Nonprofit Hospital Chain Gouges the Uninsured, Suit Says

A group of former patients on Tuesday sued Catholic Healthcare West, the state’s largest nonprofit hospital chain, alleging that uninsured patients in California have been overcharged for their care compared with patients on discounted insurance plans.

The class-action suit, which was organized by activist K.B. Forbes, named as plaintiffs three former patients of California Hospital Medical Center in Los Angeles. It follows an earlier campaign led by Forbes’ Latino advocacy group against Tenet Healthcare alleging the same discriminatory practice.

Tenet, the nation’s second-largest hospital chain, settled the case in 2003 and subsequently began billing uninsured patients at discounted rates.

“It’s price gouging ... it’s worse than a hustler on the street playing a shell game with you,” said Forbes, who heads an East Los Angeles-based group, Consejo de Latinos Unidos, of Catholic Healthcare West’s billing. The chain owns the California Hospital and 33 others in the state.

By overcharging the patients, the suit alleges, the hospital engaged in unfair business practices and violated the state’s consumer protection laws.

Catholic Healthcare West said in a statement that the company could not comment on the suit, which it said it had not had an opportunity to review.

The company did say that it already offers free and discounted care to uninsured patients, and has helped thousands obtain state and federal coverage.

The chain has spent more than $600 million on charity care and community benefits in 2005, spokeswoman Susan Whitten said.

“We have always provided free or discounted care,” she said.

But the three Los Angeles residents who are part of the lawsuit received no such help, said Forbes, adding that all are U.S. citizens.

Mirna Estupinian, 35, said she received a $20,296.50 bill after staying in the hospital for two days with gastritis, a severe stomach problem. But the hospital would have only billed the “average private insurer” $5,600 for the same medical care, or billed Medicare $3,994, according to the lawsuit. Medicare is the federal healthcare program for the elderly.

“I’m sick in my nerves” from receiving such a bill, said Estupinian, a mother of two and a part-time medical assistant. Her husband is a self-employed truck driver, making the family’s annual income about $39,000.

Fearing that a bad credit report would mar her chances to buy a home in Rialto, Estupinian recently took out a loan to pay the bill in full after the hospital denied financial assistance. This occurred, Forbes said, after the hospital told her she could use her son’s college savings plan to pay most of the charges, which she did not want to do.

Tattoo artist Sergio Pantoja, 29 and a father of three, said he was transported to California Hospital in mid-July after he was injured in a hit-and-run accident. He received two X-rays of his shoulders and asked to be discharged.

He was billed $15,897 -- more than $3,000 per hour of treatment. According to the lawsuit, a private insurer would have been billed $4,451 and Medicare $3,839.

Pantoja earns about $9,000 a year as a tattoo artist.

Forbes said Catholic Healthcare West should have alerted these patients to charity care programs they may have qualified for and should have identified government assistance programs.

Forbes said he would like Catholic Healthcare West to adopt revised standards similar to Tenet’s for all patients in California. The company began offering uninsured patients comparable discounts given to private insurance companies.

Tenet also agreed not to sue or secure liens against patients whose main asset is their house.

Archie Lamb, the patients’ lawyer, said the issue highlighted how many hard-working uninsured people were unfairly treated by the system.

Hospitals have long had tiered pricing schemes that give steep, negotiated discounts to Medicare and private insurers -- but not to uninsured patients.

Forbes said the tactic preys on the fears of uninsured patients who want to protect their credit and have no idea what the regularly discounted rate is for a procedure.

“None of these people are looking for a free ride. They are looking for a fair rate,” said Forbes, adding that Estupinian paid her bill in full. The hospitals know thatpatients “are petrified of having their creditworthiness destroyed.”