Uninsured Are Overcharged, Lawsuit Says

California hospital chain Sutter Health became the target of a federal lawsuit Wednesday alleging it charges the uninsured more than insured patients.

The suit, one of dozens challenging industry billing practices nationwide, says the Sacramento-based chain does not live up to its nonprofit, charitable tax-exempt status.

The 26-hospital chain “should provide appropriate and reasonable charity care for people who cannot afford to pay for hospital services,” said Kelly Dermody, one of the lawyers who filed the suit in San Francisco.

A hospital spokesman, however, said the allegations were outdated because the chain had changed its ways.

Studies have indicated that the group donated about 1% of its earnings for free emergency-room care. That is about 40% less than the statewide average for private, for-profit hospitals, Dermody said.

The suit accuses Sutter of using coercive tactics to collect on bills. It was brought on behalf of a man who fell and was taken to a hospital in Berkeley. He was charged $4,600 and discharged that day. The suit says he would have had to pay much less had he been insured.