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Not-For-Profit Hospitals Class Action Litigation Press Release

Not-For-Profit Hospitals Class Action Litigation Press Release

Date: Thursday, August 26, 2004 at 3:30 PM CDT
Contact: Richard Scruggs
Scruggs Law Firm, P.A.
(662) 281-1212

6 More Class Action Lawsuits Filed Against Nonprofit Hospital Systems and Hospitals by Uninsured Patients Plaintiffs as Part of the Not-For-Profit Hospital Litigation Commenced Since June 17, 2004

For Immediate Release

Oxford, Mississippi, August 26, 2004 - Six more class action lawsuits brought by uninsured patients have been filed against nonprofit hospitals. The nonprofit hospital systems and hospitals named as defendants in the six lawsuits are: Baptist Hospital, Inc. of Pensacola, Florida; Sacred Heart Health System, Inc., Ascension Health of Pensacola, Florida; Protestant Memorial Medical Center, Inc., d/b/a Memorial Hospital of Belleville, Illinois; St. Elizabeth’s Hospital Sisters of the Third Order of St. Francis, d/b/a St. Elizabeth’s Hospital of Springfield, Illinois; The Hospital of the University of Pennsylvania (“HUP”) of Philadelphia, Pennsylvania; and Children’s Hospital of Philadelphia (“CHOP”) of Philadelphia, Pennsylvania. The American Hospital Association (“AHA”) is named as a co-defendant in the Baptist Hospital, Sacred Heart and Ascension, Protestant Memorial and St. Elizabeth’s Hospital litigations.

The lawsuits charge the defendants, and those in which the AHA is also named as a defendant, with failing to fulfill their government obligations to provide charitable healthcare to their uninsured patients in return for which the defendant hospital systems and hospitals receive substantial tax exemptions.

With the filing of these lawsuits, the number of nonprofit hospital systems and hospitals that have been named along with the AHA as defendants in the nonprofit hospital litigation which commenced on June 17, 2004 now involves over 50 uninsured patient class action litigations. These defendants nonprofit hospital systems and hospitals advised by the AHA control well in excess of over 350 hospitals in aggregate.

Specifics about these recent class action lawsuits are as follows:

• In Florida: Defendants: Baptist Health, Inc. and American Hospital Association; The United States District Court for the Northern District of Florida Pensacola Division; litigation filed by Lovelace Law Firm, P.A., Vroon & Crongeyer, LLP, Weisman, Goldberg & Weisman Co., LPA and Barrett Law Office, PA.
• Defendants: Sacred Heart Health Systems, Inc. Ascension Health, and American Hospital Association; The United States District Court for the Northern District of Florida Pensacola Division; litigation filed by Lovelace Law Firm, P.A., Vroon & Crongeyer, LLP, Weisman, Goldberg & Weisman Co., LPA and Barrett Law Office, PA.
• In Illinois: Defendants: Protestant Memorial Medical Center, Inc. d/b/a Memorial Hospitals and American Hospital Association; The United States District Court for the Southern District of Illinois; litigation filed by Goldenberg, Miller, Heller & Antognoli, P.C., Becker, Paulson, Hoerner & Thompson, P.C., and Barrett Law Office, PA.
• Defendants: St. Elizabeth’s Hospital Sisters of The Third Order of St. Francis, d/b/a St. Elizabeth’s Hospital and American Hospital Association; The United States District Court for the Southern District of Illinois; litigation filed by Goldenberg, Miller, Heller & Antognoli, P.C., Becker, Paulson, Hoerner & Thompson, P.C., and Barrett Law Office, PA.
• In Pennsylvania: Defendant: The Hospital of the University of Pennsylvania; The United States District Court for the Eastern District of Pennsylvania; litigation filed by Levin, Fishbein, Sedran & Berman, Weisman, Kennedy & Berris Co., LPA and Monheit Silverman & Fodera.
• Defendant: Children’s Hospital of Philadelphia; The United States District Court for the Eastern District of Pennsylvania; litigation filed by Levin, Fishbein, Sedran & Berman, Weisman, Kennedy & Berris Co., LPA and Monheit Silverman & Fodera.

As noted in the litigation against defendants Baptist Hospital and AHA: “Baptist Hospital’s conduct is an unconscionable, discriminating, misleading, and deceptive creation and collection of inflated debts from uninsured patients. Baptist Health and their ‘nonprofit’ confederates across the country who employ the same business model have thereby amassed and hoarded billions of dollars in cash and marketable securities, which otherwise should be available to provide charity care to those who were contemplated by the tax exemption” (received by nonprofit hospitals)…Despite their surplus revenues and substantial federal, state, and local tax exemptions, Baptist Hospital has engaged in the pattern and practice of charging inordinate and inflated rates for medical care to the Plaintiff and the Class, who are uninsured Baptist patients. Baptist Hospital charged the Plaintiff and the Class significantly more for medical services than they charge their insured patients for the same services. They also utilize aggressive, abusive and humiliating collection practices to recover these inflated medical debts from the Plaintiff and the Class.”

As described in the litigation against Sacred Heart Health Inc., Ascension Health and the AHA: “Uninsurance is a prevalent problem for many citizens in Florida. About 3 million Floridians do not have health insurance. This is about 18% percent of Florida’s population. Florida ranks 6th in the nation in uninsured residents…Because the Medicare program provides health insurance for most people age 65 and over, the majority of the uninsured (in Florida) are under the age of 65. The largest numbers of uninsured are those aged 30-49, but the rate of uninsurance is highest for young adults, aged 19-29. Approximately 23 percent of those aged 19-64 in the State of Florida lack insurance. The uninsured are disproportionately racial and ethnic minorities, though whites are the largest group of uninsured nationwide. Among Hispanics, 33.2 percent are uninsured…The perception of a growing financial crisis for Florida’s hospitals is false. After-tax profits for the average Florida hospital rose 156% between 1990 and 2001 and 38% between 2000 and 2001…Like their counterparts nationally, Florida’s hospitals, including non profit ones like the Ascension Defendants, have adopted a ‘Persian market’ system of patient care charges. Basically, the system features a ‘retail’ charge for health care services — which only a few uninsured patients are obligated to pay — versus a much lower health care charge negotiated by government and private health insurance groups…Higher charges for the uninsured have led to higher reimbursements and benefits to the Ascension defendants from the Federal and State governments.”

The class action lawsuit against Protestant Memorial Medical Center and the AHA states: “Memorial holds itself out as a charitable non-profit entity in order to operate free from tax…In reality, Memorial is anything but charitable…uninsured patients are generally unable to pay these inflated and unreasonable charges (charged by Memorial). Moreover, Memorial, as a self-proclaimed charity, also pursues aggressive collection practices, which often result in lawsuits against uninsured patients. These aggressive collection practices violate Memorial’s tax exemption agreements with the United States Government, the State of Illinois and St. Clair County.”

Among other charges made in the litigation against St. Elizabeth’s Hospital Sisters of The Third Order of St. Francis and the AHA are: “St. Elizabeth’s sets its charges for medical services at patently unreasonable and excessive rates. While St. Elizabeth’s has pre-admission contracts with private insurance companies and governmental third party payors like Medicare, Medicaid and Illinois Public Aid that only reasonable amounts will be collected and/or attempted to be collected from their insured, all of the St. Elizabeth’s uninsured patients are charged grossly inflated charges well above reasonable rates, which can be as large as twice as much charged to the insured for the same service. St. Elizabeth’s realizes substantial revenues from this discriminatory practice charging practices…Not only does St. Elizabeth charge its uninsured patients the highest rates for medical care, which most cannot afford to pay, it has also engaged in the uniform pattern and practice aggressively pursuing such debt through collection efforts such as collection lawsuits…The AHA, through internal memos called ‘white papers’ and other sponsored publications, provides guidance to St. Elizabeth’s and the non profit hospital industry on its billing and collection practices for uninsured patients, including promoting publications such as, Seven Strategies to Improve Your Bottom Line…In these sponsored publications, the AHA encourages St. Elizabeth’s and its nonprofit hospital members to inflate its chargemaster prices, which only St. Elizabeth’s insured patients are charged. These inflated chargemaster prices have the intended effect of increasing St. Elizabeth’s outlier payment reimbursements under the DSH and Medicare reimbursement programs.”

According to the class action lawsuit against defendant The Hospital of the University of Pennsylvania: “Despite its favorable tax exempt status and its substantial net revenues and asset reserves in the billions of dollars, Defendant HUP has breached its Agreements with the United States Government, and the Commonwealth of Pennsylvania by: failing to provide emergency room medical care to its uninsured patients without regard to their ability to pay for such care; charging its uninsured patients exorbitant and unaffordable rates for medical care; and by engaging in aggressive efforts to collect debt from its uninsured patients…Despite sizeable net revenues and its asset reserves, Defendant HUP and its affiliate provide little charity care to the uninsured.”

As noted in the class action litigation against defendant Children’s Hospital of Philadelphia: “Defendant CHOP’s uninsured patients have therefore not received the benefit of the of the Agreements between Defendant CHOP and the United States Government and the Commonwealth of Pennsylvania. These uninsured patients primarily consist of the working poor who do not qualify for Medicaid but cannot afford private health insurance and/or cannot obtain health insurance through their employers…Defendant CHOP sets its charges for medial services at patently unreasonable rates. While Defendant CHOP has pre-admission contracts with private insurance companies and governmental third party payors like Medicare and Medicaid that only reasonable amounts will be collected and/or attempted to be collected from their insureds, all of its uninsured patients are charged grossly inflated amounts that are well above reasonable rates, which can be twice as much as charged to the insured for the same service…Plaintiff believes that certain members of the CHOP Board and/or top executives either individually or on behalf of for-profit organizations that they are affiliated with, receive benefits not generally available to the general public by virtue of their position which is a per se violation of Federal law. Further, Plaintiff believes that CHOP gives substantial discounts for for-profit insurers and allows for-profit non-charitable entities to use the CHOP facilities to derive a profit, both of which are violations of 501(c)(3)’s requirement that CHOP operate exclusively for charitable purposes.”

To learn more about that the class action lawsuits by uninsured patients against nonprofit hospital systems and nonprofit hospitals, please visit www.nfplitigation.com.

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