Hospital Firm to Settle Lawsuit

From the Associated Press

Hospital group Catholic Healthcare West has agreed to reimburse as many as 800,000 uninsured patients for excessive charges to settle a class-action price-gouging lawsuit.

The suit claimed that the San Francisco-based healthcare provider, which owns 40 hospitals in California, Nevada and Arizona, routinely charged uninsured patients as much as five times the amount paid by private insurers and government programs for the same services.

“It’s clearly in the hundreds of millions of dollars,” plaintiffs’ attorney Kelly Dermody said.


Lawyers said the deal announced Wednesday, which covers overcharges since 2001, also allows patients to be compensated in medical care.

Another plaintiffs’ attorney, Sid Backstrom, said the case was one of 50 he was litigating in which hospital groups were accused of charging uninsured patients their maximum rates. The hospitals charged no other patients the maximum.

Backstrom noted that private insurers and government insurance programs negotiated lower rates that were unavailable to the uninsured.

“The uninsured people got forgotten and left behind,” he said. “I don’t think it was a deliberate act to charge them more than anybody else.”

Catholic Healthcare West spokeswoman Tricia Griffin said the company altered its billing methods in 2004 and agreed as part of the settlement never to overcharge the uninsured.

“We settled the suit to put this matter behind us, avoid the cost of litigation and focus our resources on caring for patients,” Griffin said.


One plaintiff said an ambulance took her to a Healthcare West hospital in Los Angeles for treatment of severe abdominal pain. She stayed at the hospital for two days, had X-rays and was diagnosed with gastritis. A few weeks later, she said, she received a bill for $20,296.

A San Francisco County trial judge is expected to approve the settlement next month.