UNINSURED PATIENTS SECURE CLASS ACTION SETTLEMENT WITH A NONPROFIT HOSPITAL SYSTEM

Settlement with Legacy Hospital System in Oregon

Guarantees Fair Pricing and Charity Care for the Uninsured
 

 Portland, OR, July 20, 2006 – Uninsured patients  have reached a settlement with Legacy Health System of  Oregon, a nonprofit hospital system with hospitals in Oregon,  to establish fair pricing and charity care policies for uninsured  patients of those hospitals. The lawsuit contends that Legacy consistently overcharges its poorest and most vulnerable  patients – the uninsured – by charging them rates that far  exceed the amounts that Legacy requires its insured patients  to pay for the same services.  Hospitals have traditionally  defended this pricing differential by explaining that insured  patients pay discounted rates negotiated between their  private insurance companies and the hospitals.  However,  uninsured patients are the least able to pay, have no  negotiating power and thus are charged the highest rates for  identical medical services. 

Legacy Health System is one of the two largest non-profit healthcare systems in Oregon. Last month, Judge Marilyn Litzenberger of the Multnomah County Circuit Court gave final approval to a class settlement with the other large hospital system in Oregon, the Providence Oregon Hospital System. This second settlement, which must still be approved by the court, covers Legacy Health System, Legacy Good Samaritan Hospital, Legacy Emanuel Hospital in Portland, and Legacy Mount Hood Medical Center in Gresham, Oregon and includes the following provisions:

• The agreement covers medical charges to uninsured patients over almost a 9-year period—going back almost five years and extending four years into the future.

• All past hospital bills to uninsured patients will be recalculated in two steps:  1) They will first be recalculated to reflect Legacy Retroactive Uninsured Rate, a discount of 25% for all uninsured patients; and 2) They will be further reduced based on the uninsured patient’s income using income statistics determined by the federal government.  For example, uninsured patients whose income is at or below 200% of the Federal Poverty Level ($40,000 for a family of four in 2006) will be entitled to free care at Legacy if they do not own more than $75,000 in assets.  If uninsured patients have paid more than these recalculated bills, they will be entitled to a refund.

• For future bills for a period of four years, Legacy will provide future hospital patients who receive inpatient or outpatient Medically Necessary services from a Legacy Hospital and who qualify for a charity care discount first a 15% discount from Legacy’s undiscounted charges and second further discounts based on income level per Legacy’s charity care policy.  For a period of two years, Legacy will provide the 15% discount from undiscounted charges to uninsured patients even if they do not qualify for charity care as long as their income is less than $100,000.

• Uninsured patients who have been treated at one of the Legacy hospitals in the past four years will be entitled to a refund or a reduction of their bill if they submit a claim.  Plaintiff Linda Renn of Portland, Oregon, incurred more than $54,646 in hospital bills for her late husband’s terminal care at a Legacy Hospital.  Under this settlement she will owe nothing.  Plaintiffs John and Helen Turner were saddled with a $59,000 bill for emergency treatment for Mr. Turner at a Legacy hospital, on which Legacy’s collection agency had obtained a judgment that had grown with interest to $77,274.  Under the Settlement the Turners will owe just $15,249. 

• The settlement will also assure that collection activity associated with these fair bills will be reasonable.

John Phillips, lead attorney for the plaintiffs, stated, “With this Legacy settlement, the two largest non-profit hospital systems in Oregon have agreed to treat their poorest patients fairly.  These settlements put Oregon in the forefront of change with respect to uninsured patients.  I hope the remainder of the non-profit hospital industry in Oregon and the rest of the country takes heed and follows suit.”

Brian Campf, one of the Oregon attorneys representing the uninsured plaintiffs in the case, added, “I am delighted that we in Oregon have been the first to create a positive change for uninsured patients who are the most vulnerable in the system.”

Sid Backstrom, of the Scruggs Law Firm, the firm credited with initiating this important national litigation, shared the view of his co-counsel:  “We are finally seeing the fruits of our labor in creating real change in the lives of uninsured patients and how they are treated by non-profit hospitals.  I expect the nation to follow Oregon’s lead.”

The attorneys representing the plaintiffs and the proposed settlement class are John Phillips and Matthew Geyman of Phillips Law Group, PLLC in Seattle, Washington, (206) 382-1058, www.jphillipslaw.com, Michael Williams and Brian Campf of Williams Love O’Leary Craine & Powers, P.C. in Portland, Oregon, (503) 295-2924; and Richard Scruggs and Sidney Backstrom of the Scruggs Law Firm, P.A. in Oxford, Mississippi, (662) 281-1212.  Please contact them if you have any questions.