Home | Business News | Browse by Publication | M | Modern Healthcare

CHARITABLE OBLIGATIONS; Both sides declare victory in uninsured billing settlements. Will more systems settle rather than fight it out in court?

Article Excerpt
Byline: Cinda Becker

The seemingly intractable legal dispute between not-for-profit hospitals and plaintiffs' attorneys over the billing of the uninsured budged in recent weeks with a spate of settlements at West Coast health systems, but the vitriol has not subsided.

While the plaintiffs claimed a decisive victory in their efforts to moderate the allegedly inflated pricing of hospital bills for the uninsured, the hospitals insisted they emerged from the legal quagmire with their pride fully intact and their existing charity-care policies fundamentally unchanged.

"The sad fact is once the judge certifies a class, defense expenses are so high, it's cheaper to settle than to litigate and win,'' said P. Campbell Groner, senior vice president and chief legal officer at Legacy Health System, Portland, Ore., which reached a settlement with uninsured patients in July. "We just knew it would be a large amount of money and the actual damages were not going to be significant. ... It becomes cheaper to settle and pay a small amount of damages than to litigate and win.''

In June, 17-hospital Providence Health System trail-blazed the industry, announcing final approval in a Portland state court to a settlement in a lawsuit involving its seven Oregon hospitals that "affirmed that (the system's) charity-care and financial assistance policies are `fair, just and reasonable,' '' according to a news release. Four-hospital Legacy followed in July with the announcement of a preliminary settlement affecting its three Oregon hospitals with terms similar to Providence's that are expected to be completed in March 2007.

Most recently, Sutter Health, Sacramento, Calif., announced a settlement affecting all of its 25 Northern California hospitals that, among other things, guarantees automatic discounts to the uninsured, regardless of income, for at least three more years....