A law firm known for its suits against makers of tobacco and asbestos has filed a wave of class-action lawsuits against not-for-profit hospitals and health systems, accusing them of using their tax exemptions to benefit board members and physicians while charging high prices to uninsured patients.
Attorney Richard Scruggs of Scruggs Law Firm, Oxford, Miss., sued 13 hospitals and health systems and the American Hospital Association on behalf of uninsured patients. The firm said it expects to file similar suits against other major hospitals.
The charges include breaches of charitable trust, consumer fraud, deceptive business practices, unjust enrichment, and violations of the Emergency Medical Treatment and Active Labor Act.
The American Hospital Association said it was reviewing the suit.
"What's particularly concerning about the lawsuit is that it will consume already limited healthcare resources that hospitals need to continue their daily work of caring for the uninsured and other patients in their communities," an AHA statement said. "We feel this lawsuit is baseless and misdirected and is diverting focus from the real issue, which is how we as a nation are going to (provide) health coverage to all Americans."
Edward Demansky, a spokesman for 10-hospital Advocate Health Care, Oakbrook, Ill., one of the systems sued, said, "We're confident that our billing and collection practices are in full compliance with applicable laws and regulations . . . We're proud of our commitment to meeting the needs of the uninsured."
Other defendants are Allina Health System and Fairview Health Systems, both based in Minneapolis; Baptist Health Systems, Birmingham, Ala.; Baptist Hospital of Miami; Catholic Healthcare Partners, Cincinnati; DeKalb Medical Center, Decatur, Ga.; East Texas Medical Center Regional Healthcare System, Tyler; Medical Center of Central Georgia, Macon; Phoebe Putney Health Systems, Albany, Ga.; Provena Health, Mokena, Ill.; St. Thomas Hospital, Nashville; and Wellstar Health Systems, Marietta, Ga.