Hospitals were victorious on two separate fronts last week in their ongoing legal battle to fend off lawsuits filed on behalf of uninsured patients.
On one front, a U.S. District Court judge in Birmingham, Ala., dismissed one of the 48 outstanding lawsuits, the first such decision in those cases, triggering predictions by hospital defense attorneys that many more dismissals would follow. And earlier in the week, the U.S. Judicial Panel on Multidistrict Litigation opted not to consolidate the uninsured patient billing lawsuits into one federal case, which means each will proceed separately in different federal courts around the country.
"Now they're 0 for 2," said Ty Cobb, a lawyer with Hogan and Hartson who assisted the American Hospital Association-named as a defendant in many of the lawsuits-with its case. Between the decision not to consolidate and the reasons used for the dismissal of the plaintiffs' cases, "It's highly likely most of these cases will (end) in motions to dismiss," he said.
Representatives for the plaintiffs, led by Oxford, Miss., lawyer Richard Scruggs, downplayed the ruling, arguing that each case will be decided on its own merits and that the Alabama ruling has no influence on any other lawsuit. Additional lawsuits will be added to the current lawsuits, Scruggs said.
The targets of the lawsuit dismissed Oct. 21 were nine-hospital Baptist Health System, Birmingham, Ala., and the AHA.
Defense attorneys said they believe the lawsuits don't follow typical patterns for a plaintiff. Tim Cullen, a lawyer for Jones Day who argued before the judicial panel on behalf of seven hospitals at a Sept. 30 hearing, said that in his arguments, he acknowledged the problem of uninsured patients getting billed too much. "There is a genuine social issue," but Scruggs' argument "is a bad legal case and a ham-handed way to deal with the problem," he said.
Another defense attorney, Robert Baudino, seemed even more confident and said the Alabama dismissal was likely the first of many. "There is no merit in fact or law in these cases. I'm expecting every federal district judge to dismiss each and every one of these cases," said Baudino, who is representing Phoebe Putney Health System, Albany, Ga., in one lawsuit.
Scruggs said he disputes the notion that the cases have no legal basis. He said contractual common law holds that for a contract to be binding, fees must be reasonable. "Charging uninsured, indigent patients more than anyone else is not reasonable," he said. In addition, the hospitals are effectively free from taxation as a result of their commitment to provide affordable healthcare to the community, which these hospitals have not been doing, he said.
The dismissal in Alabama centered on two main issues. The judge said in her opinion that uninsured patient plaintiffs had been the subject of judgments on the matter already in state court and couldn't try the case again in federal court, a concept known as res judicata. In addition, the lawsuit's contention that the defendants had violated elements of the Emergency Medical Treatment and Active Labor Act did not apply because that law applies to personal injury, which under Alabama law does not include the economic injury claimed by the lawsuit, according to the ruling.
Defense attorneys said those concepts also will apply to other lawsuits around the country. "This case will be very influential," said Rick Robinson, a partner in the law firm Fulbright & Jaworski, which helped represent Baptist Health in the lawsuit. "This is just the first of many (dismissals) the federal district courts will be issuing," he said. The lawsuits are based on alleged unfair collection practices, and collections typically only begin after a judgment has been issued, he said. And the interpretations of what constitutes personal injury in Alabama generally can be applied to other states, he said.
The plaintiffs, though, point to the multidistrict panel's ruling-which said the cases were dissimilar-as reason not to try to apply circumstances in the Alabama case to the other cases across the country.
"It really was a technical decision," said Robert Siegfried, a Scruggs spokesman, in reference to the res judicata part of the dismissal. Regarding the EMTALA portion of the Alabama decision, Siegfried said, "It would be inappropriate to speculate on whether it applies to other cases." The plaintiffs "are confident that we will succeed," according to a Scruggs statement.
Before the Baptist ruling, Scruggs had said that it's possible that some-but not all-of the cases would be dismissed by federal judges, who he pointed out are political appointees. "Judges are independent-minded guys," unlikely to act in concert, he said. "There's going to be some wins and losses." Nevertheless, "I will be shocked if (all) 48 are dismissed," he said. "It would be an incredible shirking" of responsibility to the overcharged uninsured patients, he said.
Some defendants saw the multidistrict panel's decision as a victory because it will keep the cases close to home. "We were pleased we get to argue our position in our own community," said Anne Streeter, spokeswoman for defendant Baptist Health South Florida, Coral Gables.
Scruggs said he is determined to fight these cases, noting that his side was denied consolidation 13 times before succeeding in a round of asbestos class-action lawsuits earlier in his career. "This is going to be a long, long process," he said.