## Facts

- Jared Neumeier received medical services from Dr. Eric G. Baird in late 2012 and provided Blue Cross of Idaho insurance information, expecting the bill would be submitted to insurance.
- The provider’s office failed to submit the bill to insurance, billed Neumeier directly, and sent billing communications to an incorrect address.
- In April 2014, the provider’s billing agent assigned the account to Medical Recovery Services, L.L.C. (MRS), a licensed collection agency, transferring the provider’s contractual rights and claim for payment.
- MRS also sent collection communications to the wrong address; Neumeier did not receive any demand or notice about the 2012 charges during this period.
- In April 2015, MRS mailed a single FDCPA-style notice letter to Neumeier’s correct address listing an amount due and identifying MRS as the creditor, but it did not identify the provider or connect the debt to a specific treatment or bill.
- After opening the letter, Neumeier contacted the provider, which discovered the bill had never been submitted to insurance and stated the account had been assigned to MRS.
- On the same day, MRS filed suit in magistrate court seeking $1,891.37, including principal, statutory prejudgment interest, and attorney’s fees and costs.
- The provider then submitted the bill to insurance; insurance paid all but a $42 copayment, and the provider waived the copayment, reducing the principal obligation to zero.
- MRS refused to dismiss the lawsuit, maintaining it was still entitled to prejudgment interest.

## Issues

1. Whether an assignee of a medical provider may recover statutory prejudgment interest from a patient when the provider failed to submit the bill to the patient’s insurer and failed to give meaningful notice of a personal payment obligation.
2. Whether the patient’s payment obligation was subject to an implied condition precedent requiring the provider to submit the claim to insurance before the patient could be treated as in default.
3. Whether prejudgment interest may be awarded after the underlying principal medical charge was satisfied through insurance (and any copayment was waived), leaving only an interest claim.

## Decision

- The Idaho Supreme Court affirmed the district court’s decision affirming the magistrate court.
- The Court upheld dismissal of MRS’s action and the ruling that MRS was not entitled to prejudgment interest under these facts.
- The Court left in place the lower courts’ determinations that the collection claim could not proceed once the underlying medical charge was satisfied and interest was not recoverable.

## Legal Principles

- An assignee asserting contractual rights to collect a debt generally takes no greater rights than the assignor and remains subject to the same contractual limits and conditions affecting enforceability.
- Prejudgment interest presupposes an enforceable underlying obligation with a legally cognizable due date and default; where the alleged delinquency stems from the creditor’s billing and notice failures, interest may be denied.
- A payment obligation arising from a provider–patient arrangement may be subject to an implied-in-fact condition precedent tied to customary insurance-billing practices; if the condition is not met, the patient may not be liable as though in default for purposes of interest.
- Where the principal medical charge is satisfied through insurance and no remaining principal is owed by the patient, a standalone claim for prejudgment interest may be rejected when the asserted default was not properly triggered.

## Conclusion

The Idaho Supreme Court affirmed dismissal of a collection agency’s suit seeking prejudgment interest after insurance satisfied the medical bill, holding that the assignee could not recover interest where the provider and collector’s billing and notice failures prevented an enforceable patient default and the principal obligation was extinguished.


Med. Recovery Servs., L.L.C. v. Neumeier, 163 Idaho 504, 415 P.3d 372 (Idaho 2018)