Phillips.

And that could potentially cost the medical center millions of dollars.

"There is an entire population of patients who have to pay a portion of their bills, and they were not treated fairly — and not told they would get excessive charges they don't get elsewhere," Phillips said.

Virginia Mason stands by its extra fee, arguing that the downtown facility is licensed as a hospital so it is authorized by Medicare to charge more. The medical center says that is standard industry practice.

Judge Greg Canova, in authorizing the class action, said the overriding questions in the case are whether Virginia Mason had "unfairly or deceptively" charged patients at the downtown clinic more than they would have been charged at other clinics, and whether the medical center had failed to disclose that to patients.

Phillips has obtained internal Virginia Mason e-mail from the medical center's own doctors and staff complaining about the charges.

One doctor, whose name was omitted from the e-mail, had a procedure on his own toe at the downtown clinic and then e-mailed Virginia Mason's CEO, Dr. Gary Kaplan, after he got the bill last year. The total bill was $1,200, the doctor wrote. And $1,138 of that was the facilities charge.

"I call it obscene," the doctor wrote Kaplan. "There has to be some sense of appropriateness/fairness/reasonableness to our charges."

Another doctor, dermatologist Allan Kayne, complained about a $1,361 bill sent to one of his patients. More than half — $754 — was a facilities fee. "These charges are not only excessive, but an embarrassment to me and the medical center," Kayne wrote.

The trial has been preliminarily set for July 3. If Virginia Mason loses the suit, the state Consumer Protection Act allows triple damages up to $10,000 for each patient in the class. Each patient in the class then would be contacted and asked for documentation of their Virginia Mason bills.

Carol M. Ostrom: 206-464-2249