Judge hears arguments in Ridgeline Medical v. David Lyon appeal, which questions Idaho Patient Act
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IDAHO FALLS — Seventh District Court Judge Bruce Pickett heard arguments Thursday in the appeal of Ridgeline Medical LLC v. David Lyon.
The appeal is the latest in a legal saga that stretches back to its filing on Aug. 4, 2021.
The case revolves around the constitutionality of the Idaho Patient Act after a Bonneville County resident, David Lyon, failed to pay a $777 bill to Ridgeline Medical in Idaho Falls for treatment he received on March 2, 2021.
Court documents indicate Lyon was sent a final statement, but the plaintiff and the defendant agree he never received the notification, as required by the law.
READ OUR IN-DEPTH STORY ABOUT THE CASE AND LAWSUIT HERE
Two months later, the law firm Smith Driscoll & Associates was hired to collect Lyon’s debts, EastIdahoNews.com reported previously. When he did not respond to demand letters, he was sued on Aug. 4.
He then hired Dindinger & Kohler, a firm from Boise, to “file a counterclaim against Ridgeline, seeking to … fine the clinic for filing its lawsuit and reporting Lyon to a credit agency before he had received his final statement.”
Initially, Magistrate Judge Jason Walker ruled three portions of the act unconstitutional, but the Idaho Attorney General’s office intervened at the request of Melaleuca, which played a significant role in passing the Idaho Patient Act.
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The Attorney General’s Office, under then-Attorney General Lawrence Wasden, argued Smith Driscoll & Associates should have notified it because the case was challenging the constitutionality of a state law.
Walker ultimately reversed his decision on Aug. 11, 2023, declaring the Idaho Patient Act constitutional.
On Sept. 22, Walker awarded the defendant David Lyon $3,000 in damages against Ridgeline Medical for violations of the Idaho Patient Act.
Bryan Smith with Smith Driscoll & Associates, representing Ridgeline Medical, appealed that judgment, and presented arguments on Thursday.
The text of the law states, the act “shall govern fair collection of debts owed to health care providers (and) provide(s) requirements for extraordinary collection actions when collecting medical debts.”
It stipulates that after a patient goes to a health care facility, “all charges will be sent to the patient’s insurance within 45 days. By 60 days, they will issue a Consolidated Summary of Services that includes all the various providers who treated the individual,” states Idahopatientact.org. “Sixty days after the final statement, the account can be transferred to a collection company or charged interest. Ninety days after the final statement, extraordinary collection can be taken, such as a lawsuit or a negative credit report.”
The law was adopted in March 2020 because previously “Idaho law enable(d) excessive attorney’s fees and fail(ed) to provide judges with clear guidance to combat abuses of the collections process.”
During his argument, Smith argued the law was an example of broad governmental overreach.
“Idaho Patient Act uses like we say, a hand grenade to kill a fly instead of using a scalpel,” Smith said.
The defendant’s lawyer Edward Dindinger countered the law lays out constitutional guidelines to regulate the medical debt practice.
“As the court’s aware, in 2020, the Idaho Legislature determined that medical billing practices have little visibility to Idaho citizens, and that consumers often find themselves in collection actions for debts they were unaware of from health care providers who they do not recognize,” Dindinger said. “So as such, in enacting the Idaho Patient Act, the Legislature merely set forth certain reasonable requirements, which must be met before engaging in certain activities relating to the collection of medical debt.”
Smith began his opening arguments Thursday saying the Idaho Patient Act “burdens petitioning activity.”
“There’s no dispute that your right to file a petition with the government, which includes filing a complaint, is a fundamental right found in the First Amendment to the United States Constitution,” he said.
He said that a health care provider cannot file a petition until they have met the requirements of the Idaho Patient Act.
Smith also argued the act burdens freedom of speech.
“It’s clearly free speech to report something to credit. You’re just saying somebody owes money,” he said.
Finally, he concluded that the law violates equal protection.
“We understand that medical creditors are not a suspect class,” he said. “The Idaho Patient Act creates a legislative classification that impermissibly interferes with those fundamental rights, and that’s why it also violates equal protection.”
On the other side, Dindinger argued for the constitutionality of the the law as upheld by the magistrate court: “I’ll first address Ridgeline’s argument that the Idaho Patient Act impermissibly burdens the First Amendment right to petition. The Idaho Patient Act again only imposes reasonable preconditions upon the ability to petition the courts. It does not prohibit the same.”
He cited statutes of limitations in medicine, prelitigation screening processes required to bring a medical malpractice claim, and the Idaho Tort Claim Act that requires a claim be “presented and filed with a governmental entity within the prescribed time period before an action can be initiated,” as examples of similar “constitutional cooling off periods” required by the law.
Additionally, he countered Smith’s free speech arguments stating, “Commercial speech is not just speech proposing a commercial transaction, but it’s also expression related solely to the economic interests of the speaker and its audience.
“The purpose of the Idaho Patient Act’s restriction on reporting adverse information is to prevent consumers from having potentially inaccurate and or premature reports made against their credit.”
He said, “Even fundamental rights … are subject to reasonable, nondiscriminatory restrictions.”
Lead Deputy Attorney General Brian Church then spoke on behalf of the state of Idaho.
“The right to petition here is not even implicated,” he said citing injured worker claims that use an entirely different system.
“What the purpose of this act is trying to prevent is kind of misleading speech in the sense that the Legislature has determined that if a party or a health care provider is going to engage in collection action, it can only do that in courts once the pre-suit requirements have been met,” Church said. “Promoting fair debt collection practices — including preventing information on debts that are not legally collectible through the court system from being reported to credit agencies before adequate notice is given — is a substantial interest of the government here.”
In his rebuttal, Smith argued that a health care professional could send a notice or bill via mail, but if the recipient gave a bad address, didn’t look at their mailbox, moved, divorced or the letter was lost in transit, then the doctor could not pursue payment through the courts for his or her services.
“Under this law, you do not know whether or not you can follow the statute and still not know whether the patient actually received the notice,” Smith said.
Melaleuca submitted an amicus briefing in the case, which the judge accepted. He did not allow the company’s lawyer to participate in arguments during the case.
The hearing adjourned as Pickett took the case under advisement, meaning that he will issue a ruling at a later time.