Class actions suits against non-profit hospitals.

Julie Appleby has a review piece in today's USA Today. From the sidebar:

• Several high-profile law firms have filed 31 cases against non-profit hospitals and hospital chains since late June. The cases make similar allegations, including: Some hospitals violate an implicit contract with the government to provide charity care in exchange for tax-exempt status by charging uninsured patients more than the insured or aggressively pursuing debts from low-income patients.
• Some facilities have large cash reserves they should use to provide charity care.
• They allow for-profit entities, such as doctor groups, to use their facilities to earn a profit.
• Hospitals named include the Cleveland Clinic; New York-Presbyterian; Sutter Health in Sacramento; Advocate Health Care Network in Chicago; Phoebe Putney Health Systems in Albany, Ga.; Baptist Health Systems in Alabama; and Catholic Healthcare Partners in Cincinnati.

The article offers some quotations I haven't seen in previous reporting:

Patient advocates, who were the first to publicize some of the concerns now included in Scruggs' cases, have mixed thoughts on the lawsuits. "This is a huge wake-up call," says Claudia Lennhoff of the Champaign County Health Care Consumers group in Illinois.

They also worry about the financial effect of the cases on non-profits.

"Having more scrutiny of billing practices is a good thing, but the risk is we're not taking on big tobacco, we're taking on a vital service," says Mark Rukavina of the Access Project, a national resource center that works with local groups on health care issues. "It's an industry I want to preserve, not bring down."

Some health law attorneys are skeptical that Scruggs' arguments will succeed.

"The behaviors they're targeting (billing and collection practices against the uninsured) are atrocious in some circumstances, but they're not illegal," says Gregg Bloche, a law professor of health law at Georgetown University. "The suits will fail."

Nor do they think there is an implied contract between hospitals and the government.

"That's never been recognized in the law," says Stuart Gerson, a partner at Epstein Becker & Green in Washington, D.C., who represents a hospital being sued. "The idea of an individual citizen, a taxpayer, seeking to enforce charitable obligations is, at least, a very novel argument that finds little support."

If any laws are being broken by the common hospital practice of allowing for-profit doctors to use their facilities, or if facilities are improperly steering business to trustees' companies, those arguments should be heard by taxing authorities or federal and state antitrust or anti-kickback regulators, Gerson says.

The lawsuits are renewing debate over the legal and ethical responsibility the nation's non-profits have to provide charity care.

"The IRS has never been really clear about what the grant of tax-exempt status means," says attorney John Reiss of the law firm Saul Ewing in Philadelphia. "It's never been clear that it actually commits you to providing any particular amount of charity care or anything else."

Non-profit hospitals say they provide a variety of charitable services. Hospitals have different ways of classifying such care, with some saying charity is providing medical services to anyone who walks in the ER, regardless of their ability to pay.

Others consider write-offs for bad debt charity care or financing community services, such as supporting health clinics.