I charge more for some patients, now a patient is suing me
In Morrell v. Wellstar Health System, a patient argued that the hospital violated the Georgia Uniform Deceptive Trade Practices Act because it charged unreasonable rates and charged the uninsured higher rates than insured patients. The Georgia statute at issue prohibited fraudulent misrepresentation, false advertising, or false and misleading statements. The court found nothing illegal about the hospital’s policies because the hospital made patients aware of its fees. Despite this, and other similar decisions, some uninsured patients have been successful in their consumer protection claims.
In Servedio v. Our Lady of the Resurrection Medical Center, a lawsuit was brought by several uninsured patients who owed the hospital more than $60,000. None of the patients were able to pay for their medical services and the hospital vigorously tried to collect the debt, even bringing a lawsuit against one of the patients. The patients claimed they were charged inflated rates—double and triple what an insured patient would pay. They were not considered for charity care, and excessive collection methods were used in collecting their debt. In fact, Resurrection Medical Center had the highest charge-to-cost ratio of any Chicago hospital. The Illinois court ruled that medical services sold by a hospital were a form of trade or commerce, and that the hospital’s conduct was immoral, unethical, oppressive, and clearly against public policy.
Litigation entitled In re. Sutter Health Uninsured Pricing Cases involved a group of uninsured patients at a California hospital who alleged that they were charged unreasonable rates compared to the rates charged to insured patients. The California Supreme Court noted that under the California Unfair Competition Law, any “unlawful, unfair, or fraudulent business act or practice” was a violation. Ultimately Sutter agreed to a policy that provided discounts to uninsured patients.
Whether Dr. Cost loses his lawsuit will be determined by his state statutes on unfair practices. He will likely need advice from a health law attorney.