$2.5 million settlement; Class action leads to settlement over medical records fees

Action: Settlement

Date: Sept. 26, 2024

Date of incident: Oct. 1, 2019

Nature of claim: Violations of the North Carolina Debt Collections Act and North Carolina Medical Records Fee Act

Injuries alleged: Charging of fees for medical records above statutory limits

Amount: $2.5 million

Name of case: Davis v. MRO Corporation

Case number: Case No. 22-CVS-3672

Court: Durham County Superior Court

Name of judge: Michael O’Foghludha

Name of mediator: Thomas Duncan

Attorneys: Edward H. Maginnis and Karl S. Gwaltney, of Maginnis Howard, Raleigh (for the plaintiff); Michael Abbott and Jessica M. Heinz, of Cipriani & Wener, Philadelphia, and Pankaj K. “P.K.” Shere and Joshua Hiller, of Huff Powell & Bailey, Raleigh (for the defendant)

Defendant is hired by health care providers to process and provide medical records to patients, their authorized representatives, medical providers and other third parties upon request.

Plaintiff alleged that defendant did not abide by the requirements of the North Carolina Medical Record Fee Act by charging patients excessive amounts to obtain their medical records. Per-page charges are limited by the act to 75 cents for the first 25 pages, 50 cents for pages 26 through 100, and 25 cents above 100 pages.

The case was filed as a class action for all North Carolina patients who were charged or paid excessive fees.

Defendant’s counsel asserted a variety of defenses to the substance of the claim and the class action allegations. These included that the Medical Record Fee Act did not allow for a private right of action, that the North Carolina Debt Collection and North Carolina Unfair and Deceptive Trade Practices acts were not implicated, and that the “voluntary payment doctrine” barred any recovery.

Plaintiff moved for class certification on Dec. 29, 2023, on behalf of those subject to collection attempts for excessive fees and those who paid excessive fees.

After the hearing on class certification, the 2.1 judge took the matter under advisement.

During that time, the parties negotiated a settlement for the 6,858 class members. After paying attorneys’ fees, litigation expenses, notice expenses and a service award to the named class representative, each class member received a full refund of all unlawful fees and $205.89 in penalties per violation.