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Wisconsin to File Complaints Against Hospitals

November 8, 2005

By Guy Boulton, Milwaukee Journal Sentinel

Nov. 8–Wisconsin Attorney General Peg Lautenschlager announced Monday that her office would file complaints against St. Joseph Regional Medical Center and the Wisconsin Heart Hospital, accusing them of charging uninsured patients much higher prices than they charge managed care companies. Advertisement

The complaints, based on the experiences of two uninsured patients, are to be filed with the state Department of Agriculture, Trade & Consumer Protection today.

Lautenschlager’s move attacks hospitals’ controversial practice of charging uninsured patients far more than they charge health plans or government health programs.

“It can swiftly push a family over the financial cliff,” Lautenschlager said at a news conference at the Italian Community Center in Milwaukee. “We are seeking fairness.”

Uninsured patients who don’t quality for charitable care or discounts are expected to pay “charges” — the hospital equivalent of list price. In contrast, managed care companies negotiate discounts with hospitals, and Medicare and Medicaid essentially dictate what they will pay.

As a result, someone without insurance can end up being charged twice as much — or more — than a health plan would pay for the same care.

The practice has been well documented and was the subject of congressional hearings in 2003.

The timing of the move by Lautenschlager, who now faces a Democratic primary election challenge from Dane County Executive Kathleen Falk in her bid for re-election, was not unnoticed by the Wisconsin Hospital Association.

“This really wasn’t about helping out the uninsured,” George Quinn, senior vice president of the Wisconsin Hospital Association, said after the news conference. “This was about helping out a desperate politician. It basically was a stunt.”

The attorney general’s office said it has been looking into the practice for more than a year. Lautenschlager also said her office was hindered by Wisconsin’s not having a law against price gouging.

Hospitals contend that they provide millions of dollars in charitable care and incur millions more in bad debts yearly.

And many hospitals recently put in place policies that make it easier for people to qualify for charitable care and discounts.

The new policies were partly in response to the controversy over hospital billing practices and to lawsuits being filed throughout the country that allege price gouging.

So far this year, lawsuits have been filed against hospitals owned by ProHealth Care, Aurora Health Care, Covenant and Froedtert & Community Health.

Despite the recent changes in hospital billing practices, policies on charitable care and discounts vary from hospital to hospital. They also can be complex, taking into account a family’s household income, assets, debts, size of its medical bills and other factors. Further, hospital employees sometimes are not aware of the policies.

For their part, hospitals contend that some people who would qualify for charitable care or discounts do not bother applying.

“We have policies that we think are fair and that take care of the most needy in our community,” said Anne Ballentine, a spokeswoman for Covenant Healthcare System.

Covenant is the parent of St. Joseph Regional Medical Center and owns 49 percent of the Wisconsin Heart Hospital.

The attorney general’s pending complaints are based on the experiences of two people:

–Orenta Toombs, an uninsured mother of three who is a school food-service worker, was billed $31,614 in May 2002 at St. Joseph Regional Medical Center.

–Richard Bodart, a self-employed worker, was billed $33,646 by the Wisconsin Heart Hospital in May 2004.

Toombs was not at the news conference, and Bodart declined to comment.

The news conference included two charts showing samples from Toombs’ and Bodart’s bills and the hospitals’ estimated costs.

For example, Toombs was charged by St. Joseph $850.14 for 18 bags of IV solution that cost an estimated $51.30; $427.38 for two doses of Ciprofloxin that cost $33.88; and $659.16 for saline IV solution that cost $25.65.

Bodart was charged by the Wisconsin Heart Hospital $8,736 for a drug-coated stent that cost $2,500; $79.40 for an anticoagulant that cost $2.20; and $1,150.25 for a catheter balloon that cost $161.48.

The hospital bills did not include any charges from doctors.

Covenant could not comment on the estimated costs.

Ballentine said, however, that Toombs qualified for free care at the hospital, but she did not apply.

The attorney general said that Bodart had a net income of about $8,000 a year. Covenant did not dispute that. But Ballentine said he was not eligible for charitable care or discounts because the self-employed worker’s gross income was $42,753.

Covenant estimates that it spent $7.9 million to provide charitable care in its fiscal year ended June 30. That works out to 1 percent of its revenue of $789 million, but the company reported a net income of $10.3 million for the year.

In addition, bad debts cost the health care system an additional $16.7 million.

The health care system also recently pledged $1.4 million over two years to help support the Milwaukee County health program for the indigent.

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Copyright (c) 2005, Milwaukee Journal Sentinel

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