System settled uninsured suit, now sees case tossed

North Mississippi Health Services, Tupelo, won a victory in federal court when a judge dismissed a lawsuit over the system's billing of uninsured patients, one of a series of suits filed against hospitals nationwide by a legal consortium led by Oxford, Miss., attorney Richard Scruggs. The dismissal is significant because North Mississippi in August 2004 became the first and only hospital company to sign a memorandum of understanding to settle with the Scruggs group. The system later backed out of the agreement as being too onerous but said it would take several voluntary steps to help the uninsured, including providing a managed-care discount to uninsured patients with income at or below 400% of the federal poverty level. The state case may be refiled in state court. At deadline, Scruggs could not be reached for comment. In dismissing the suit, U.S. District Judge Michael Mills referred to more than 20 virtually identical cases across the country in which judges found no grounds for federal charges. Mills, however, said in his written opinion that he "hopes and expects" North Mississippi to follow through with an improved conflicts-of-interest policy arising out of the previous settlement. -- by Paul Barr