Thursday, August 05, 2004

Nonprofit class actions: 1st settlement announced.

Modern Healthcare is reporting that "[s]ix-hospital North Mississippi Health Services, Tupelo, reached an agreement with a Mississippi law firm to provide an estimated $150 million in refunds, debt forgiveness, discounts and free care to about 48,000 eligible uninsured patients. The $150 million would cover the system's obligations under the agreement for the past three years and into the future. The system is the first to address the issue with a group of plaintiffs' attorneys that has filed class-action lawsuits against 40 not-for-profit hospitals and systems covering more than 300 hospitals in 21 states. The lawsuits allege that the hospitals overcharge uninsured patients and are unfair in pursuit of payment."

There may be less here than meets the eye. This system has not yet been sued; it resides in Richard Scruggs' backyard; and it doesn't appear to cost the hospital system any real money that it wasn't already planning to spend:
North Mississippi had not been named in any of the lawsuits. However, the system reached an agreement with attorney Richard Scruggs and the Scruggs Law Firm of Oxford, Miss., because 'there are several community issues we need to be addressing,' North Mississippi's chief executive officer, John Heer, said in a system news release. A lawsuit would be distracting, and the proposed discounts were similar to North Mississippi's current policy, Heer said.

In a national teleconference, Scruggs said the attorneys group has approached several not-for-profit hospitals that have not yet been sued about reaching an agreement. Scruggs praised North Mississippi and called its agreement with the firm 'a very compelling template for the other hospitals and the American Hospital Association.' Under the agreement, which is awaiting approval by a federal judge, North Mississippi will not charge eligible uninsured patients more than 10% of their annual income. It also will provide free care, prospectively and retrospectively, to uninsured patients earning up to 200% of the federal poverty level and for uninsured patients earning more, it will establish a sliding fee scale based on Medicare rates. Scruggs said the system can ask the federal judge in U.S. District Court, Aberdeen, Miss., to revise the agreement if the terms prove too costly.
The teleconference/news conference can be downloaded here (follow links to main litigation page).
posted by tommayo, 5:23 PM

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