Hewlett final

291
UNCONSCIONABILITY AS A JUDICIAL MEANS FOR CURING
THE HEALTHCARE CRISIS
JEFFREY T. HEWLETT†
I. INTRODUCTION ..................................................................................291
II. BACKGROUND ..................................................................................294
A. A Brief History of Unconscionability......................................... 294
B. Modern Courts’ Interpretation of Unconscionability................ 297
C. Problems in Medical Billing Practices...................................... 298
D. A Context-Specific Look at Unconscionability: How Courts
Have Applied Unconscionability in Medical Billing
Contracts for Uninsured Patients............................................ 305
III. ANALYSIS........................................................................................308
A. Unconscionability Unequivocally Applies to Many Medical
Billing Contracts...................................................................... 308
B. Plausible Explanations for Courts’ Reluctance to Adopt
Unconscionability in Medical Billing Contracts ..................... 312
1. Common Law Principles Against Weighing Consideration
Inadequately Explain the Courts’ General Reluctance to
Find Uninsured Patients’ Medical Billing Contracts
Unconscionable................................................................. 312
2. Maintaining the Status Quo of the Healthcare Market Is
an Inadequate Justification for Refusing to Utilize
Unconscionability on Inequitable Billing Contracts......... 314
IV. CONCLUSION...................................................................................316
APPENDIX A: STATISTICAL ANALYSIS ON U.C.C. AND COMMON
LAW APPLICATION OF UNCONSCIONABILITY.................................317
I. INTRODUCTION
Rising healthcare costs continue to be a problem in the United
States.1
In just the past year alone, the U.S. spent $3.5 trillion on
† B.S., Biomolecular Science, 2016, University of Michigan; J.D., 2020, Wayne
State University Law School. A special thank you to Professor Vincent Wellman for his
guidance, support, and insight throughout this Note.
1. Yasmeen Abutaleb, U.S. Healthcare Spending to Climb 5.3 Percent in 2018:
Agency, THOMSON REUTERS (Feb. 14, 2018, 4:07 PM),
https://www.reuters.com/article/us-usa-healthcare-spending/us-healthcare-spending-to-
climb-53-percent-in-2018-agency-idUSKCN1FY2ZD
[http://web.archive.org/web/20200422141648/https://www.reuters.com/article/us-usa-

292 WAYNE LAW REVIEW [Vol. 66:291
healthcare2
—far and away the most in the developed world.3
Even on a
per capita basis, the U.S. spends twenty-five percent more than the next
highest-spending country, Switzerland.4
This is particularly problematic
for uninsured patients, many of whom bear a disproportionate burden of
these healthcare costs.5
The Affordable Care Act (ACA) attempted to remedy this
discrepancy, but it has ultimately failed to do so.6
The number of
medically uninsured individuals continues to grow alongside rising
healthcare costs.7
Additionally, the advent of publicized hospital billing
prices has failed to adequately inform healthcare consumers or contribute
to lower healthcare prices.8
Uninsured patients are thus frequently left
without many options or recourse in the healthcare market.9
healthcare-spending/us-healthcare-spending-to-climb-53-percent-in-2018-agency-
idUSKCN1FY2ZD].
2. Id. Notably, this amounts to almost eighteen percent of the U.S.’s gross domestic
product. National Health Expenditure Data, CTRS. FOR MEDICARE & MEDICAID SERVS.
(Dec. 17, 2019), https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-
Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical
[http://web.archive.org/web/20200422142049/https://www.cms.gov/Research-Statistics-
Data-and-Systems/Statistics-Trends-and-
Reports/NationalHealthExpendData/NationalHealthAccountsHistorical].
3. Gerard F. Anderson et al., It’s Still the Prices, Stupid: Why the US Spends So
Much on Health Care, and a Tribute We Owe to Uwe Reinhardt, 38 HEALTH AFF. 87, 88
(Jan. 2019).
4. Id.
5. INST. OF MED., HIDDEN COSTS, VALUES LOST: UNINSURANCE IN AMERICA 38
(Arthur L. Caplan et al. eds., 2003).
6. See George A. Nation III, Determining the Fair and Reasonable Value of Medical
Services: The Affordable Care Act, Government Insurers, Private Insurers and
Uninsured Patients, 65 BAYLOR L. REV. 425 (2013); see also Vann R. Newkirk II, The
American Health-Care System Increases Income Inequality, ATLANTIC (Jan. 19, 2018)
(citing Andrea S. Christopher et al., The Effects of Household Medical Expenditures on
Income Inequality in the United States, 108 AM. J. OF PUB. HEALTH 351, 351–54 (Mar.
2018)), https://www.theatlantic.com/politics/archive/2018/01/health-care-income-
inequality-premiums-deductibles-costs/550997/
[http://web.archive.org/web/20200422143031/https://www.theatlantic.com/politics/archiv
e/2018/01/health-care-income-inequality-premiums-deductibles-costs/550997/].
7. See Abutaleb, supra note 1; see also Yasmeen Abutaleb, U.S. Healthcare
Uninsured Rises Most in Near Decade: Gallup, THOMSON REUTERS (Jan. 16, 2018, 11:45
AM), https://www.reuters.com/article/us-usa-healthcare-uninsured/u-s-healthcare-
uninsured-rises-most-in-near-decade-gallup-idUSKBN1F523O
[http://web.archive.org/web/20200422143142/https://www.reuters.com/article/us-usa-
healthcare-uninsured/u-s-healthcare-uninsured-rises-most-in-near-decade-gallup-
idUSKBN1F523O] [hereinafter U.S. Healthcare Uninsured Rises].
8. See infra Parts II.C, III.A.
9. See INST. OF MED., supra note 5.

2020] UNCONSCIONABILITY AS A JUDICIAL MEANS 293
Courts have been equally as ineffective in helping uninsured patients
recoup these costs.10
In citing both common law contract principles and
the sanctity of the medical healthcare market, courts have consistently
disavowed claims against hospitals for the inequity of their pricing.11
However, given the common law doctrine of unconscionability, courts
could invalidate many of these inequitable hospital billing contracts.12
Under the framework of Williams v. Walker-Thomas Furniture,
unconscionability protects consumers from grossly inequitable
contracts—particularly where there is disproportionate bargaining power
or “an absence of meaningful [consumer] choice.”13
Quite frequently,
medical billing contracts satisfy all the requisite conditions for
unconscionability.14
This Note will explore courts’ reluctance to utilize unconscionability
in medical billing contexts, despite its otherwise seemingly natural fit.15
It is this Note’s primary contention that unconscionability should apply
toward medical billing of uninsured patients.16
Furthermore, it is this
Note’s contention that the “uniqueness of the healthcare market” has
caused a rift between courts’ application of common law
unconscionability and medical billing unconscionability17
and that this
tension is not sufficient justification for refuting the doctrine.18
Lastly,
this Note argues that, because courts uniformly apply Uniform
Commercial Code (U.C.C.) unconscionability and common law
unconscionability across most every factual context,19
and because there
is no compelling justification to the contrary, unconscionability in
medical billing contexts should apply just as frequently.20
10. See George A. Nation III, Obscene Contracts: The Doctrine of Unconscionability
and Hospital Billing of the Uninsured, 94 KY. L.J. 101 (2006) [hereinafter Obscene
Contracts].
11. See infra Parts III.B.1–2.
12. See infra Part III.A.
13. Williams v. Walker-Thomas Furniture Co., 350 F.2d 445, 449 (D.C. Cir. 1965).
14. Id.
15. See infra Parts II, III.
17. See infra Part III.B.1.
18. See infra Part III.B.2.
19. See infra App. A; see also Larry A. DiMatteo & Bruce L. Rich, A Consent Theory
of Unconscionability: An Empirical Study of Law in Action, 33 FLA. ST. U. L. REV. 1067
(2006).

II. BACKGROUND
A. A Brief History of Unconscionability
Unconscionability has its roots in antiquity, dating as far back as
Roman law.21
To uphold moral edicts requiring fair exchange in value,
Roman courts would rescind inequitable contracts under laesio
enormis.22
However, laesio enormis applied only in narrow contexts for
land contracts overvalued twofold23
and, accordingly, did not give courts
latitude to screen all contracts for fairness.24
Although Roman courts exercised an early precursor to
unconscionability, courts of equity implemented a doctrine that more
closely resembles contemporary unconscionability.25
Common law
rulings largely turned on a contract’s fairness:26
if an agreement was
grossly unjust, or such that no reasonable man would enter into it, then
courts only enforced the contract to its equitable extent.27
Generally,
courts of equity required more than mere hardship to invalidate a
contract.28
Rather, the contract needed to unduly leverage a party’s
necessity or weakness.29
Few courts actually defined the term
21. Harry G. Prince, Unconscionability in California: A Need for Restraint and
Consistency, 46 HASTINGS L.J. 459, 467 (1995) (citing James Gordley, Equality in
Exchange, 69 CAL. L. REV. 1587 (1981)).
22. Id. (stating that laesio enormis roughly paralleled the modern-day
unconscionability doctrine).
23. Id.
24. Id.
25. See id. (stating that “courts of equity would not enforce an unfair bargain if it
would make the courts a tool in achieving an unjust or unfair result”); see also Amy J.
Schmitz, Embracing Unconscionability’s Safety Net Function, 58 ALA. L. REV. 73, 77
(2006) (citing James Gordley, The Common Law in the Twentieth Century: Some
Unfinished Business, 88 CAL. L. REV. 1815, 1849–50 (2000)).
26. Robert A. Hillman, Debunking Some Myths About Unconscionability: A New
Framework for U.C.C. Section 2-302, 67 CORNELL L. REV. 1, 26–27 (stating that courts of
equity grew because English common law courts failed to employ fairness principles).
27. RESTATEMENT (SECOND) OF CONTRACTS § 208 (AM. LAW INST. 1981); see also
Hume v. United States, 132 U.S. 406, 411 (1889) (quoting Earl of Chesterfield v.
Janssen, 2 Ves. Sr. 125, 155, 28 Eng. Rep. 82, 100 (Ch. 1750) (“[S]uch as no man in his
senses and not under delusion would make on the one hand, and as no honest and fair
man would accept on the other.”).
28. V. Woerner, Annotation, “Unconscionability” as Ground for Refusing
Enforcement of Contract for Sale of Goods or Agreement Collateral Thereto, 18
A.L.R.3d 1305 (1968) (stating that unconscionability is inapplicable to mere hardship).
29. Id.

“unconscionability” in these decisions,30
however, and instead relied
upon purely equitable determinations.31
Modern courts have since merged the discrepancies between courts
of law and equity;32
consequently, unconscionability now applies more
broadly, covering a variety of contract contexts.33
Before the adoption of
the U.C.C., courts policed inequitable contracts by adverse language
construction, by bending the rules of offer and acceptance, or by
constructions of public policy.34
However, courts were often wary of
rendering contracts “unconscionable,”35
as the doctrine frequently
clashed with common law notions of consideration36
—in particular,
unconscionability required courts to forego the common law practice of
refusing to weigh the adequacy of consideration.37
30. See, e.g., Earl of Chesterfield v. Janssen, 2 Ves. Sr. 125, 155, 28 Eng. Rep. 82,
100 (Ch. 1750) (“[I]t may be apparent from the intrinsic nature and subject of the bargain
itself; such as no man in his senses and not under delusion would make on the one hand,
and as no honest and fair man would accept on the other; which are unequitable and
unconscientious bargains.” (emphasis added)).
31. RESTATEMENT (SECOND) OF CONTRACTS § 208 cmt. b (AM. LAW INST. 1981).
32. Id.
33. See, e.g., Williams v. Walker-Thomas Furniture Co., 350 F.2d 445, 447–50 (D.C.
Cir. 1965) (upholding unconscionability on a contract where the furniture company
retained title to the product and could repossess the product for any defaulted payment);
Vockner v. Erickson, 712 P.2d 379 (Alaska 1986) (upholding the trial court’s
determination of unconscionability in the sale of an apartment building to an experienced
real estate purchaser when current payments were insufficient to cover accrued interest
on the unpaid sale balance and an elderly grantor would have been 103 years old when
the balloon payment became due); Bennett v. Bailey, 597 S.W.2d 532 (Tex. App. 1980)
(upholding a jury determination of unconscionable conduct in pressuring an elderly
widow to purchase expensive dance lessons).
34. U.C.C. § 2-302 cmt. 1 (AM. LAW INST. & UNIF. LAW COMM’N 1977).
35. Woerner, supra note 28 (stating that courts have seldomly defined the term
unconscionability).
36. See generally Warren H. Hyman, Adequacy of Consideration and the
Unconscionable Contract, 86 COM. L.J. 500 (1981) (stating that courts are generally
against weighing consideration); see also RESTATEMENT (SECOND) OF CONTRACTS § 208
cmt. c (AM. LAW INST. 1981) (stating that inadequacy of consideration alone is not
enough to invalidate a contract); MICH. L. REV. ASS’N, 67 MICH. L. REV. 1248, 1250
(1969); see also 17 C.J.S. Contracts §§ 175–78 (2020).
37. See Anne Fleming, The Rise and Fall of Unconscionability as the “Law of the
Poor”, 102 GEO. L.J. 1383, 1402 (2014) (citing K. N. Llewellyn, Book Review, 52
HARV. L. REV. 700, 702–03 (1939)); MICH. L. REV. ASS’N, 67 MICH. L. REV. 1248, 1250
n.19 (1969) (citing 1 ARTHUR CORBIN, CORBIN ON CONTRACTS §§ 127, 128 (1963))
(“[C]ourts were initially unclear whether inadequate consideration alone constituted
unconscionability.”).

With the adoption of the U.C.C., the doctrine of unconscionability
proliferated in modern courts.38
Under U.C.C. § 2-302, courts could
invalidate a sale-of-goods contract that contained unconscionable
provisions.39
But, with no statutory definition for “unconscionability,”
courts were left to define the doctrine themselves.40
Regardless, the
proliferation of common law unconscionability paralleled the growth of
U.C.C. unconscionability,41
largely because the Restatement of Contracts
Second § 208 explicitly borrowed the same language from U.C.C. § 2-
302.42
Because U.C.C. § 2-302 was seen as forward-thinking in the realm
of contract law, courts began using it by analogy in common law, even
where the contract was not for a sale of goods.43
Courts evaluating
common law unconscionability would, and still do, use U.C.C.
unconscionability rulings for guidance (and vice versa).44
Unconscionability continued gaining popularity following the D.C.
Circuit’s 1965 decision in Williams v. Walker-Thomas Furniture, as
many courts began invalidating contracts for unconscionable terms.45
However, this growth was attenuated, as courts began limiting the
38. John A. Spanogle Jr., Analyzing Unconscionability Problems, 117 U. PA. L. REV.
931, 931 (1969).
39. U.C.C. § 2-302 (AM. LAW INST. & UNIF. LAW COMM’N 1977).
40. See Woerner, supra note 28 (“[I]t is to be noted that the term ‘unconscionable’ is
not defined, nor are the factors or elements of ‘unconscionability’ [explicitly]
enumerated.”).
41. See U.C.C. § 2-302(1) (AM. LAW INST. & UNIF. LAW COMM’N 1977); DiMatteo,
supra note 19, at 1115; see also infra App. A and Part III.B.1.
42. See RESTATEMENT (SECOND) OF CONTRACTS § 208 (AM. LAW INST. 1981).
Comment a states:
Uniform Commercial Code § 2-302 is literally inapplicable to contracts not
involving the sale of goods, but it has proven very influential in non-sales
cases. It has many times been used either by analogy or because it was felt to
embody a generally accepted social attitude of fairness going beyond its
statutory application to sales of goods.
Id. at cmt. a.
43. Charles Knapp, Unconscionability in American Contract Law: A Twenty-First
Century Survey, UNIV. OF CAL. HASTINGS C. OF L., Legal Research Paper Series,
Research Paper No. 71, 2 (2013),
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2346498
[http://web.archive.org/web/20200422145722/https://papers.ssrn.com/sol3/papers.cfm?ab
stract_id=2346498]. Importantly, the Williams opinion asserts that the principles behind
unconscionability pre-dated U.C.C. § 2-302. Williams v. Walker-Thomas Furniture Co.,
350 F.2d 445, 448–49 (D.C. Cir. 1965). The U.C.C. was not yet effective in the District
of Columbia at the time the Williams contracts were executed. See id.
44. Knapp, supra note 43, at 1; see also DiMatteo, supra note 19, at 1115.
45. See Fleming, supra note 37, at 1387; see also Williams, 350 F.2d at 450 (holding
that a consumer contract was unconscionable where the seller retained title to all items of
a sale on credit, even though the consumer only defaulted on a single installment
payment).

doctrine to only consumer contracts.46
Presently, unconscionability
almost exclusively applies to consumer contracts, regardless of whether
they fall under the U.C.C. or under the common law.47
B. Modern Courts’ Interpretation of Unconscionability
Unconscionability typically consists of a two-prong inquiry:
procedural unconscionability and substantive unconscionability.48
Both
prongs must ordinarily be present to constitute unconscionability,
although courts will occasionally hold that substantive unconscionability
alone is sufficient.49
In all practicality, however, substantive
unconscionability rarely exists independent of procedural
Almost all cases of unconscionability will consist of
both substantive and procedural elements.51
Procedural unconscionability turns on the bargaining power of the
parties.52
Accordingly, this inquiry looks at circumstances prior to
contract formation.53
The absence of meaningful choice, high pressure
tactics, discrepancies in sophistication or wealth of the parties, whether
terms were explained to the weaker party, and unfair surprise or lack of
negotiation are all meaningful inquiries in determining procedural
Substantive unconscionability turns on the
reasonability of contractually imposed duties or terms.55
Contracts with
an overall imbalance in the parties’ rights or obligations, such as
significant cost-price discrepancies, are frequently said to be
substantively unconscionable.56
46. See Jane P. Mallor, Unconscionability in Contracts Between Merchants, 40 SW.
L.J. 1065, 1066 (1986); see also 17 C.J.S. Contracts § 3 (2018); Fleming, supra note 37,
at 1387 (stating that the doctrine of unconscionability experienced a brief resurgence in
the late 1960s following Williams v. Walker Thomas Furniture); Knapp, supra note 43, at
3–4.
47. See generally Mallor, supra note 46. See also 17 C.J.S. Contracts § 3 (2018). For
a more detailed history of unconscionability, see generally Knapp, supra note 43.
48. 17A AM. JUR. 2D Contracts § 272 (2020).
49. Id.
50. Mallor, supra note 46, at 1073.
51. Id.
52. 17A AM. JUR. 2D Contracts § 272 (2020).
53. Id.
54. Id. (citing In re Colony Beach & Tennis Club Ass’n, 454 B.R. 209 (M.D. Fla.
2011); THI of New Mexico at Vida Encantada, LLC v. Lovato, 848 F. Supp. 2d 1309
(D.N.M. 2012); McGowan & Co., v. Bogan, 93 F. Supp. 3d 624 (S.D. Tex. 2015)).
55. Id.
56. See, e.g., Hanover Ins. Co. v. Northern Bldg. Co., 751 F.3d 788 (7th Cir.
2014); Mohamed v. Uber Techs., Inc., 109 F. Supp. 3d 1185 (N.D. Cal. 2015); Coup v.

Although unconscionability typically applies only in consumer
settings, this is not a preclusive factor.57
The U.C.C. and Restatement of
Contracts Second both fail to mention a consumer context limitation;58
accordingly, unconscionability is technically applicable in commercial
settings.59
Nevertheless, courts almost universally require a consumer
contract as a prerequisite for unconscionability.60
Modern courts enforce unconscionability sporadically, with only
about thirty-eight percent of unconscionability claims succeeding on the
merits.61
Even where unconscionability elements are present, courts may
choose to only invalidate the unconscionable provisions of the
contract62
—in other words, courts can, and will, bifurcate the
unconscionable clause while enforcing the remainder of the contract.63
Effectively, unconscionability may or may not be a material breach,
although courts frequently treat it as immaterial.64
C. Problems in Medical Billing Practices
The increasing cost of healthcare and medical care is a continuing
problem for uninsured patients.65
A 2017 census report determined that
around 28.5 million United States citizens are medically uninsured and
Scottsdale Plaza Resort, LLC, 823 F. Supp. 2d 931 (D. Ariz. 2011); Zullo v. Superior
Court, 127 Cal. Rptr. 3d 461 (Ct. App. 2011).
57. See Mallor, supra note 46 (citing Langemeier v. Nat’l Oats Co., 775 F.2d 975,
976–77 (8th Cir. 1985) (popcorn grower); Weaver v. Am. Oil Co., 276 N.E.2d 144, 148
(Ind. 1971) (service station operator); Pittsfield Weaving Co. v. Grove Textiles, Inc., 430
A.2d 638, 640 (N.H. 1981) (commercial weaving business)).
58. Compare U.C.C. § 2-302 (AM. LAW INST. & UNIF. LAW COMM’N 1977), with
RESTATEMENT (SECOND) OF CONTRACTS § 208 (AM. LAW INST. 1981).
59. See supra note 57 and accompanying text.
60. See DiMatteo, supra note 19, at 1097 (stating that while common law
unconscionability claims for consumers are successful 37.8% of the time, and while sale
of goods unconscionability claims are successful 30% of the time, merchant claims are
only successful 16% of the time.).
61. See id. at 1100.
62. See Restatement (SECOND) OF CONTRACTS § 208 (AM. LAW INST. 1981). U.C.C.
Section 2-302, comment two states:
[U]nder this section the court, in its discretion, may refuse to enforce the
contract as a whole if it is permeated by the unconscionability, or it may strike
any single clause or group of clauses which are so tainted or which are contrary
to the essential purpose of the agreement, or it may simply limit
unconscionable clauses so as to avoid unconscionable results.
U.C.C. § 2-302 cmt. 2 (AM. LAW INST. & UNIF. LAW COMM’N 1977).
63. RESTATEMENT (SECOND) OF CONTRACTS § 208 (AM. LAW INST. 1981); U.C.C. § 2-
302 (AM. LAW INST. & UNIF. LAW COMM’N 1977).
65. Nation, supra note 6, at 426.

that as many as ten to sixteen percent of minority populations are
uninsured.66
Between 2016 and 2017, the number of uninsured citizens
rose by 3.2 million people.67
To complicate matters, the rising number of
medically uninsured coincides with large increases in the cost of medical
care.68
As of 2016, the United States had the highest healthcare spending
of any developed country in the world at $9,892 per capita.69
This
amounted to more than double the median amount and is twenty-five
percent higher than the second-highest spending country, Switzerland.70
In some parts of the United States, healthcare costs have been so high
that patients (including, notably, some of whom are insured in the United
States) are crossing into Mexico or Canada for cheaper medical
treatment.71
Along the Texas border, in particular, approximately thirty-
seven percent of adults surveyed reported visiting Mexico for
healthcare.72
Merely by crossing the border, many American citizens
66. Edward R. Berchick et al., Health Insurance Coverage in the United States: 2017,
U.S. CENSUS BUREAU (Sept. 12, 2018),
https://www.census.gov/library/publications/2018/demo/p60-264.html
[http://web.archive.org/web/20200422151015/https://www.census.gov/library/publication
s/2018/demo/p60-264.html].
67. See U.S. Healthcare Uninsured Rises, supra note 7.
68. Ellie Kincaid, What’s Driving Healthcare Costs up in the U.S., FORBES (Nov. 17,
2017, 11:20 AM), https://www.forbes.com/sites/elliekincaid/2017/11/07/whats-driving-
health-care-costs-up-in-the-u-s/#5bad25b176b6
[http://web.archive.org/web/20200422151133/https://www.forbes.com/sites/elliekincaid/
2017/11/07/whats-driving-health-care-costs-up-in-the-u-s/].
69. Johns Hopkins Bloomberg Sch. of Pub. Health, U.S. Health Care Spending
Highest Among Developed Countries, JOHNS HOPKINS UNIV. (Jan. 7, 2019),
https://www.jhsph.edu/news/news-releases/2019/us-health-care-spending-highest-among-
developed-countries.html
[http://web.archive.org/web/20200422151319/https://www.jhsph.edu/news/news-
releases/2019/us-health-care-spending-highest-among-developed-countries.html].
70. Id.
71. Emma Davie, Quiet Resurgence: Americans Coming North to Fill Prescriptions
on the Rise Again, CANADIAN BROADCASTING CORP. (May 20, 2019, 7:00 AM),
https://www.cbc.ca/news/canada/nova-scotia/u-s-canada-prescriptions-border-1.5137350
[https://web.archive.org/web/20200623043320/https://www.cbc.ca/news/canada/nova-
scotia/u-s-canada-prescriptions-border-1.5137350]; Anna Gorman, Health Care, and
Patients, Go South—to Mexico, U.S.A. TODAY (May 7, 2014, 10:43 AM),
https://www.usatoday.com/story/news/nation/2014/05/07/healthcare-mexico-
obamacare/8517917/
[http://web.archive.org/web/20200422151539/https://www.usatoday.com/story/news/nati
on/2014/05/07/healthcare-mexico-obamacare/8517917/].
72. Dajun Su et al., Cross-Border Utilization of Health Care: Evidence from a
Population-Based Study in South Texas, 46 HEALTH SERVS. RES. J. 859, 859–61 (June
2011), https://onlinelibrary.wiley.com/doi/full/10.1111/j.1475-6773.2010.01220.x
[http://web.archive.org/web/20200422151746/https://onlinelibrary.wiley.com/doi/full/10.
1111/j.1475-6773.2010.01220.x].

save upwards of fifty percent on medication73
and pay as little as fifteen
dollars for a standard check-up.74
Individuals going to Canada experience
similar savings, often buying healthcare supplies such as insulin at a
tenth of the price in the United States.75
One of the major contributing factors to high healthcare costs in the
United States concerns its medical billing practices.76
This Note will
examine these billing practices in the context of hospitals.77
When hospitals issue medical bills, they typically negotiate and
contract with insurers for the price of services rendered.78
Hospital
billing is a complicated process, beginning with what is known as a
“chargemaster.”79
A chargemaster is a list containing all the goods and
services a hospital provides, along with their list price.80
Ultimately, the
hospital will use its chargemaster to inventory costs and to negotiate with
insurers for the cost of medical services.81
Chargemaster prices, however,
are arbitrarily determined82
and tend to be incredibly overpriced.83
It is
73. See id.
74. Gorman, supra note 71.
75. Davie, supra note 71.
76. See George A. Nation III, Hospital Chargemaster Insanity: Healing the Healers,
43 PEPP. L. REV. 745, 746 (2016) [hereinafter Hospital Chargemaster Insanity].
77. See infra Parts II.D, III.
78. Hospital Chargemaster Insanity, supra note 76, at 758.
79. See generally id.
80. Id. at 746.
81. Id.
82. Id. at 747 (citing Temple Univ. Hosp., Inc. v. Healthcare Mgmt. Alts. Inc., 832
A.2d 501, 510 (Pa. Super. Ct. 2003) and noting that chargemaster prices “bear no
relationship to the amount typically paid for those services”). In a New York Times
article, Rosenthal reported:
[H]ow do hospitals set prices? They set prices to maximize revenue, and they
raise prices as much as they can—all the research supports that . . .
[c]hargemaster prices are basically arbitrary, not connected to underlying costs
or market prices . . . . Hospitals ‘can set them at any level they want’ . . . .
[T]here are no market constraints.
Elisabeth Rosenthal, As Hospital Prices Soar, A Stitch Tops $500, N.Y. TIMES (Dec. 2,
2013), https://www.nytimes.com/2013/12/03/health/as-hospital-costs-soar-single-stitch-
tops-500.html
[http://web.archive.org/web/20200422152616/https://www.nytimes.com/2013/12/03/heal
th/as-hospital-costs-soar-single-stitch-tops-500.html]; see also Uwe E. Reinhardt, The
Pricing of U.S. Hospital Services: Chaos Behind a Veil of Secrecy, 25 HEALTH AFF. 57,
59 (2006) (noting that chargemaster rates “do not bear any systematic relationship to the
amounts third-party payers actually pay them for the listed services”); Christopher P.
Tompkins et al., The Precarious Pricing System for Hospital Services, 25 HEALTH
AFF. 45, 50–52 (2006) (explaining that individual items in the chargemaster are subject to
smaller or larger than average increases based on the advice of an “arsenal of consultants
and computer software . . . used to determine optimal increases in charges for various
services. Optimality implies a higher payoff for a given rate of increase . . . . [O]ver time,

not uncommon for neighboring hospitals to have vastly different
chargemaster prices for similar procedures.84
Additionally, chargemaster
prices typically bear no relationship to the quality or the cost of services
rendered.85
Essentially, the purpose of the chargemaster price list is to
provide a starting point for negotiations with insurers.86
Insurers typically
mitigate these high prices in their negotiations with hospitals,87
as an
insurer will rarely contract for the full chargemaster list price.88
Consequently, there is only a tenuous positive correlation between
increases in chargemaster list prices and hospital revenue.89
Because insurers rarely pay the full chargemaster price, hospitals
frequently argue that high chargemaster prices are inconsequential.90
However, this is mistaken, particularly when it comes to medical billing
for uninsured patients.91
High chargemaster prices have contributed to
the United States having higher medical costs in the United States than in
any other developed country.92
Additionally, the lack of transparency in
chargemaster pricing has made it difficult for patients to compare prices
across hospitals, resulting in hindered competition and price
discrimination for uninsured patients.93
Unfortunately, there is little to
disincentivize hospitals from increasing their chargemaster list prices94
—
indeed, from 1984 to 2004 “chargemaster prices increased 10.7% per
year.”95
While chargemasters apply equally to both insured and uninsured
patients, the negotiation process that takes place with medical insurers
over chargemaster prices ultimately does not apply to billing uninsured
a hospital’s chargemaster is bent, stretched, and distorted by numerous pressures and
responses.”); Lucette Lagnado, California Hospitals Open Books, Showing Huge Price
Differences, WALL ST. J. (Dec. 27, 2004),
https://www.wsj.com/articles/SB110410465492809649
[http://web.archive.org/web/20200422153129/https://www.wsj.com/articles/SB11041046
5492809649] (“There is no method to the madness[;] . . . [a]s we went through the years,
we had these cockamamie formulas . . . . We multiplied our costs to set our charges.”).
83. See Hospital Chargemaster Insanity, supra note 76, at 747.
84. Id. at 746–47.
85. Id. at 748.
86. Id.
87. Id. at 747.
88. Id. at 747–48.
89. Id.
90. Id. at 748.
91. Id. at 748–49.
92. Id. at 749.
93. Id. at 749–50.
94. See Nation, supra note 6, at 428.
95. Id.

patients.96
Medical prices on chargemasters often run ten times higher
than prices a hospital will routinely accept from an insurer.97
Patients
paying out-of-pocket are often expected to pay the full chargemaster
amount, as hospitals frequently refuse to reduce their pricing for such
patients.98
Hospitals will often issue these bills without the uninsured
patient’s negotiation, without explanation or justification for the pricing,
and without giving the patient any meaningful choice in the matter.99
Consequently, uninsured patients frequently receive contractually-
binding medical bills that are unreasonably high and far exceed those of
insured patients.100
Scholars have posited that treating patients as consumers in an open
healthcare market would help ameliorate some of the problems
confronting uninsured patients.101
However, there are multiple dilemmas
to this approach.102
Even when patients know the chargemaster pricing,
they are not necessarily aware of what they are purchasing.103
A patient
may know that he needs a hernia repair, but a layperson may not know
what the procedure requires—the number of sutures, gloves, man-hours,
medical instruments, or medicine that such a procedure requires, for
example.104
The situation is further complicated when patients do not
even know what treatment they require, something that frequently occurs
in emergency scenarios.105
Facial exposure to a chargemaster provides
little predictive value to your average patient, unless they themselves
happen to be a medical expert.106
Accordingly, where patient-consumers
encounter a chargemaster system, it is exceedingly difficult for such
individuals to negotiate price.107
96. See generally Obscene Contracts, supra note 10.
97. Hospital Chargemaster Insanity, supra note 76, at 748.
98. Id. at 748–49; see also Steven Brill, Bitter Pill: Why Medical Bills Are Killing Us,
TIME (Apr. 4, 2013), https://time.com/198/bitter-pill-why-medical-bills-are-killing-us/
[http://web.archive.org/web/20200422153901/https://time.com/198/bitter-pill-why-
medical-bills-are-killing-us/] (recounting various examples of self-pay patients being
billed full charges by hospitals); Obscene Contracts, supra note 10, at 101–05.
99. See generally Hospital Chargemaster Insanity, supra note 76, at 748–49.
100. Id.
101. See Mark A. Hall & Carl E. Schneider, Patients as Consumers: Courts,
Contracts, and the New Medical Marketplace, 106 MICH. L. REV. 643 (2008).
102. See Nation, supra note 6, at 428.
103. See id.
104. See id.
105. See id. at 428–29.
106. See id. at 429.
107. See id. at 436 (noting that uninsured patients are often unaware of the
chargemaster system or its intricacies).

The ACA has also failed to effectively remedy this situation.108
In
order for a hospital to remain tax-exempt as a non-profit, the ACA
provides that hospitals cannot charge particular uninsured patients more
than the “amounts generally billed to individuals who have insurance
covering such care.”109
However, the ACA does not provide any
particular criteria by which these hospitals must abide;110
consequently,
hospitals are free to set their own criteria concerning who qualifies as
“uninsured.”111
Perhaps most unfortunately, the provision incentivizes
higher chargemaster prices, as hospitals must bill certain uninsured
patients at equal or lesser rates than insured patients.112
Even with the
advent of the ACA, the number of uninsured citizens continues to rise
along with the cost of medical care.113
As of January 1, 2019, the ACA also mandates that hospitals across
the United States publish their chargemasters online.114
Ostensibly, the
new requirement aims to provide the public with more transparent
pricing in the healthcare market.115
However, experts are doubtful that
this new mandate will lower healthcare costs.116
For both insured and
uninsured patients, the prices listed on public chargemasters are
infrequently the actual cost that a patient pays out-of-pocket.117
Even if
public chargemasters were actual sticker-prices, prices for the same
procedure vary wildly in price.118
Within small geographic areas such as
southeast Michigan, a hip replacement surgery lists $70,621 at Detroit’s
Henry Ford Hospital, $79,178 at the University of Michigan Health
System, and $90,556 at Detroit Medical Center’s Harper Hospital in
2019.119
108. See infra text accompanying notes 108–25 and accompanying text.
109. See Nation, supra note 6, at 467 (citing I.R.C. § 501(r)(5)(A) (2011)).
110. See id. at 468.
111. See id.
112. See id. at 468–69.
113. Abutaleb, supra notes 1; see also U.S. Healthcare Uninsured Rises, supra note 7.
114. JC Reindl, Hospitals Now Required to List Prices Online for Every Medical
Procedure, Service, DET. FREE PRESS (Jan. 3, 2019, 12:27 PM),
https://www.freep.com/story/money/business/2019/01/03/michigan-hospitals-post-prices-
online/2462886002/
[https://web.archive.org/web/20200623052727/https://www.freep.com/story/money/busin
ess/2019/01/03/michigan-hospitals-post-prices-online/2462886002/].
115. Id.
116. Id. (“[Electronically available chargemasters] are not [] particularly useful
datapoint[s] . . . I don’t expect it to have a significant impact, and I don’t expect it to be a
driver of lower health care costs.” (citing Marianne Udow-Phillips, executive director of
the Center for Health and Research Transformation in Ann Arbor, Michigan)).
117. Id.
118. Id.
119. Id.

However, even if a patient knew they needed a hip replacement
surgery, the chargemasters are largely indecipherable to a lay-person.120
For example, the University of Michigan’s Health System chargemaster
lists a “revision of hip or knee replacement w mcc” at $154,806, a
“revision of hip or knee replacement w cc” at $88,441, and a “revision of
hip or knee replacement w/o cc/mcc” at $70,601, while a “major hip and
knee joint replacement or reattachment of lower extremity w/mcc” costs
$83,610, and a “major hip and knee joint replacement or reattachment of
lower extremity w/o mcc” costs $45,459.121
Notably, all prices listed are
the median and “DO NOT REPRESENT [THE PATIENT’S]
ESTIMATED OUT OF POCKET COST.”122
Furthermore, there is no
calculation concerning how the hospital system arrives at these
seemingly arbitrary numbers.123
120. See infra App. A and Part III.B.1; see also Michigan Medicine Standard Charges,
UNIV. OF MICH. MED. (Nov. 1, 2018), https://www.uofmhealth.org/michigan-medicine-
standard-charges
[http://web.archive.org/web/20200422154542/https://www.uofmhealth.org/michigan-
medicine-standard-charges] (referring to external link of “Michigan Medicine Diagnosis-
Related Groups (DRG) Charges” under subsection “Standard Charges by Diagnosis-
Related Groups (DRG)”). The author of this Note certainly considers himself a layperson
and has no idea what “mcc,” “cc,” or “without mcc/cc” means. The chargemaster itself
provided no definition for these designations and also provided no guidance for how the
hospital applies these designations. See id. A cursory Google search seems to indicate
that “mcc” stands for “major complications or comorbidities,” while “cc” stands for
“code correction.” What may constitute a major complication, comorbidity, or code
correction is similarly unclear. See, e.g., CTRS. FOR MED. & MEDICAID SERVS., MAJOR
JOINT REPLACEMENT (HIP OR KNEE) (May 2017), https://www.cms.gov/Outreach-and-
Education/Medicare-Learning-Network-
MLN/MLNProducts/Downloads/jointreplacement-ICN909065Printfriendly.pdf
[http://web.archive.org/web/20200422154843/https://www.cms.gov/Outreach-and-
Education/Medicare-Learning-Network-
MLN/MLNProducts/Downloads/jointreplacement-ICN909065Printfriendly.pdf]. Neither
a comorbidity nor complication is well-defined in medical literature, but broadly
speaking, both are co-occurring health conditions that complicate another health
condition or procedure (for example, arthritis may be considered a comorbidity for a hip
replacement). Jose M. Valderas et al., Defining Comorbidity: Implications for
Understanding Health and Health Services, 7 ANNALS OF FAM. MED. 357, 357–363 (Jul.
2009) https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2713155/
[http://web.archive.org/web/20200422155011/https://www.ncbi.nlm.nih.gov/pmc/articles
/PMC2713155/]. Furthermore, the chargemaster is unclear what distinguishes a “major”
comorbidity from just a “normal” comorbidity. See Michigan Medicine Standard
Charges, supra note 120. As for what a “code correction” means, however, this author
was unable to find any materials or definitions for the term. Presumably, it is an
administrative classification that allows a hospital’s billing department to adjust a price
up or down depending on what chargemaster category fits best, but that is simply a guess.
121. Michigan Medicine Standard Charges, supra note 120.
122. Id.
123. Id.

Both the free market and legislation have largely failed to remedy the
situation, as described above.124
However, as discussed below, the
judicial system has been equally as ineffective in its policing of
uninsured medical billing.125
D. A Context-Specific Look at Unconscionability: How Courts Have
Applied Unconscionability in Medical Billing Contracts for Uninsured
Patients
Although courts have applied unconscionability in a variety of
contexts, very few have invalidated uninsured billing contracts under
As a baseline measure, courts invalidate U.C.C.
contracts under unconscionability around thirty-seven percent of the
time.127
Further, courts invalidate (common law) consumer
unconscionability contracts around thirty to forty percent of the time.128
Uninsured patients filing unconscionability claims for exorbitant medical
bills should fall under this common law subset of thirty to forty
percent—however, out of twenty-three cases surveyed for the purposes
of this Note, only one court (five percent) has invalidated an uninsured
patient’s medical billing contract under unconscionability.129
This seemingly low percentage is perhaps explained by the many
cases that would be suitable for unconscionability but nevertheless fail to
address the doctrine.130
For instance, in Michigan, three recent courts
have looked at ambiguity,131
unjust enrichment,132
and consumer
protection acts133
concerning chargemaster billing of uninsured
patients—yet none of the three cases considered unconscionability, and
124. See supra Part II.C. Notably, medical bills are now among the leading causes of
bankruptcy. Obscene Contracts, supra note 10, at 104 (citing Lucette Lagnado, Taming
Hospital Billing, WALL ST. J., June 10, 2003, at B1).
125. See infra Part II.D.
126. See cases cited infra Part II.D.
127. See DiMatteo, supra note 19, at 1097; see also infra App. A and Part III.B.1.
128. See DiMatteo, supra note 19, at 1097.
129. See Moran v. Prime Healthcare Mgmt., Inc., 208 Cal. Rptr. 3d 303 (Ct. App.
2016).
130. See, e.g., Grant v. Trinity Health-Mich., 390 F. Supp. 2d 643 (E.D. Mich. 2005).
131. See Holland v. Trinity Health Care Corp., 791 N.W.2d 724 (Mich. Ct. App.
2011).
132. See Grant, 390 F. Supp. 2d at 643.
133. See, e.g., Geico Indem. Ins. Co. v. Kannaday, No. 6:06-CV-01067, 2007 WL
2990552 (D. Kan. Oct. 11, 2007); Burton v. William Beaumont Hosp., 347 F. Supp. 2d
486 (E.D. Mich. 2005); Kizzire v. Baptist Health Sys., 343 F. Supp. 2d 1074 (N.D. Ala.
2004).

all three cases upheld the contract.134
Similarly, the Third Circuit has
looked at duty of good faith and fair dealing, fiduciary duty, and
statutory protections for uninsured patients charged higher rates than
insured ones.135
Yet again, unconscionability was never considered as a
possible defense, and the court upheld the validity of the contract.136
The limited application of unconscionability to uninsured medical
billing contracts is somewhat puzzling, given adamant scholarly
advocacy to the contrary.137
Uninsured patients receiving more expensive
bills than their insured counterparts is not a new phenomenon.138
Presumably, most of the chargemaster prices given to uninsured patients
are not priced according to the market.139
Yet, few courts have used this
scholarly work to affirmatively apply unconscionability,140
and some
have even used it to support denying damages.141
Perhaps unsurprisingly, for the courts that do consider
unconscionability in these medical contexts, the doctrine is often readily
dismissed.142
For example, the Supreme Court of Indiana refused to
impute a reasonable price term into uninsured medical billing contracts,
thereby overturning the court of appeals’ affirmation of
134. See generally Kannaday, 2007 WL 2990552; Burton, 347 F. Supp. 2d; Kizzire,
343 F. Supp. 2d.
135. Dicarlo v. Saint Mary Hosp., 530 F. 3d 255 (3d Cir. 2008).
136. Id. at 260.
137. See generally Obscene Contracts, supra note 10; Hall & Schneider, supra note
101.
138. Obscene Contracts, supra note 10, at 101–04.
139. See Hospital Chargemaster Insanity, supra note 76, at 748–50.
140. Upon performing a Westlaw references check, only seven cases cite George A.
Nation’s unconscionability article, mentioned supra in note 10. Only seventeen cite the
Hall & Schneider article, mentioned supra in note 101.
141. See, e.g., Nassau Anesthesia Assocs. P.C. v. Chin, 924 N.Y.S.2d 252, 255
(Nassau Dist. Ct. 2011).
142. See, e.g., Geico Indem. Ins. Co. v. Kannaday, No. 6:06-CV-01067, 2007 WL
2990552 (D. Kan. Oct. 11, 2007); Colomar v. Mercy Hosp., Inc., No. 05-22409, 2007
WL 2083562 (S.D. Fla. July 20, 2007); Woodrum v. Integris Health, Inc., No.
05CV01224, 2007 WL 201045 (W.D. Okla. Jan. 24, 2007); Quinn v. BJC Health Sys.,
364 F. Supp. 2d 1046, 1053 (E.D. Mo. 2005); Kizzire v. Baptist Health Sys., 343 F.
Supp. 2d 1074 (N.D. Ala 2004); Banner Health v. Med. Sav. Ins. Co., 163 P.3d 1096,
1100 (Ariz. Ct. App. 2007); Morrell v. Wellstar Health Sys., Inc., 633 S.E.2d 68, 72 (Ga.
Ct. App. 2006); Allen v. Clarian Health Partners, Inc., 980 N.E.2d 306 (Ind. 2012);
Holland v. Trinity Health Care Corp., 791 N.W.2d 724, 728 (Mich. Ct. App. 2010);
Shelton v. Duke Univ. Health Sys., Inc., 633 S.E.2d 113, 116 (N.C. Ct. App. 2006);
Limberg v. Sanford Med. Ctr., 881 N.W.2d 658 (N.D. 2016); Firelands Reg’l Med. Ctr.
v. Jeavons, No. E-07-068, 2008 WL 4408600, at *3 (Ohio Ct. App. 2008); Nygaard v.
Sioux Valley Hosps. & Health Sys., 731 N.W.2d 184, 191–93 (S.D. 2007); Doe v. HCA
Health Servs. of Tenn., Inc., 46 S.W.3d 191, 194 (Tenn. 2001); Woodruff v. Fort Sanders
Sevier Med. Ctr., No. E2007-00727-COA-R3CV, 2008 WL 148951, at *3 (Tenn. Ct.
App. Jan. 16, 2008).

The Supreme Court of South Dakota has done
likewise, affirming dismissal of an unconscionability claim.144
Justification for dismissal of unconscionability in medical contexts is
fairly uniform across courts,145
where the primary concern is the notion
that the market for health care is unique.146
Understandably, there is often
concern for judicial determinations upending an intricate and delicately
balanced market.147
Additionally, determining precise prices prior to
treatment is often impractical and cumbersome, meaning patients only
have a nebulous idea of a procedure’s cost going into (often medically
necessary) treatment.148
Notwithstanding the indefinite nature of
chargemaster pricing, courts have typically permitted “low levels of
specificity in medical contracts.”149
Uninsured patients also are known to
bring unconscionability claims as plaintiffs, to which courts are typically
unreceptive.150
Also of concern is the notion that unconscionability contradicts the
“freedom to contract.”151
Courts have long been wary of imposing terms
upon contracting parties, and unconscionability necessarily imposes
“reasonable terms” upon the parties.152
Nevertheless, unconscionability
has been widely accepted by courts and legislatures,153
arguably
143. See cases cited supra note 142.
144. See Nygaard, 731 N.W.2d at 197.
145. See id.; Dicarlo v. Saint Mary Hosp., 530 F.3d 255, 255 (3d Cir. 2008); Allen, 980
N.E.2d at 306; see also cases cited supra note 142.
146. Allen, 980 N.E.2d at 311.
147. Id.
148. Id. at 310 (“[O]mitting a specific dollar amount is ‘the only practical way in
which the obligations of the patient to pay can be set forth, given the fact that nobody yet
knows just what condition the patient has, and what treatments will be necessary to
remedy what ails him or her.’”). Without knowledge of medical pricing prior to
procedure, patients are unable to compare competitive prices across the marketplace. See
Obscene Contracts, supra note 10, at 134.
149. See Hall & Schneider supra note 100, at 674.
150. See Nygaard v. Sioux Valley Hosps. & Health Sys., 731 N.W.2d 184, 195 (S.D.
2006) (“[T]he equitable theory of unconscionability has never been utilized to allow for
the affirmative recovery of money damages.” (quoting Cowin Equip. Co., Inc., v. Gen.
Motors Corp., 734 F.2d 1581, 1582 (11th Cir. 1984))).
152. See supra Parts II.A, II.B.
153. See Obscene Contracts, supra note 10, at 108–09; see also, e.g., Williams v.
Walker-Thomas Furniture Co., 350 F.2d 445, 449 (D.C. Cir. 1965) (“[W]hether a
meaningful choice is present in a particular case can only be determined by consideration
of all the circumstances surrounding the transaction. In many cases the meaningfulness of
the choice is negated by a gross inequality of bargaining power.”). All fifty states have
adopted at least part of the U.C.C., and only Louisiana has neglected to adopt article 2.
Commercial Law Research Guide, GEO. L. LIBR. (Apr. 1, 2020, 2:41 PM),
http://guides.ll.georgetown.edu/commerciallaw/ucc

promoting the “freedom to contract” in the process.154
Unconscionability
only works where courts acknowledge that “freedom to contract” is not
absolute.155
Accordingly, with the pervasive acceptance of
unconscionability, arguments about unconscionability contradicting the
“freedom to contract” necessarily fail.156
Very few courts have actually extended unconscionability to the
medical billing context.157
In Moran v. Prime Healthcare
Management,158
an uninsured patient challenged hospital services
charged at grossly excessive rates.159
But unlike the foregoing cases,160
the court found both procedural and substantive unconscionability.161
The fact that all patients had to agree to chargemaster pricing before
treatment was sufficient for procedural unconscionability,162
and the cost
of care far exceeding market prices (by four to six times) was sufficient
for substantive unconscionability.163
III. ANALYSIS
A. Unconscionability Unequivocally Applies to Many Medical Billing
Contracts
Despite the courts’ systematic denial of unconscionability,
unconscionability should apply to many medical billing contracts,
particularly those issued to uninsured patients.164
In order for
unconscionability to apply, a patient must demonstrate substantive and
procedural unconscionability.165
Additionally, there is the judicially-
imposed requirement of the patient being a consumer.166
With the
[http://web.archive.org/web/20200422160949/http://guides.ll.georgetown.edu/commercia
llaw/ucc].
154. See Obscene Contracts, supra note 10, at 108 (citing Williams, 350 F.2d at 449).
155. See id. at 108–09, 123–24.
156. See id.
157. See Moran v. Prime Healthcare Mgmt., Inc., 208 Cal. Rptr. 3d 303, 303 (Ct. App.
2016).
158. Compare id., with cases cited supra Part II.D.
159. See Moran, 208 Cal. Rptr. 3d at 303.
160. Compare id., with cases cited supra Part II.D.
161. Moran, 208 Cal. Rptr. 3d at 316.
162. Id.
163. Id. at 315–16.
164. See Obscene Contracts, supra note 10.
165. See supra Part II.B (discussing modern requirements of unconscionability).
166. See supra Part II.B.

exception of a few outlying courts, this is all a patient must prove to
succeed on a claim of unconscionability.167
First and foremost, there is a strong argument that patients are
categorically consumers.168
Just like a consumer shopping for a car,
patients have the ability to select hospital systems, doctors, and the price
of services they seek.169
However, patients are typically more vulnerable
than most consumers in other markets.170
The healthcare market is
notoriously precarious and difficult to traverse, particularly for uninsured
patients.171
Courts have typically used unconscionability for protecting
vulnerable consumers;172
accordingly, it would seem disingenuous to
preclude a patient’s unconscionability claim solely on the ground that
they are not a consumer.173
Additionally, many medical billing contracts issued to uninsured
patients satisfy the procedural requirement of unconscionability.174
Procedural unconscionability turns on the overall bargaining power of
the two contracting parties.175
In the case of an uninsured patient seeking
medical services, this element is frequently present.176
Particularly where
uninsured patients seek urgent or emergency medical services,
procedural unconscionability is even more heightened.177
Even in non-
emergency scenarios—and even with the advent of public
chargemasters—there is little predictive information available to
prospective patients prior to their treatments.178
In most cases, patients
must receive their treatment before learning anything of its costs or their
167. See supra Part II.B.
168. See generally Hall & Schneider, supra note 101; see also Nancy Tomes, Patients
or Health-Care Consumers? Why the History of Contested Terms Matters, in HISTORY
AND HEALTH POL’Y IN THE U.S. 83 (Rosemary A. Stevens et al. eds., Rutgers Univ. Press
2006).
169. See generally Hall & Schneider, supra note 101.
170. Id. at 646, 651.
171. Id. at 649–50.
172. Id. at 646.
173. Id. at 675–78.
175. See supra notes 52–54 and accompanying text.
177. George Nation states:
The overriding factor . . . in finding hospital admission contracts procedurally
unconscionable is that urgent medical services are necessities . . . . Thus, even
if a patient understands the terms in the hospital admission contract and decides
he does not want to agree to them, he is in no position to shop for an alternative
. . . .
Obscene Contracts , supra note 10, at 112.
178. See supra Part II.C (discussing the inherent difficulty of interpreting
chargemasters).

legal obligations.179
Furthermore, most hospital admission contracts
require patients to agree to the hospital’s “full charges,” which often
amount to far more than charges issued to insured patients.180
Where
patients do not understand they are agreeing to pay the chargemaster’s
full price, have little opportunity to fully read the billing agreement, or
have no choice but to accept the terms because of pressing medical
needs, there is a strong case for procedural unconscionability.181
Similarly, many medical billing contracts satisfy the substantive
requirement of unconscionability.182
Substantive unconscionability turns
on the reasonability of a contract’s terms or duties.183
In the context of
medical billing for the uninsured, this typically comes in the form of
unreasonably exorbitant cost.184
Surely, not all chargemaster prices are so
unreasonable as to warrant unconscionability.185
However, it does not
seem irrational to think that a $719,479 out-of-pocket charge for a “heart
transplant or implant of heart assist system w mcc” might be
unreasonable,186
or that a $469,905 charge for a “lung transplant” might
be unreasonable.187
Seemingly, such prices would at least approach
substantively unconscionable terms.188
Continuing along with these examples, both heart and lung
transplants are relatively common189
and frequently must occur within
179. Obscene Contracts, supra note 10, at 112.
180. Id.
181. Id. at 110–13.
182. Id. at 113–15.
185. See, e.g., Common Lab Services, UNIV. OF MICH. MED. (Apr. 2020),
http://www.med.umich.edu/pdf/price-transparency/mm-lab-testing-uninsured.pdf
[http://web.archive.org/web/20200422161622/http://www.med.umich.edu/pdf/price-
transparency/mm-lab-testing-uninsured.pdf]. Surely, an uninsured patient would have a
difficult time arguing that a discounted $66.80 renal function blood panel (or a $52.80
discounted lipid panel, for instance) is unreasonably priced. Compare id., with Heather P.
Whitley, et al., Selecting an A1C Point of Care Instrument, 28 DIABETES SPECTRUM 201,
201–08 (Aug. 2015) (examining various A1C home-testing devices, some priced as low
as $40 and others upwards of $2,000 to $3,000 dollars).
186. Michigan Medicine Standard Charges, supra note 120.
187. See id.
188. Compare charges listed in supra note 185, with examples from Obscene
Contracts, supra note 10, at 101–04.
189. Mayo Clinic Staff, Heart Transplant, MAYO CLINIC (Nov. 16, 2019),
https://www.mayoclinic.org/tests-procedures/heart-transplant/about/pac-20384750
[http://web.archive.org/web/20200422162716/https://www.mayoclinic.org/tests-
procedures/heart-transplant/about/pac-20384750] (stating that at any given time in the
U.S., there are approximately 3,000 people awaiting heart transplants); see also Organ
Procurement and Transplantation Network, U.S. DEPT. OF HEALTH & HUM. SERVS. (Jan.
30, 2019), https://optn.transplant.hrsa.gov/data/view-data-reports/national-data/#

time constraints.190
It is also not unheard of to require both heart and lung
transplants simultaneously.191
When an insured patient receives such
lifesaving procedures, cost typically is not a preclusive factor192
—
ultimately, their insurance company will negotiate with the hospital
based on these chargemaster prices.193
However, should an uninsured
patient be admitted to the University of Michigan Hospital in need of one
of these lifesaving procedures, these are the starting prices the hospital
will work with: a $719,479 out-of-pocket charge for a heart transplant
and a $469,905 charge for a lung transplant.194
Is it reasonable to require
an uninsured patient (who is already more likely to be of lower
socioeconomic status than an insured counterpart195
) to pay hundreds of
thousands of dollars out-of-pocket where (1) they do not know what the
exact, final price is until after the procedure; and (2) the procedure is,
quite literally, necessary?196
All things considered, unconscionability should apply in many
billing contracts issued to the uninsured.197
The whole point of
unconscionability is to protect vulnerable consumers from grossly
inequitable contracts, particularly where they have little choice in the
matter.198
Regardless of the procedure, treatment, or health condition,
uninsured populations are more likely to suffer from adverse medical
[http://web.archive.org/web/20200422162752/https://optn.transplant.hrsa.gov/data/view-
data-reports/national-data/] (stating that there are over 1,200 people in the U.S. currently
awaiting lung transplants); Ashley Welsch, How Do Medical Bills Get so High? The
Story Behind One Man’s $109,000 Bill After a Heart Attack, CBS NEWS (Aug. 29, 2018,
3:49 PM), https://www.cbsnews.com/news/how-do-hospital-bills-get-so-high/
[http://web.archive.org/web/20200422163223/https://www.cbsnews.com/news/how-do-
hospital-bills-get-so-high/]. Notably, this patient’s bill was issued despite his insurance
covering some of the cost. Id.
190. United Network for Organ Sharing Data, U.S. DEPT. OF HEALTH & HUM. SERVS.
(Jan. 30, 2019), https://unos.org/data/
[http://web.archive.org/web/20200422163253/https://unos.org/data/] (stating that in 2016
alone, almost 7,000 people died while awaiting organ transplants).
191. Yoshida Toyoda et al., Heart-Lung Transplantation: Adult Indications and
Outcomes, 6 J. OF THORACIC DISEASE 1138, 1138–42 (Aug. 2014).
192. Obscene Contracts, supra note 10, at 112 (stating that uninsured patients
frequently pay many times more than insured patients do for medical services, in part
because insurers negotiate for reasonable prices on behalf of their clients).
193. Id. at 118–19.
194. See sources cited supra note 185.
195. U.S. INST. OF MED. COMM. ON THE CONSEQUENCES OF UNINSURANCE, COVERAGE
MATTERS: INSURANCE AND HEALTH CARE 59–80, 96–98 (2001).
196. See generally Obscene Contracts, supra note 10.
197. See id.
198. See supra notes 10, 13–14 and accompanying text; see also 17 C.J.S. Contracts
§ 3 (2018); 17A AM. JUR. 2D Contracts § 272 (2020).

conditions and more likely to have difficulty paying for them.199
Unfortunately, there has seldom been effective judicial relief for
uninsured patients in such circumstances.200
The scenarios mentioned
above satisfy the necessary elements of unconscionability, and
accordingly, they should apply to uninsured patients in such
predicaments.201
B. Plausible Explanations for Courts’ Reluctance to Adopt
Unconscionability in Medical Billing Contracts
There are two reasons why courts may be reticent to adopt
unconscionability in medical billing contexts: the first and most notable
of these stems from common law tradition, in that courts have generally
abstained from weighing the consideration of contracts.202
The second
explanation is that courts do not want to upend a highly complex and
convoluted healthcare market, which may happen as a result of ruling
medical billing contracts unconscionable.203
Both present commonsense
explanations for the practice that ultimately fail on their merits.204
1. Common Law Principles Against Weighing Consideration
Inadequately Explain the Courts’ General Reluctance to Find
Uninsured Patients’ Medical Billing Contracts Unconscionable
Courts have uniformly applied U.C.C. § 2-302 unconscionability and
common law unconscionability across a diverse range of cases.205
This
same application would extend to medical billing of the uninsured, which
also falls under the common law of contracts.206
However, for a
multitude of reasons, it does not.207
199. See generally Charles Marwick, For the Uninsured, Health Problems Are More
Serious, 94 J. OF THE NAT’L CANCER INST. 967, 967–68 (July 3, 2002); see also U.S. INST.
OF MED. COMM. ON THE CONSEQUENCES OF UNINSURANCE, supra note 195.
200. See supra Part II.D (discussing how modern courts have applied
unconscionability to medical billing contracts).
201. See supra Part II.A; see also Obscene Contracts, supra note 10.
202. See infra Part III.B.1; see also 17 C.J.S. Contracts §§ 175–78 (2020).
203. See discussion infra Part III.B.2.
204. See discussion infra Parts III.B.1, III.B.2.
205. See discussion infra Part III.B.1; see also Larry A. DiMatteo, supra note 19, at
1085, 1115.
206. See discussion infra Part III.B.1; see also App. A.
207. See App. A.

Weighing consideration is a necessary step in determining whether a
medical billing contract is substantively unconscionable208
—essentially,
the court must weigh the value of medical services rendered against the
actual cost charged to an uninsured patient.209
This is something that
courts are exceedingly reluctant to do for contracts, as it contradicts
centuries of common law precedent.210
U.C.C. § 2-302 provides a
statutory mechanism for circumventing this precedent.211
However,
under the common law, no such mechanism exists, aside from
invalidating contracts against public policy interests—something that is
infrequently applied and usually disfavored by the courts.212
Accordingly, it would make sense if courts favored the common law
practice of refusing to weigh consideration over the comparatively new
doctrine of common law unconscionability.213
Because medical billing
contracts fall under the common law, and not the U.C.C., this reasoning
should also extend to medical billing unconscionability cases.214
However, if the courts’ ardent preference for common law
consideration accurately explained unconscionability’s inapplicability to
medical billing contracts, it should follow that all common law
unconscionability cases are under-applied.215
In other words, U.C.C. § 2-
302 unconscionability claims should be affirmed more frequently than
common law unconscionability contracts because all common law
unconscionability cases—not just medical billing ones—contradict
common law principles against weighing consideration.216
Comparatively, the statutory construction of U.C.C. § 2-302 permits
circumvention of common law principles against weighing
consideration,217
resulting in a more frequent application of statutory
Regrettably, this is not the case.219
Courts have uniformly applied
unconscionability under the U.C.C. and common law.220
However, for
208. See DiMatteo, supra note 19, at 1091 (stating that “per se unconscionability”
occurs where consideration for a contract is imbalanced).
209. See discussion on substantive unconscionability supra Parts II.A, II.B.
211. See U.C.C. § 2-302 (AM. LAW INST. & UNIF. LAW COMM’N 1977).
212. See, e.g., G. Richard Shell, Contracts in the Modern Supreme Court, 81 CALIF. L.
REV. 431 (1993).
213. See cases cited supra Part II.D.
214. Id.
215. See App. A.
216. See id.
218. See App. A.
219. See id.
220. See id.; see also DiMatteo, supra note 19, at 1115–16.

one particularized subset of the common law—in medical billing of the
uninsured—they have uniformly under-applied it.221
This means that
courts’ refusal to adopt unconscionability for uninsured patients does not
stem from the common law practice of refusing to weigh consideration,
as they regularly weigh consideration in other contexts of common law
2. Maintaining the Status Quo of the Healthcare Market Is an
Inadequate Justification for Refusing to Utilize Unconscionability on
Inequitable Billing Contracts
A typical maneuver for courts addressing unconscionability in the
medical billing context is to avoid rocking the boat.223
They frequently
offer dismissive justifications for their decisions, citing a “complex”
healthcare marketplace,224
judicial deference to the legislature,225
or
insufficient understanding to make an informed decision.226
Looking at a microcosm of these cases seems to confirm this judicial
reticence.227
In the Supreme Court of Indiana, for instance, the court
noted how “courts have generally tolerated low levels of specificity in
medical contracts.”228
Furthermore, the court rationalized the status quo:
imprecise dollar amounts are “the only practical way in which the
obligations of a patient to pay can be set forth . . . .”229
Ultimately, the
court affirmed chargemasters as “not indefinite” and claimed such a
decision “recognized the uniqueness of the market for health care.”230
This thinking has curiously worked its way into other courts as
well.231
In the Third Circuit, the court deferred on the issue by affirming
a district court opinion that stated “courts are ill-equipped to determine
what reasonable hospital costs are.”232
Seemingly agreeing with this
statement, the Third Circuit did not even attempt to compare prices
between insured patients and uninsured patients.233
This is despite the
221. See App. A.
222. See discussion supra Parts II.A, II.D.
223. See discussion and cases supra note 142.
224. See, e.g., Allen v. Clarian Health Partners, Inc., 980 N.E.2d 306, 310–11 (Ind.
2012).
225. See, e.g., Dicarlo v. Saint Mary Hosp., 530 F.3d 255, 259–60 (3d Cir. 2008).
226. See, e.g., id. at 264.
227. See cases cited supra Parts II.A, D.
228. Allen, 980 N.E.2d at 310 (quoting Hall & Schneider, supra note 101, at 674).
229. Id. (quoting Dicarlo, 530 F. 3d at 264).
230. Id. at 311.
231. See cases cited supra notes 224–30.
232. Dicarlo v. Saint Mary Hosp., 530 F.3d 255, 259 (3d Cir. 2008).

fact, as discussed above, that unconscionability is suitable for many of
these cases.234
Courts regularly impute reasonable prices on contracts
they know nothing about, such as “gap-fillers” in U.C.C. § 2-305.235
Similarly, the Michigan Court of Appeals has held that reference to a
chargemaster (in a patient billing contract) is a sufficiently unambiguous
price term for a valid contract.236
According to the court, “patients’
expectations are reasonably based on [a hospital’s chargemaster].”237
Notably, the court failed to inquire into whether these charges were
objectively reasonable or not.238
All the foregoing cases either dismissed unconscionability or failed
to address it entirely,239
and it is this Note’s contention that the preceding
justifications are uncompelling.240
The healthcare market is undoubtedly complex;241
but so too is the
automotive supply chain, the tech industry, and the pharmaceutical
industry—all of which are markets the courts regularly entertain.242
Where these contracts fall under the U.C.C., § 2-305 dictates that courts
may impute a reasonable price term into a contract.243
Although medical
billing contracts do not fall under the U.C.C., explicit price terms are
usually required at common law to demonstrate the existence of a
contract.244
Here, in medical billing contracts, they are definitionally
inexplicit.245
The complexity of a given market should not be dispositive
of whether a court can handle the case;246
rather, it is the explicit
province of the courts to do the exact opposite of that.247
Courts are
234. See discussion supra Part III.A.
235. See, e.g., Pulprint, Inc. v. Louisiana-Pacific Corp., 477 N.Y.S.2d 540 (N.Y. Sup.
Ct. 1984); see also U.C.C. § 2-305 (AM. LAW INST. & UNIF. LAW COMM’N 1977).
236. Holland v. Trinity Health Care Corp., 791 N.W.2d 724, 729 (Mich. Ct. App.
2011).
237. Id. at 730.
239. See cases cited supra Part II.A.2.
240. See discussion supra Part II.A.2.
241. See Hall & Schneider, supra note 101.
242. See, e.g., Exxon Corp. v. Middleton, 613 S.W.2d 240, 249 (Tex. 1981) (“The
complexity of the oil and gas industry makes it difficult to establish a formula to
determine the market value of gas in each field in Texas.”). The court went on to reverse
and remand the case with particular determinations on oil market value. Id. at 252.
243. U.C.C. § 2-305 (AM. LAW INST. & UNIF. LAW COMM’N 1977).
244. Nellie Eunsoo Choi, Note, Contracts with Open or Missing Terms Under the
Uniform Commercial Code and the Common Law: A Proposal for Unification, 103
COLUM. L. REV. 50, 50–51 (2003).
245. See discussion on chargemasters supra Part II.C.
246. See, e.g., Middleton, 613 S.W.2d at 249.
247. Marbury v. Madison, 5 U.S. 137, 177 (1803) (“It is emphatically the province and
duty of the judicial department to say what the law is.”).

supposed to interpret the law, regardless of any underlying complexity.248
Plus, if courts find an issue too complex, how can they reasonably expect
uninsured patients to understand it any better?249
There is legitimate concern that judicial rulings to the contrary could
potentially upend the medical marketplace.250
Perhaps, as a consequence
of ruling that certain medical billing contracts are unreasonable, the
whole medical billing system would unravel.251
Perhaps it would
completely change insurance premiums and quality of care.252
But in any
case, it is not the courts’ job to reverse engineer decisions on speculative
doomsday scenarios.253
It is the courts’ job to apply the law as given,254
and the law of unconscionability seems to fit many medical billing
contexts quite well.255
Additionally, hospitals claim that uninsured
patients rarely pay full chargemaster pricing.256
If so, invalidity of the
few contracts that do pay full price would hardly threaten the sanctity of
the healthcare market.257
Certainly, not all medical billing contracts are so exorbitant as to be
unconscionable.258
However, for the ones that are arbitrary in nature, that
have no justification other than the decrees of a chargemaster, or that are
only discernible after a patient receives treatment, unconscionability
should preclude the enforceability of such contracts.259
IV. CONCLUSION
Unquestionably, unconscionability should apply to many exorbitant
medical billing contracts. The requisite elements of both procedural and
substantive unconscionability are surely satisfied where indigent,
uninsured patients (1) need medical treatment out of necessity; (2) cannot
easily ascertain prices from public chargemasters; (3) are not informed of
the final cost until after the hospital administers its services; and (4) are
contractually bound to medical contracts with astronomical costs. Courts
should not address such cases with reluctance for fear of causing tumult
in the medical marketplace—such fear is not unique or inherent to the
248. Id.
249. See generally Obscene Contracts, supra note 10, at 115–24.
250. Allen v. Clarian Health Partners, Inc., 980 N.E.2d 306, 310 (Ind. 2012).
251. Id. at 311.
252. See id.
253. See Marbury, 5 U.S. at 177–78.
254. See id.
255. See supra Part III.A.
256. See Obscene Contracts, supra note 10, at 120.
257. See id.
258. See supra Part III.A.
259. Id.

healthcare market, as court decisions in all markets fundamentally
reshape respective market landscapes. Accordingly, the courts’ reticence
to adopt unconscionability in medical billing contexts is not only
misplaced, but it also disregards the fundamental requirements of
common law.
APPENDIX A: STATISTICAL ANALYSIS ON U.C.C. AND COMMON LAW
APPLICATION OF UNCONSCIONABILITY
A two population-proportion statistic tests a randomly selected
proportion of a population and thereafter extrapolates this proportion
across the rest of the presumably uniformly distributed population.260
By
taking a large enough sample size, the test effectively reduces the
possibility of an unrepresentative sample.261
The first population-
proportion is then compared to another population-proportion, thereby
assessing causal relationships between the two.262
In essence, the
statistical test determines a percentage chance that two population-
proportions causally differ.263
Importantly, the “null hypothesis” is that the two population
proportions are equivalent (H0: p1 = p2), while the “alternative
hypothesis” is that the two population proportions are statistically
different (HA: p1 ≠ p2). The “alternative hypothesis” is only true if the
“null hypothesis” can be rejected, and the “null hypothesis” is only
rejected where the two population-proportion test yields statistical
significance. The statistical significance level is frequently set at 5%, or
p = 0.05.264
If a two population-proportion test yields a value less than
5%, then there is sufficient evidence to reject the null hypothesis and
accept the alternative hypothesis. However, if the population-proportion
test yields a value greater than 5%, then the null hypothesis is true (that
is, the two populations are statistically equivalent).265
In comparing the population of U.C.C. § 2-302 case law with the
population of common law unconscionability case law, the null
hypothesis is that courts apply common law unconscionability with the
same frequency as U.C.C. § 2-302 unconscionability, largely because
common law principles prevent courts from weighing consideration.266
260. See PETER GOOS & DAVID MEINTRUP, STATISTICS WITH JMP: HYPOTHESIS TESTS,
ANOVA, AND REGRESSION 205–28 (John Wiley & Sons, Ltd. 2016).
261. Id.
262. Id.
263. Id.
264. Id.
265. Id.
266. See discussion supra Part III.B.1.

Effectively, the null hypothesis is that population 1 (U.C.C.
unconscionability) equals population 2 (common law unconscionability).
The statistical test for comparing two population proportions is as
follows: 𝑍 = 1 2
(1 )(
1
1
1
2
)
where 𝑝1 = the proportion of U.C.C. § 2-302
cases that affirmed unconscionability, 𝑝2 = the proportion of common
law cases that affirmed unconscionability, 𝑛1 = sample size of U.C.C.
§ 2-302 cases, 𝑛2 = sample size of common law unconscionability cases,
𝑝̂ = 1 2
1 2
, and Z = the test statistic.267
A test statistic less than or equal
to -1.6 (or a p-value of less than 0.05—in other words, a less than a 5%
chance that the null hypothesis is true) is considered statistically
significant, meaning that the two population proportions very likely
differ due to causal correlation.268
Out of ninety U.C.C. § 2-302 cases sampled for this study,269
thirty-
three of them affirmed unconscionability as a defense against contract
enforcement (36.67%).270
Out of ninety common law unconscionability
cases sampled, thirty-six of them affirmed the unconscionability defense
(40%).271
These proportions are noticeably similar, and the statistics
agree: where 𝑝1 = 33, 𝑝2 = 36, 𝑛1 = 90, and 𝑛2 = 90, the test statistic, Z
= -0.4599, resulting in a p-value of approximately 0.64552. This fails to
demonstrate statistical significance, meaning the null hypothesis—that
267. See GOOS & MEINTRUP, supra note 260.
268. Id.
269. Cases were randomly sampled using Westlaw and Boolean search terms.
Following the search, cases were screened and included or excluded from the query by
the following method: for U.C.C. § 2-302 cases, the search terms “(U.C.C. 2-302) OR
(Uniform Commercial Code 2-302)” were used. Cases were sorted by relevance. Cases
that were overturned, fell under U.C.C. article 2A or only referenced U.C.C. § 2-302 by
analogy were excluded. The search was then repeated using various combinations of the
above terms, and duplicative cases were disregarded. For common law unconscionability
cases, the search “(‘restatement second contracts’ /s 208) AND (unconscionability OR
unconscionable)” were used. This search was similarly repeated using various
combinations of the above terms and others, to first narrow, then broaden, the search.
Again, cases were sorted by relevance. Cases that concerned sale of goods under the
U.C.C., that were overturned, or were non-dispositive rulings were excluded from the
query (for instance, Hill v. Sisters of St. Francis Health Servs, Inc., No. 06-C-1488, 2006
WL 3783415, at *6 (N.D. Ill. Dec. 20, 2006) states that plaintiff pled a “sufficient”
unconscionability claim but did not go so far as to say the plaintiff’s medical bills were
definitively unconscionable). Cases that discussed unconscionability in medical billing
contexts were collected by a variety of keyword searches, such as “unconsc!,” “med!,”
“hospital,” “bill or billing,” and “uninsured or “patient,” as the body of case law was not
extensive.
270. See supra note 269 for a discussion on how cases were searched, selected, and
screened.
271. See supra note 269.

U.C.C. § 2-302 and common law unconscionability are equivalently
applied—remains true. Accordingly, the alternative hypothesis—that
U.C.C. § 2-302 and common law unconscionability are not equivalently
applied—is rejected.
At a 95% confidence interval, the true population proportion value
for 𝑝1 is equivalent to 𝑝1 ± 𝑧 1(1 1)
1
, where z = 1.96 (and same for
𝑝2, just with the common law cohort).272
This means that the true value
for 𝑝1 is 𝑝1 ± 0.10 cases and the true value for 𝑝2 is 𝑝2 ± 0.10 cases.
Even on the outer margins of these confidence intervals, both would still
yield statistically insignificant values. Accordingly, it is statistically
unlikely that courts are applying U.C.C. § 2-302 unconscionability
differently than common law unconscionability. This independent
finding appears well-supported by academic literature.273
This same experiment can be conducted between common law
unconscionability (generally) and common law unconscionability in the
medical billing context. Presumably, medical billing contracts are both a
subset of common law contracts, so there should be no substantive
difference between how the two are applied.274
Therefore, the null
hypothesis (H0: p1 = p2) underlying the preceding presumption is that the
population proportion of common-law unconscionability cases and the
population proportion of medical billing unconscionability cases are
equivalent (i.e., courts apply the two case populations uniformly). The
alternative hypothesis (HA: p1 ≠ p2) is that the two populations are
statistically different and, therefore, not uniformly applied.
Again, out of ninety common law unconscionability cases sampled,
thirty-six of them affirmed the unconscionability defense (40%).
Comparatively, out of twenty-three medical billing cases concerning the
uninsured, only one of them affirmed an unconscionability defense
(4.35%). This is a stark discrepancy, and the statistics again support such
a finding.
The statistical test for comparing two population proportions is again
the same, 𝑍 = 1 2
(1 )(
1
1
1
2
)
where 𝑝1 = the proportion of common law
cases that affirmed unconscionability (generally), 𝑝2 = the proportion of
medical billing cases that affirmed unconscionability, 𝑛1 = sample size of
common law cases, 𝑛2 = sample size of medical billing cases that dealt
273. See DiMatteo, supra note 19.
274. See discussion supra Part III.B.2.

with unconscionability, 𝑝̂ = 1 2
1 2
, and Z = the test statistic.275
Notably,
any medical billing unconscionability cases in cohort 𝑝1 were excluded
to prevent overlap between the two populations, as were overturned
rulings. Where 𝑝1 = 36, 𝑝2 = 1, 𝑛1 = 90, and 𝑛2 = 23, the test statistic, Z
= 3.25164, resulting in a p-value of 0.00116, or 0.116%. This is a
statistically significant result, as p < 0.05 and is sufficient grounds to
reject the null hypothesis that courts uniformly apply common law
unconscionability cases and medical billing unconscionability cases.
Accordingly, the alternative hypothesis is accepted, in that there is a
statistically significant difference in how courts apply common law
unconscionability generally and common law unconscionability in
medical contexts.
Even using a 95% confidence interval, the true value for 𝑝1 is 𝑝1 ±
0.101 cases, while the true value for 𝑝2 is 𝑝2 ± 0.0833 case. On the
outskirts of either confidence interval, there is still sufficient evidence to
reject the null hypothesis that courts uniformly apply common law
unconscionability and medical billing unconscionability.
Accordingly, there is a 0.116% chance that the discrepancy between
these two population-proportions is due to chance. This stands in great
contrast to the previous experiment, where U.C.C. § 2-302
unconscionability and common law unconscionability were statistically
uniform in their application. In other words, there is a statistically
significant difference between how courts have applied common law
unconscionability generally and common law unconscionability in
medical billing of the uninsured.

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