ALICE M. BATCHELDER, Circuit Judge.
Appellants and purported class plaintiffs, Keith Raymond and Timothy Strunk, were injured in separate accidents and were both treated by Appellee Mercy Health. Even though Raymond and Strunk have health insurance, Mercy Health did not submit their medical bills to their respective health insurance carriers. Instead, Mercy Health and its debt collector, Appellee Avectus Healthcare Solutions, sought payment from any tort settlement or award Raymond and Strunk would receive. The district court determined that this conduct did not violate Ohio Revised Code § 1751.60. Because we disagree, we REVERSE and REMAND for further proceedings not inconsistent with this opinion.
In February 2015, Raymond was injured in a slip-and-fall accident, and he received medical treatment at Mercy Health Anderson Hospital. In June 2013, Strunk was injured in a car accident, and he received medical treatment at Mercy Health Clermont Hospital. Raymond and Strunk both have health insurance, and each of their health insurance carriers has an agreement with Mercy Health for the provision of services.
Instead, Avectus, on behalf of Mercy Health, sent letters
These letters, Raymond and Strunk assert, demonstrate that Mercy Health and Avectus sought compensation from them for their medical expenses, in violation of Ohio Revised Code § 1751.60. Raymond and Strunk filed suit in the U.S. District Court for the Southern District of Ohio, alleging eight claims, each of which the parties agree depends on Mercy Health and Avectus's violation of § 1751.60. The district court dismissed the complaint for failure to state a claim, finding that § 1751.60 did not apply and Mercy Health and Avectus did not violate the statute. This timely appeal followed.
"We review de novo a district court's decision to grant a motion to dismiss for failure to state a claim under Rule 12(b)(6)." Jackson v. Ford Motor Co., 842 F.3d 902, 906 (6th Cir. 2016) (citation omitted). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). "The defendant has the burden of showing that the plaintiff has failed to state a claim for relief." Directv, Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007).
The sole issue on appeal is whether Mercy Health and Avectus's conduct is prohibited by Ohio Revised Code § 1751.60(A).
Ohio Rev. Code Ann. § 1751.60(A).
The Ohio Supreme Court has held that this section "governs providers or health-care facilities, health-insuring corporations, and a health-insuring corporation's insured." King v. ProMedica Health Sys., Inc., 955 N.E.2d 348, 350 (Ohio 2011). The statute
That is precisely the circumstance we are presented with in this case. Raymond and Strunk allege that they are insured and that the healthcare provider, Mercy Health, has a contract for services with their respective health-insurance providers. Raymond and Strunk further allege that Mercy Health, through Avectus, by requesting that Raymond's and Strunk's attorneys "withhold and pay directly to Mercy Health  the balance of any unpaid charges owed" by Raymond and Strunk, "collect[ed] and attempt[ed] to collect monies directly from patients" for healthcare services. Mercy Health and Avectus thus sought payment "from a health-insuring corporation's insured" while in a healthcare services contract with Raymond's and Strunk's health-insurance providers. See King, 955 N.E.2d at 351. Therefore, not only does § 1751.60 apply, but according to the allegations in the complaint, Mercy Health and Avectus's conduct violated the statute.
Mercy Health and Avectus assert that they did not seek compensation from Raymond and Strunk, but attempted to collect the medical bills from the responsible third party. They argue that their conduct is comparable to that of the healthcare providers in King and Hayberg. But the conduct of Mercy Health and Avectus in this case is markedly different from that of the healthcare providers in King and Hayberg. In both of those cases, the healthcare providers sought and received payment from
Nonetheless, Mercy Health and Avectus assert that payment of the medical bills from a tort settlement or judgment is effectively payment by a third party. Mercy Health and Avectus are incorrect. First, money paid by the tortfeasor to Raymond and Strunk through settlement or judgment in a tort action belongs to Raymond and Strunk.
Second, Avectus and Mercy Health's reliance on King and Hayberg in support of their argument that payment from a tort settlement or judgment is effectively payment by a third party is misplaced. Those courts were both presented with the argument that the medical-benefits insurance at issue was an asset belonging to King and Hayberg and that payment from the medical-benefits insurance settlement was essentially payment from King and Hayberg. Both cases, however, avoid the issue, instead finding that payment of medical bills by a third-party insurer was not compensation paid under the pertinent health insurance/healthcare provider contract. In King, the Ohio Supreme Court simply found that the third-party insurer's payment "did not equate" to compensation by King. 955 N.E.2d at 350. In Hayberg, the court determined that
995 N.E.2d at 893. As discussed above, the present case differs from King and Hayberg. Unlike the healthcare providers in those cases, Mercy Health and Avectus sought compensation directly from Raymond and Strunk. The case might be very different if Mercy Health and Avectus had billed the responsible tortfeasor or the tortfeasor's insurance company. Instead, Mercy Health and Avectus sought compensation only from Raymond and Strunk.
Moreover, Mercy Health and Avectus seek the balance of any unpaid medical expenses if the relevant attorney "obtain[s] any settlement or judgment." As Raymond and Strunk argue, the healthcare providers do not have an interest in "any" tort settlement or judgment received by Raymond or Strunk. Mercy Health and Avectus certainly do not have a legal interest in a tort settlement or judgment for pain and suffering, lost wages, etc. At best, Mercy Health and Avectus might assert a claim on a tort settlement or judgment that includes reimbursement for the cost of medical services rendered by Mercy Health. However, even if Mercy Health and Avectus had a legitimate claim on a tort settlement that included reimbursement of medical expenses, they cannot presume that any settlement or judgment amount received by Raymond and Strunk includes such reimbursement. See State ex rel. Ohio Acad. of Trial Lawyers v. Sheward, 715 N.E.2d 1062, 1088-90 (Ohio 1999) (finding unconstitutional Ohio Revised Code § 2317.45, which allowed a pre-verdict set-off of collateral benefits, because, absent special jury interrogatories, the court could not assume that the jury's award duplicated any collateral benefit). Mercy Health and Avectus's demand does not account for circumstances when a settlement or judgment lumps together reimbursement for medical expenses and compensation for other categories of damages in a single amount. Therefore, even if Mercy Health and Avectus were not barred from seeking compensation from Raymond and Strunk, they might not have an interest in Raymond's and Strunk's tort recoveries.
The Ohio Supreme Court has narrowly interpreted Ohio Revised Code § 1751.60 to apply only when "a health-care services contract is in place between a provider and a health-insuring corporation" and the provider seeks payment from a "health-insuring corporation's insured." King, 955 N.E.2d at 351. That is precisely what Mercy Health and Avectus sought to do in this case. For that reason, we REVERSE and REMAND for further proceedings not inconsistent with this opinion.