Hospitals and health systems are familiar with traditional medical malpractice cases, but as healthcare is increasingly seen as a business, healthcare providers need to understand the potential for, and limitations of claims brought under the guise of consumer protection laws. 

Consumer protection laws can be tempting causes of action for individuals who believe they have been wronged by the healthcare system. Unlike medical malpractice claims, which require expert testimony and may include damages caps, consumer protection statutes often include treble damages, punitive damages, and attorneys’ fees. Consumer protection laws may also offer injunctive relief as a remedy, do not require a plaintiff to prove causation or damages, and have the potential for class action lawsuits. To prevent plaintiffs from reframing a negligence case to sidestep the limitations of medical malpractice cases, some courts and states have drawn boundaries between consumer protection and medical malpractice cases.

While each state has its own consumer protection laws, the statutes generally prohibit unlawful business or trade practices, which can be broadly defined. For example, Oregon’s Unlawful Trade Practices Act lists over 80 separate ways to violate the statute, including the use of “deceptive representations” in connection with a service or making false or misleading representations about the price of a service.^[1] Other states, such as Texas, prohibit “unconscionable” actions, which includes taking advantage of “the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree.”^[2]

Healthcare services are not traditionally viewed through a consumer protection lens but nevertheless pose a high risk for this type of claim. Patients necessarily rely on the specific knowledge, ability, and experience of a provider. Advertising and marketing by healthcare providers is ubiquitous. Moreover, the care is often removed or distant from the marketing and billing for the service. Traditionally, “learned professions” such as “practitioners of the healing arts” were not considered a “trade” subject to consumer protection laws.^[3] Today, no such clear limitation exists. 

Many courts have clarified that hospitals and healthcare providers are subject to the same consumer protection laws as any other business, but some guardrails still exist. Some states and courts have restricted the types of cases that may be brought against healthcare providers under the guise of consumer protection laws. Several states have statutes that expressly prohibit claims under the state consumer protection act if the case alleges personal injury resulting from negligence.^[4] To determine whether the case alleges an injury resulting from negligence, Texas courts look to whether the cause of action refers to an applicable standard of care. In one case, a plaintiff alleged that the physician engaged in an unconscionable course of action when she went to a mental health facility seeking advice related to her medication but was then admitted without consent and not permitted to leave the facility.^[5] Because the plaintiff’s claim was premised on an alleged departure from accepted standards of care relating to involuntary commitment, the claim sounded in negligence and could not be brought under the consumer protection act.^[6]

Even where there is no statute precluding negligence-based claims, some courts look for a nexus between the claims at issue and the entrepreneurial or business aspect of practicing medicine.^[7] The Appeals Court of Massachusetts applied consumer protection law to a class action case related to overcharging for medical records, noting that the service was an entrepreneurial element of the practice.^[8] Others, such as the Kentucky Court of Appeals^[9] or the Supreme Court of Montana^[10] have declined to apply consumer protection laws to cases where there was no connection between the care and any improper financial relationship or incentive or where there was no connection to the entrepreneurial, commercial, or business aspects of running a medical practice.

Other courts have refused altogether to require a nexus between the care provided and the entrepreneurial aspect of medicine. The District of Columbia Court of Appeals rejected any such requirement, noting “concern that the line between [consumer protection law] claims and traditional medical malpractice claims will be blurred appears to be overstated.”^[11] Similarly, the Western District of Pennsylvania noted that consumer protection law is to be “construed liberally,” and neither intent nor actual deception are required.^[12] 

Whether consumer protection laws will apply to a potential claim is a fact-intensive question that necessarily relies on state law. The broad spectrum of available damages, potential for class action, attorneys’ fee entitlement, and possibility of injunctive relief make consumer protection claims particularly disruptive for providers. Courts across the country have been skeptical of medical malpractice cases filed under the guise of consumer protection cases, but skepticism may be eroding as case law develops and marketing by providers increases.

Healthcare entities and providers alike need to be on the lookout for potential consumer protection risks. Entities should be aware of the potential application of consumer protection law in their jurisdiction and consider proactive strategies, such as evaluating marketing statements and educating providers about consumer protection pitfalls.

ENDNOTES

[1] ORS § 646.608.

[2] 2 Texas Business and Commerce Code § 17.45(5)

[3] Frankeny v. District Hospital Partners, LP, 225 A.3d 999, 1005 (2020) (analyzing the District of Columbia Consumer Protection Procedures Amendment Act).

[4] See, e.g., Texas Medical Liability Act (TMLA), Texas Civil Practices and Remedies Code § 74.004(a). See also Kansas Consumer Protection Act, Ks. St. 50-635(b).

[5] Loya v. Hickory Trail Hospital, L.P., 673 S.W.3d 1, 8-10 (2022).

[6] Id. at 10.

[7] See, e.g., Beauchesne v. New England Neurological Associates, P.C., 159 N.E. 3d 728 (2020).

[8] Id. at 729.

[9] Barnett v. Mercy Health Partners-Lourdes, Inc., 233 S.W.3d 723 (2007).

[10] Hastie v. Alpine Orthopedics & Sports Medicine, 363 P.3d 435 (2015).

[11] Frankeny, 225 A.3d at 1007 (noting that a medical malpractice claim has entirely different elements and uses different types of evidence, making potential crossover unlikely). 

[12] Schiff v. Hurwitz, No. 12cv0264, 2012 WL 1971320, at *4 (W.D. Pa, June 1, 2012) (applying Pennsylvania’s Consumer Protection law to a claim against an institutional review board where the board did not consider the risk of injury and approved a medical device despite the fact that the Food and Drug Administration was neither aware of nor approved of the use of the device).