Are hospitals profiting from charging their patients for medical records?

For those of you who think that hospitals are overcharging for copies of medical records, this case is for you. The Court of Appeals finds that plaintiffs have a claim against medical providers and a copy service who allegedly broke the law in charging too much for medical records that they needed in litigation.

The case is Carter v. Healthport Technologies, decided on May 10. Under state law, hospitals cannot profit from the photocopies. But the complaint alleges that "the fees charged by HealthPort and paid by plaintiffs substantially exceeded the cost to produce the requested medical records and included 'built in kickbacks from HealthPort to the respective Hospitals." HealthPort is the firm that coordinates with the hospitals to make these copies. When plaintiffs requested the records, they were charged 75 cents per page along with a 2 dollar fee for electronic delivery. What I love about this case is that plaintiffs have cited what appears to be smoking gun evidence that the defendants are in fact profiting from these photocopies, suggesting that the hospitals are not only in the business of providing medical services. They are also in the photocopying business. The Second Circuit says:

To support this allegation, plaintiffs attached to the Complaint printouts of two advertisements on HealthPort's website offering "hospitals and large clinics" a "shared release of information (ROI)" or "ROI Partner" service, for responding to requests for medical records.

One advertisement stated to offerees, "[w]ith HealthPort ROI Partner, you will gain significant cash flow from the ROI process . . . ."

The other advertisement proffered testimonials from users of HealthPort's ROI services:

Just ask--our clients will tell you that our release of information services . . . will . . . boost revenue. Thus, HealthPort quoted a Florida hospital's Administrative Director of Health Information Management, who wrote, inter alia, "We decided to go with" HealthPort's "ROI Partner" service; "[n]ow we're a revenue generating department."

The district court dismissed the case on standing grounds, that is, the plaintiffs themselves did not request the medical records. Instead, their attorneys requested the records. Since the attorneys are not the plaintiffs, the plaintiffs lack standing to bring the case. The Court of Appeals (Kearse, Walker and  Cabranes) sees it differently. Under established case law, lawyers are the agents for their clients. If the lawyers requested copies of their clients' medical records, then they acted on their clients' behalf. So the plaintiffs really are the legitimate plaintiffs, and this case can proceed, and defendants are going to have to explain away the above evidence that suggests the hospitals are turning a profit from these copies.