—Settlement
with Providence Hospital System in Oregon Is the First of Its Kind in
the Nation Given Final Approval By a
Court—
—Guarantees
Fair Pricing and Charity Care for the Uninsured—
Portland, OR, June 23, 2006
— Multnomah
County Circuit Judge Marilyn Litzenberger
today gave final approval to the first settlement of its kind in the
nation between uninsured patients and the Providence Health System of
Oregon, a nonprofit hospital system with hospitals throughout Oregon,
to establish fair pricing and charity care policies for uninsured
patients of those hospitals. Uninsured plaintiffs filed the class
action suit against Providence in December 2004 in Multnomah County
Circuit Court in Portland.
Plaintiffs alleged that Providence charged its uninsured
patients much higher rates than it required any of its other 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 and have no negotiating power, and thus are charged the highest
rates for identical medical services.
The settlement
agreement to which Judge Litzenberger gave final
approval today covers all seven Providence hospitals in Oregon and
includes the following provisions:
·
The agreement covers medical charges to
uninsured patients over a six-year period—going back four years
and two years into the future.
·
All charges to uninsured patients have been
recalculated in two steps. 1)
Charges will first be recalculated to reflect Providence’s
Oregon Preferred Provider average rate, which is expected to reduce
the bills by approximately 30% for Portland area patients. 2) The hospital bills 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
($38,700 for a family of four) will be entitled to free care at
Providence if they do not own more than $75,000 in assets. To give another example, an
uninsured family of four with an income of $77,400 will receive an
additional 10% discount in addition to the discount reflected in the
Preferred Provider rate.
·
Uninsured patients who have been treated at one
of the Providence hospitals in the past four years and have submitted
valid claims to Providence will receive a refund, vouchers, or a
recalculation of their bill.
For instance, Gordon and Theresa Block, plaintiffs in this
case who received a $96,000 bill for emergency treatment for Mrs.
Block, have had their bill reduced to $8,900. Plaintiff Gerry Hugo of Medford,
Oregon, will receive a refund of almost $7,300 after paying $12,000
on his hospital bill.
Uninsured Providence patients who have made claims under the
settlement should receive information about the result of their
claims by mid-September.
·
The settlement assures that collection activity
associated with these fair bills will be reasonable.
John Phillips, lead attorney for the
plaintiffs, stated, “We are delighted that the Court has given
its final blessing to this ground-breaking settlement that achieves
fairness for uninsured patients at Providence—the group who can
least afford to pay inflated medical bills. We hope the rest of the nonprofit
hospitals in Oregon will examine this result and change their unfair
billing practices toward the uninsured.”
The attorneys
representing the settlement class are John Phillips and Matthew
Geyman of Phillips Law Group, PLLC in Seattle, Washington, (206)
382-1058; 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.
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