Dec. 16, 2021 – A medical records software company is not subject to statutory limits on fees for reproducing medical records, the Wisconsin Supreme Court has ruled.  

In Townsend v. ChartSwap, LLC, 2019AP2034 (Nov. 26, 2021), the court held that a woman who sued the company failed to state a claim because the company was not a health care provider under the statute that sets limits on medical record fees.

Additionally, the court held that the law of agency does not permit the company to be held liable for charging more for the record than a health care provider is allowed to under the statute.

Cost for One Page: $35.87

After she was injured in a car crash in August 2016, Andrew Townsend retained a law firm. After obtaining Townsend’s written consent, the firm requested certified health care records from Milwaukee Radiologists.

ChartSwap replied for Milwaukee Radiologists and provided a one-page certified record; the charge was $35.87. The law firm paid the bill.​

Townsend sued ChartSwap. She claimed the company had violated the limits on charges for medical records in Wis. Stat. section 146.83(3f)(b). Townsend also alleged that ChartSwap had acted as an agent of Milwaukee Radiologists when collecting the $35.87.

Concern Over Absurd Result

ChartSwap moved to dismiss for failure to state a claim. The circuit court granted the motion, ruling that ChartSwap was not a “health care provider” for purposes of section 146.83, which sets fees applicable to patient requests for medical records.

The circuit court also ruled that regardless of whether ChartSwap was an agent for Milwaukee Radiologists, the common law of agency would not impute liability for failing to comply with section 146.83 to ChartSwap.

The court of appeals reversed the circuit court. It did so by interpreting section 146.83(3f)(b) in light of sections 146.84(1)(b) and 990.001(9).

ChartSwap is clearly outside the definition of “health care provider” contained in Wis. Stat. section 146.81(1).

However, section 146.84(1)(b) specifies that “any person” who violates section 146.83 is liable to any person injured by that violation. And section 990.001(9) specifies that legislative requirements in statutes apply to agents the same way they apply to principals.

Interpreting section 146.83(3f)(b) in light of the other two statutes was necessary, the court of appeals held, to avoid the absurd result of allowing a health care provider to charge more for a record than it was allowed under that section by hiring a third party to produce the record.  

Result Is Not Absurd  

In an opinion written by Justice Patience Roggensack, the supreme court reversed the court of appeals. Chief Justice Annette Ziegler, Justice Rebecca Bradley, and Justice Brian Hagedorn joined the majority opinion in its entirety.

Justice Ann Walsh Bradley, Justice Rebecca Dallet, and Justice Jill Karofsky joined the majority opinion except for paragraphs 17 and 23-26. Justice Dallet wrote a concurring opinion, which Justice Walsh Bradley and Justice Karofksy joined.

The “conjunctive interpretation” that guided the court of appeals’ opinion was erroneous, Justice Roggensack wrote.

For one thing, allowing ChartSwap to charge more for providing a medical record than the law allows Milwaukee Radiologists would not be absurd.

“It is not absurd for the legislature to make policy decisions regarding the applicability of statutes to different constituents,” Roggensack wrote.

Look to Intent Was Erroneous

Additionally, the court of appeals erred by holding that the legislature intended that patients be able to obtain copies of their medical records without having to pay more than the reasonable cost of copying and mailing them.

The court of appeals should have used the general/specific canon of statutory interpretation to understand the relationship between sections 146.83(3f)(b) and 146.81(1)(b), Justice Roggensack wrote.

According to that canon, that general wording of section 146.81(1)(b) (“any person”) must yield to the more specific wording of section 146.83(3f)(b) (“health care provider”).

Misapplied Agency Law

The court of appeals’ reliance on section 990.001(9) was misplaced, Roggensack wrote, in part because in applying that section the court misread the common law of agency.

“In order for an agent to be held liable for a statutory violation committed while acting on behalf of a principal, the same conduct would also need to violate the statute if done in the agent’s personal capacity.

“However, no breach of an independent duty of ChartSwap to Townsend is alleged to have occurred. Rather, a breach of Milwaukee Radiologist’s statutory duty to Townsend is alleged.”

‘Muddies the Waters’

In her concurrence, Justice Dallet criticized the majority for employing the general/specific canon of statutory interpretation.

The majority’s analysis, Justice Dallet wrote, should have ended with the examination of the plain wording of section 146.83(3f)(b), which clearly doesn’t apply to ChartSwap because it doesn’t fall within the definition of “health care provider.”

“Instead, it muddies the waters by attempting to apply an inapposite canon of construction,” Justice Dallet wrote.  

Moreover, the majority’s application of the general-specific canon missed the mark, Dallet explained. The canon applies to statutes that both deal with the same subject and conflict with each other, such that they cannot be harmonized.

That wasn’t the case here, Justice Dallet wrote.

“Wisconsin stat. sections 146.83(3f)(b) and 146.84(1)(b) address different subject matter and are not in conflict. The former regulates how much a health care provider can charge a patient for a copy of her medical records; the latter simply provides the penalty for violating the former.”

To employ a canon when a plain wording interpretation would settle the issue, Justice Dallet wrote, was both unnecessary and confusing.