The list of hospitals and systems being sued by Mississippi plaintiff attorney Richard Scruggs and others for allegedly overly aggressive billing practices grew last week by six.
The civil cases originally filed in June now include 27 lawsuits filed against health systems controlling about 250 hospitals in 15 states and involve the American Hospital Association. Scruggs and his clients allege that the named hospitals violated their tax-exempt status by overcharging and discriminating in their billing practices against poor and uninsured patients. The plaintiffs also allege that the hospitals employed aggressive collection methods, including garnishment of wages and seizures of homes. The lawsuits allege the hospitals violated the 1986 Emergency Medical Treatment and Active Labor Act and committed a breach of contract, consumer fraud, unjust enrichment, deceptive business practices and conspiracy.
The six newly added hospitals are: Florida Hospital Healthcare System, Orlando; Integris Health, Oklahoma City; Lee Memorial Health System, Fort Myers, Fla.; Medical College of Georgia Hospital and Clinics, Augusta; St. Barnabas Health Care System, Toms River, N.J.; and St. Dominic Health Services, Jackson, Miss.
"It is anticipated that, over the course of the litigations filed today, it will be revealed that the six defendant nonprofit hospital systems and hospitals have for years spent only a small percentage of their sizable revenues on charity care for the uninsured while reaping enormous cash windfalls from their tax-exempt status," Scruggs said in a statement. "Furthermore, the defendants often engage in predatory and harassing collection tactics to force payment from the numerous uninsured patients unable to pay these `sticker' prices, often hounding the patients for years and, in numerous instances, forcing personal bankruptcies."
St. Barnabas spokeswoman Ellen Greene said the hospital has not yet been served with the lawsuit and thus could not comment.
The class-action litigation is the latest PR blow to tax-exempt hospitals. In May, the Internal Revenue Service confirmed an investigation into executive compensation at tax-exempt organizations, including hospitals (May 31, p. 6). Three congressional committees have begun exploring the charity care and billing policies of not-for-profit hospitals (June 28, p. 6). Even the ABC News program "Nightline" devoted an entire segment to the billing lawsuits and allegations last week, focusing on examples of overly aggressive collection policies.
The news that Scruggs, who successfully sued the tobacco and asbestos industries, was gunning for tax-exempt hospitals was not well-received by the AHA.
Spokeswoman Alicia Mitchell reasserted the AHA's contention that the lawsuits are baseless and misdirected. "Day in and day out, hospitals are on the front lines caring for the nation's poor and uninsured," Mitchell said. "We have a strong historical commitment and are committed to doing even more to serve our communities."