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Monday, April 30, 2012

Ind. Courts - "Uninsured patients' lawsuit carries high stakes for area hospitals" [Updated]

Jeff Swiatek of the Indianapolis Star had a long Sunday story about a case set for oral argument on May 10th before the Supreme Court, Abby Allen, et al. v. Clarian Health Partners, Inc.

The first ILB entry on this case was on May 8, 2010, quoting a story in the Star from Daniel Lee, headed "Clarian Health sued over high charges: Patients claim bills for services insurance doesn't cover are unreasonable."

The oral argument before the COA, held Aug. 11, 2011, may be viewed here. The Oct. 3, 2011 COA opinion is discussed here (Oct. 13, 2011).

Here are a few quotes from Swiatek's lengthy story yesterday:

The case, set for argument May 10, involves a lawsuit against the state's largest hospital group, IU Health, by two of its uninsured patients.

Their claim: IU Health overbilled them by charging much more than insured patients would pay for the same treatment.

Though the breach-of- contract claims in the case amount to just a few thousand dollars, the legal stakes are high.

A finding favoring the IU Health patients could fling open the door to multimillion-dollar class-action legal claims from uninsured patients against IU Health and other hospitals as well. Patients could sue over billings as far back as 10 years, says Indianapolis trial lawyer Scott Weathers.

Weathers, whose clients sued IU Health (formerly Clarian Health) in 2010, is blunt about his intentions. He wants to turn their lawsuit into a class action open to hundreds of uninsured patients who might have been overbilled by the health system over the past decade.

He also hopes to target other Indiana hospitals with similar lawsuits carrying damage claims in the millions of dollars.

"If we win, I'm afraid the other hospitals are going to hear from us. We have clients in the wings," he said, who are ready to sue. * * *

It's the first time the state Supreme Court will wrestle with the legalities of a hospital charging uninsured patients more than insured ones, according to attorneys involved.

The high court's consideration of the issue comes even after a new federal law requires hospitals to give discounts to uninsured patients similar to those given to insured ones.

That led IU Health to offer uninsured patients a 40 percent discount off its full-price "chargemaster" rates in January of last year, said Lauren Cislak, an IU Health spokeswoman.

IU Health's discount applies to uninsured patients regardless of income and is based on the best rates it charges its commercial insured customers or Medicare, she said.

Other Indiana hospital groups have put similar discounts for uninsured patients in place.

But the new federal guidelines don't take away patients' right to sue over past billing practices -- which means the IU Health lawsuit still is very much alive.

At the heart of the IU Health case are 120 years of state common law holding that, if a contract for a service doesn't specifically set a price or fee, the bill must be "reasonable." And one definition of reasonable is the price charged most other customers.

[Updated 5/2/12] This case deals with this claim: "IU Health overbilled them by charging much more than insured patients would pay for the same treatment." Another issue covered recently in the ILB is a new study where "Researchers found wide variations in charges even among appendectomy patients treated at the same hospital."

Posted by Marcia Oddi on April 30, 2012 08:54 AM
Posted to Indiana Decisions