8th Circuit splits on fee for fruitless records search

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A split panel of the 8th U.S. Circuit Court of Appeals ruled that a hospital can still charge a fee to a lawyer seeking medical records even though its search came up empty.

The ruling could give ammunition to the defense in a class-action lawsuit pending in Jackson County Circuit Court seeking damages against health care providers that have charged such fees.

The federal case stemmed from a request that an attorney for plaintiff Brandon Graham sent to St. Mary’s Hospital seeking Graham’s health care records for a four-month period in 2017. CIOX Health, a Georgia-based company that fulfills medical-records requests for the hospital, sent a letter stating it found no such records. It also sent a bill for $24.85.

Graham filed a class-action lawsuit challenging CIOX’s practice as a violation of the Missouri Merchandising Practices Act. Section 191.227 of the Revised Statutes of Missouri allows medical providers to charge certain amounts for records, including a fee for “search and retrieval.” The lawsuit alleged that the statute required the provider to actually furnish a record before it could charge a fee.

The U.S. District Court for the Eastern District of Missouri, however, dismissed the suit. Judge Rodney W. Sippel noted that the statute also describes “search, retrieval, and copying fees,” indicating a separate fee could be charged for each.

A majority of the 8th Circuit panel agreed. In a March 12 opinion, Judges Jane Kelly and Michael J. Melloy wrote there was a “strong textual indication” that the legislature intended search fees and retrieval fees to be distinct.

“It would be unusual for the legislature to require health care providers to conduct a search whenever a written request for medical records is submitted . . . permit them to charge a ‘search’ fee . . . but condition their ability to charge that fee upon the happenstance of whether there are pre-existing records to be found,” Kelly wrote. “The plain language of the statute does not require this unusual result.”

The panel also agreed that CIOX’s letter informing the plaintiff that there were no health records was itself a type of health record. In 2018, lawmakers updated the statute to make that explicit.

Judge David R. Stras dissented. In his parsing of the statute, care providers could charge only a single fee for finding and providing documents. He pointed to a subjection that listed (1) search and retrieval, (2) postage and (3) notary fees as allowable charges.

“If this sounds like a list of three fees, it is,” Stras wrote. “Lists with four nouns and two conjunctions cannot contain four separate items. They necessarily include one compound item — here, search and retrieval — made up of more than one noun.”

Stras added that such an approach was sensible.

“Viewed from the perspective of consumers, this decision is not unusual at all,” he wrote. “As a consumer protection statute, one of its purposes seems to be to protect patients from overcharges. So if a patient requests something, but receives nothing, then it is not odd for the patient to pay nothing. Although this scheme may be unfair to CIOX, it is the result of how the Missouri General Assembly decided to balance the interests of patients and health care providers in the statute.”

The plaintiffs’ attorneys had asked the 8th Circuit to wait for a parallel suit to play out in Missouri’s courts, but the court declined. They argued that it didn’t make sense to have “piecemeal litigation” on an issue that no Missouri court has addressed previously. They also noted that a federal judge in the Southern District of Illinois recently dismissed a case that had brought similar claims against CIOX under Illinois, Georgia and Missouri law.

Jackson County Circuit Judge Patrick W. Campbell certified the state case as a class action last September. It is scheduled for trial in December.

Matt Dameron of Williams Dirks Dameron and William C. Kenney of the Bill Kenney Law Firm, who represent the plaintiffs in both the federal and the state class actions, couldn’t be reached for comment. Brian Fries of Lathrop GPM, an attorney for the defendants, also couldn’t be reached.

The 8th Circuit case is Graham v. CIOX Health LLC, 18-3467. The Jackson County case is Henderson v. Healthport Technologies, 1416-CV13765.