Request By:
Chester P. Care, Esq.
Public Administrator of Fayette County
First National Building, Suite 406
Lexington, Kentucky 40507
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Thomas R. Emerson, Assistant Attorney General
This is in response to your letter stating that you are frequently called upon to pay the creditors of estates referred to you and you have encountered a problem relating to the priority of payment with respect to such creditors.
You state that the statute provides that hospital bills incurred within a year prior to the death of the decedent shall receive priority over other debts of the deceased. Your question concerns whether the statute includes all medical expenses incurred during that period, including the bills of physicians and other types of medical specialists. Since many types of spectial services in additon tof primary hospital care, phyaicians and other types of medical specialists. Since many hospitals bill for physicians, X-ray technicians and other types of special services in addition to primary hospital care, it is difficult to distinguish between these services when attempting to establish a priority.
In your opinion it is necessary to examine the intent of the statute and the public policy involved in order to arrive at a reasonable interpretation. You think that the intent may be to insure payment for medical "treatment" received prior to death so that an individual will not have difficulty in obtaining such service when it is required.
Apparently you are referring to KRS 396.090, concerning preferred claims, which states as follows:
"(1) If the personal estate of a decedent is not sufficient to pay his liabilities, then the burial expenses of the decedent, the cost of the administration of his estate, and the amount of the estate of a dead person, or of a ward, or of a person of unsound mind, committed by a court of record to and remaining in the hands of a decedent, shall be paid in full before any pro rata distribution is made, but this preference shall not extend to a demand foreign to this state.
(2) After the claims described in subsection (1) of this section have been satisfied, hospitals furnishing services, including maintenance, to the decedent within one year preceding his death shall have a preferred claim on any residue of the decedent's estate, to the extent of the costs of such services. All other debts and liabilities shall be of equal dignity, and paid ratably in the administration of his estate, and if more than the ratable share of any debt is paid, the personal representative shall only receive credit for its proper proportion." (Emphasis supplied. )
After considering the above-quoted statute in its ent,irety it is our opinion that the phrase "hospitals furnishing services" is limited to those services rendered in connection with hospitalization (while the person is actually in the hospital). However, we think that the phrase intended to cover services rendered to in-hospital patients by the hospital staff and its physicians as well as services rendered to in-hospital patients by those physicians permitted by the hospital to practice their profession within that hospital but who may bill independently of the hospital for services rendered.
If, in attempting to answer your question, we confined ourselves to the phrase "hospitals furnishing services," we might possibly arrive at a more narrow interpretation. The courts have, however, stated that it is necessary to look behind the strict wording of the statute to ascertain the purpose of the statute and the problem it is designed to remedy,
George v. Alcoholic Beverage Control Board, Ky., 421 S.W.2d 569 (1967). Furthermore, we should look to the letter and spirit of the statute, viewing it as a whole and we should also look to the circumstances under which it was enacted,
City of Owensboro v. Noffsinger, Ky., 280 S.W.2d 517 (1955).
In
Department of Motor Transp. v. City Bus Co., Ky., 252 S.W.2d 46, 47 (1952), the court said in part:
". . . However, all portions of the statute are related when the purpose and the object of the statute are considered, and we have the right to consider the whole statute when attempting to establish the purpose of it. . . ."
In addition, the court in
George v. Alcoholic Beverage Control Board, Ky., 421 S.W.2d 569 (1967), said that a statute must not be interpreted to bring about an absurd or unreasonable result.
When KRS 396.090 is considered in its entirety in regard to establishing preferred claims, we note that there is no fragmentation where the cost of the administration of the estate and the burial expenses of the decedent are involved. Those costs and expenses in their entirety are preferred. We, therefore, see no reason why services furnished by the hospital to an inhospital patient within one year preceding death should be fragmented and those services not given priority which are furnished by a physician who is permitted to use the hospital facilities but is not directly employed by the hospital. To us, a surgeon's fee for an operation deserves the same priority as the room and board, meals and drugs furnished by the hospital's employes, even though the surgeon is not an employe of the hospital.
Some states have established a priority for expenses of the last illness, the illness that immediately precedes and results in death. While Kentucky's statute is somewhat different than those statutes, the basic principle behind those statutes can be applied to Kentucky's statute. In Succession of Barry, La. App., 236 So.2d 660, 664 (1970), the court said:
"It is only after he has reached the point of inability to attend to his business that the physician and others rendering service in the last illness are given the special privilege against his estate. Humanitarian considerations underlie the granting of this privilege of high rank in favor of those to whom claims are due for services rendered in time of need. In the event of death the physician and others rendering those services are assured that their charges will not be treated as ordinary debts with less favorable chance of payment. This obvious intent is to make it less likely that one will be deprived of much needed service because of doubtful means of payment." (Emphasis supplied. )
Therefore, in our opinion, the phrase "hospitals furnishing services" intended to cover services rendered to in-hospital patients, within one year preceding death, by the hospital staff and its physicians as well as services rendered to such patients within that same time period by those physicians permitted by the hospital to practice at that hospital but who may bill independently of the hospital for services rendered.