Uninsured Patients Secure First Class Action Settlement With a Nonprofit Hospital System

2 November 2005

The following release is being issued today by The Scruggs Law Firm, P.A.: In the first settlement of its kind in the nation, uninsured patients have reached a settlement with Providence Health System of Oregon, a nonprofit hospital system with hospitals throughout Oregon, to establish fair pricing and charity care policies for uninsured patients of those hospitals. Uninsured plaintiffs filed the class action suit against Providence in December 2004 in Multnomah County Circuit Court in Portland. Plaintiffs alleged that Providence charged its uninsured patients much higher rates than it required any of its other patients to pay for the same services. Hospitals have traditionally defended this pricing differential by explaining that insured patients pay discounted rates negotiated between their private insurance companies and the hospitals. However, uninsured patients are the least able to pay, have no negotiating power and thus are charged the highest rates for identical medical services. The settlement agreement, which must still be approved by the court, covers all seven Providence hospitals in Oregon and includes the following provisions: -- The agreement covers medical charges to uninsured patients over a six-year period -- going back four years and two years into the future. -- All charges to uninsured patients will be recalculated in two steps. 1) They will first be recalculated to reflect Providence's Oregon Preferred Provider average rate, which is expected to reduce the bills by approximately 30% for Portland area patients. 2) The hospital bills will be further reduced based on the uninsured patient's income using income statistics determined by the federal government. For example, uninsured patients whose income is at or below 200% of the Federal Poverty Level ($38,700 for a family of four) will be entitled to free care at Providence if they do not own more than $75,000 in assets. An uninsured family of four with an income of $77,400 will receive an additional 10% discount from the Preferred Provider rate. -- Uninsured patients who have been treated at one of the Providence hospitals in the past four years will be entitled to a refund, vouchers or a recalculation of their bill. For instance, Gordon and Theresa Block, plaintiffs in this case who received a $96,000 bill for emergency treatment for Mrs. Block, will have their bill reduced to $8,900. Plaintiff Gerry Hugo of Medford, Oregon, will receive a refund of almost $7,300 after paying $12,000 on his hospital bill. -- The settlement will also assure that collection activity associated with these fair bills will be reasonable. John Phillips, lead attorney for the plaintiffs, stated, "I am delighted that we have been able to achieve fairness for uninsured patients at Providence -- the group who can least afford to pay inflated medical bills. There are 60 lawsuits around the country seeking similar justice for other uninsured patients. I applaud Providence Health System for coming to the table and working to find a fair solution for its uninsured patients. Other hospital systems continue to fight these suits, and fail to appreciate that charging uninsured patients more than anyone else makes no sense morally or economically, and is clearly indefensible-especially for a nonprofit hospital system." Brian Campf, one of the Oregon attorneys representing the uninsured plaintiffs in the case, added, "This historic agreement levels the playing field between a powerful hospital system and the uninsured whose rights are too often overlooked, and whose voices are too often unheard." Sid Backstrom, of the Scruggs Law Firm, the firm credited with initiating this important national litigation, shared the view of his co-counsel, "I give tremendous credit to Providence, which from the beginning, expressed its interest in leading the way for fair treatment of the uninsured. Other hospitals around the country should take a hard look at this resolution and do what is morally right. Clearly, investing a huge amount of resources to fight these cases will ultimately be a losing formula for these hospitals. This issue, when exposed to the decent working people of America on juries all over the country, will incite outrage at the hospitals, and justice will certainly prevail." The attorneys representing the plaintiffs and the proposed settlement class are John Phillips and Matthew Geyman of Phillips Law Group, PLLC in Seattle, Washington, (206) 382-1058 and (206) 382-1168; Michael Williams and Brian Campf of Williams Love O'Leary Craine & Powers, P.C. in Portland, Oregon, (503) 295-2924; and Richard Scruggs and Sidney Backstrom of the Scruggs Law Firm, P.A. in Oxford, Mississippi, (662) 281-1212. Please contact them, and also visit a web site devoted to the issue of litigation by uninsured patients against non-profit hospitals, http://www.nfplitigation.com.

Source: PR Newswire

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