Uninsured Female Patients Contest High Bills

(WOMENSENEWS)–When Chrissy McCormick couldn’t pay for medical care last year, it nearly cost her life.

McCormick, a recently-laid off file clerk in Polono, Ill., checked into the local hospital with abdominal pain in March 2004 and left without a diagnosis. Three emergency room visits later, in October 2004, doctors ordered an ultrasound that revealed a cyst near one of her ovaries.

Living near the poverty line and without health insurance, McCormick couldn’t afford her $5,000 bill for emergency care–or the $16,000 surgery that her doctors said she needed. McCormick says hospital administrators denied her an operation due to unpaid fees. She did her best to cope with her symptoms until searing pain sent her rushing back to the hospital, where doctors performed emergency surgery in November 2004 and presented her with a $21,000 bill.

“My doctors told me that if I’d waited another 24 hours, I could have died,” says McCormick. “The irony is that I shouldn’t have had to wait at all. The hospital that treated me was a nonprofit one and required by law to give free or low-cost care to poor patients. Even though I asked about charity care, they shrugged me off and said I didn’t qualify.”

McCormick, who now relies on local churches for food, is among the growing number of uninsured women who have become the targets of what critics say is a new practice at nonprofit hospitals: denying patients applications for “charity care,” charging them even if they can’t pay, then suing them for the balance.

Hundreds of women in 24 states are pushing back by joining a group of class-actions that charge 400 hospitals in 60 medical systems with violating their tax-exempt status by billing uninsured patients three to five times more than insured patients and using abusive tactics to collect bill payment. Lawyers were unable to provide the exact number of women involved in the suits.

Women Most Affected

“Poor women are disproportionately affected by this practice because women earn less than men, live longer and require more medical care,” says Richard Scruggs, the Oxford, Miss., attorney who is organizing the class-actions, which are now being filed in state courts and are based on allegations of over-charging and consumer fraud.

Scruggs–the lead attorney in the $206 billion, 1998 settlement won by cigarette smokers against U.S. tobacco companies–predicts his campaign to help indigent patients will have an even bigger impact on public policy than his tobacco victory. “Eighty-five percent of American hospitals are not-for-profit,” he says, “and though an increasing number are breaking the rules by overcharging poor patients, none of them has ever been called to count for their actions and had their tax exemption status revoked by the Internal Revenue Service.”

Female plaintiffs in the Not-for-Profit Hospital Class Action Litigation include Margaret Loncar of Bridgeview, Ill., whose income as a Wal-Mart cashier was docked by 15 percent when her husband died of lung disease and left $40,000 in medical bills behind.

They include Kathy Millican of Tupelo, Miss., who couldn’t pay $11,600 for an emergency hysterectomy and Lacey Tamouchi of Franklin County, Ohio, whose prematurely born son lived only three weeks and racked up $51,000 in hospital bills.

These uninsured patients accuse nonprofit hospitals of charging them “list price” for medical services while offering dramatically lower fees to patients who are insured.

“These pricing differences have become common practice in recent years,” says Uwe Reinhardt, a health economist at Princeton University in Princeton, N. J. “In exchange for keeping the U.S. health care system private, hospitals struck a deal with the government and agreed to charge lower fees for patients who qualify for government-issued Medicare and Medicaid. In exchange for steady business, they struck separate deals with insurance companies and agreed to give privately insured patients deep discounts. As a result, we have a health care system that gives price breaks to the insured while gouging the uninsured.”

In their lawsuits, uninsured patients are also accusing hospitals of engaging in what Scruggs calls “Soprano-like collection tactics” including midnight phone calls and physical intimidation.

Hospitals Defend Billing Practices

Nonprofit hospitals defend their billing practices as perfectly legal, standard practice and necessary to keep them financially afloat.

“Providing charity care for patients who meet income requirements is at the top of our agenda,” says Richard Gundling, a spokesperson for the Westchester, Ill.-based Healthcare Financial Management Association. “However, hospitals have to ask those in need of free or discounted care to demonstrate their need. Those who seek care but don’t have insurance aren’t necessarily needy, and they should be expected to pay their share.”

The Chicago-based American Hospital Association reports that each hospital has its own rules to determine which patients qualify for charity care and hospitals never expect patients who qualify to reimburse them for medical bills.

Reports released by the American Hospital Association indicate hospitals are in greater need of collecting money from patients than ever before. The total cost of charity care is rising (up from $15 billion in 1992 to $25 billion at the last count, in 2002). But so is the percentage of hospitals with negative financial margins (up from 24 percent in 1992 to 29 percent in 2002).

Neither the Healthcare Financial Management Association nor the American Hospital Association would comment on charges that hospitals are denying patients applications for charity care or charging the uninsured more than the insured.

Cases Move to State Courts

Thus far, both sides of the hospital billing battle have scored victories.

Scruggs and his clients celebrated in August, when North Mississippi Health Services, a six-hospital conglomerate based in Tupelo, settled one suit for a reported $150 million. The health care provider reportedly agreed to repay money it had collected from the indigent and to absorb medical bills that total more than 10 percent of poor patients’ income.

Elizabeth Curlee, a spokesperson for North Mississippi Health Services, declined to comment on the case.

Hospital administrators celebrated last fall and winter, when judges in eight states threw individual cases out of court after ruling that federal laws did not apply.

In response, Scruggs and his clients have moved their fight to the state courts, where they began filing paperwork last month and where they expect two to three more years of legal wrangling.

Lawsuits Could Affect Health Care Policy

Health care advocates say that as medical costs continue to mount and the economy continues to flail, the story of the female plaintiffs in these cases dramatize the worsening plight of the 1 in 7 Americans without health insurance. Their number now stands at a record 45 million, more than half of them women, and a 2000 survey by researchers at Brandeis University in Waltham, Mass., indicated that 70 percent of uninsured patients who visit emergency rooms are never offered discounted or free care.

Against this backdrop, women’s health advocates say they are watching the class-actions closely.

“These lawsuits could translate into more humane treatment for the neediest women patients,” says Princeton’s Reinhardt. “They may be just we need to reform and restore balance to our health care system.”

Molly M. Ginty is a freelance writer based in New York City.