Iowa Supreme Court Holds HealthPort Cannot Overcharge Patients for Medical Records

When Iowa patients requested copies of their own medical records from hospitals and clinics, many found that HealthPort Technologies, a third-party vendor hired by the providers to fulfill those requests, was tacking on fees that far exceeded what state law allowed. Under Iowa Code section 622.10(6), healthcare providers face a strict cap on what they may charge for reproducing medical records. HealthPort's standard billing included a flat "basic fee" and per-page charges that pushed the total well beyond that cap, regardless of whether a patient needed one page or fifty.

Gerald P. Young, Michael L. Haigh, and Suzanne M. Runyon filed a class action petition in 2014 on behalf of Iowa patients who had paid HealthPort's inflated fees. The lawsuit, filed against HealthPort in Polk County, argued that the statutory cap that binds providers must also bind anyone those providers hire to do the same work on their behalf.

HealthPort moved to dismiss, arguing that section 622.10(6) applied only to healthcare providers, not to outside vendors. The district court denied the motion. HealthPort appealed directly to the Iowa Supreme Court.

James Biscoglia, Ryan Nixon, George LaMarca, and Gary Mattson of LaMarca Law Group, P.C., representing the patients, argued that allowing HealthPort to escape the statutory cap would let providers sidestep patient-protection law simply by outsourcing the copying function. The Iowa Association for Justice filed an amicus brief supporting that position, submitted by Joel E. Fenton and Elaine F. Gray. The Iowa Supreme Court agreed. In a March 18, 2016 opinion, the court held that an entity acting as a provider's agent in fulfilling statutorily required records requests cannot charge more than the provider itself could lawfully charge. The court also found the petition's well-pleaded facts sufficient to show that HealthPort functioned as the providers' agent, not as an independent contractor insulated from the fee limits.

The court affirmed the denial of dismissal and remanded the case for further proceedings. No final damages figure was set at this stage, but the ruling resolved the central legal question in the plaintiffs' favor, clearing the way for the class claims to proceed.