Lawsuit alleges hospitals overcharged uninsured patients – Part 1

Ohio residents may be interested in a lawsuit being heard by the State Supreme Court of our neighbors to the west. The case involves one of the state’s largest hospital groups, which is being sued by two uninsured patients claiming the hospital charged them much more than it charged insured patients for the same care. The case addresses 120 years of common law that states a contract for services that do not specifically set a fee or price requires the bill to be “reasonable.” Reasonable could be defined as what it charges other customers for the same services.

The claims in the breach-of-contract suit involve only a few thousand dollars, however much more is at stake should the plaintiffs prevail. A verdict in their favor could lead to numerous class-action lawsuits not only for our neighbors, but for other hospitals in the region as well. According to one trial lawyer involved in the case, patients could potentially sue for billions of dollars going back as far as ten years.

In fact, that is the goal, according to the lawyer for the plaintiffs. He wants to turn the lawsuit into a class-action suit open to hundreds of uninsured patients who may have been overbilled by the hospital group over the past ten years. He also wants to target other area hospitals beyond the hospital group named in the suit scheduled to be heard by the Indiana Supreme Court next week. Claims for damages could reach millions of dollars. If the suit succeeds, these other hospitals will hear from us, he said.

The president of the state’s hospital association said the lawsuit is a big concern for its members so it filed a friend-of-the-court brief with the Supreme Court in support of the hospital group’s legal stance. The case is the first to be heard by the Supreme Court addressing the legalities of hospitals charging uninsured patients more than it charges insured patients, according to other attorneys involved in the case.

A new federal law now requires hospitals to charge uninsured patients similar rates to what it charges insured ones, which has lead many hospitals to offer discounts based on the rates it charges commercial insurance companies as well as Medicare. However, the new federal guidelines do not deny patients the right to sue over the past practice of overcharging uninsured patients.

Watch for next week’s post for specific information on the details of the plaintiffs’ case, as well as what some attorneys think the chances of the cases prevailing or reaching a class-action status.

Source:  IndyStar.com, “Uninsured patients’ lawsuit carries high stakes for area hospitals,” Jeff Swiatek, April 29, 2012