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Providence Health System Will Offer Refunds to Uninsured

Posted on: Monday, 26 June 2006, 21:00 CDT

By Steven Carter, The Oregonian, Portland, Ore.

Jun. 24--Nearly 1,000 uninsured patients of Providence Health System in Oregon will receive refunds or discounts on past hospital bills under a final settlement filed Friday in a class action lawsuit against the nonprofit hospital chain.

The settlement, filed in Multnomah County Circuit Court, means that some patients will get refunds totaling $192,385 for overcharges and others will get discounts totaling $969,425 on Providence bills issued since December 2001, according to Providence spokesman Gary Walker. A total of 992 patients will receive refunds or discounts, he said.

In addition, Providence, with seven hospitals in Oregon, started giving discounted rates to uninsured patients as of the first of this year as part of the settlement.

A similar lawsuit was filed in 2004 against Legacy Health System, but that case is still in court.

More than 40 such lawsuits are pending around the nation, challenging higher rates charged to uninsured patients for medical services. The suits allege that hospitals overcharge their most vulnerable patients, who don't benefit from the negotiating power of insurance companies. The Oregon class-action case is the first in the nation against a nonprofit hospital to reach final settlement, according to the plaintiffs' lawyers, although other cases have reached tentative settlement.

It was Providence's practice of charging a higher rate to uninsured patients than to those who are insured that prompted the lawsuit against the health organization two years ago. Preliminary settlement of the case was announced in November, but it wasn't clear until recently how many uninsured patients would file claims for refunds or discounts.

Brian Campf, a lawyer for the plaintiffs, said the chief value of the Providence settlement is that all uninsured patients going to Providence hospitals over the next two years are entitled to discounted rates, the same as insured patients. That could involve more than 40,000 patients and mean millions of dollars in reduced rates, he said.

Campf said he hopes the Providence settlement will be a catalyst for settlement in other cases.

In California, Catholic Healthcare West, which operates 41 hospitals in Arizona, California and Nevada, agreed to a preliminary settlement on June 14. Once approved by a judge, about 700,000 patients will get notices that they are entitled to refunds or discounts on bills. The hospital group has agreed to extend discounted rates for uninsured patients for four more years.

In Minnesota, Attorney General Mike Hatch last year persuaded more than 60 nonprofit hospitals to stop charging higher rates to uninsured patients, under threat of legal action.

Walker said it's uncertain whether Providence will continue discounted rates to uninsured patients after the two-year term of the settlement. But he said Providence will continue its policy of reducing or eliminating charges to patients who are uninsured and unable to pay for medical care.

Providence said it is on track to provide $60 million this year in charity write-offs to uninsured or low-income patients.

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Copyright (c) 2006, The Oregonian, Portland, Ore.

Distributed by Knight Ridder/Tribune Business News.

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Source: The Oregonian

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