Community Health Systems (CHS), which operates hospitals in numerous states, has been named as a defendant in a class action lawsuit filed in Arkansas state court. The lawsuit alleges that Northwest Medical Center, a hospital operated by CHS, rejected the otherwise valid health insurance of auto accident patients in order to extract higher payments for treatment that it provided. CHS and co-defendants named in the lawsuit are accused of deceptive and unconscionable conduct toward patients, as well as unjustly enriching themselves at the expense of patients.
If you would like more information about the Community Health Systems billing class action lawsuit, or if you are an accident victim who has been subject to unfair hospital billing practices, contact Attorney Group today. We offer free, confidential consultations, and there is no obligation to speak with us. If you choose to pursue a claim, we can connect you with an affiliated attorney who can assist you throughout the legal process.
Claim: Hospitals Refuse Health Insurance, Seek Direct Payment from Patients at Higher Cost
At issue in the hospital billing class action lawsuit is the way in which CHS seeks payment from its patients who have been injured in auto or other types of accidents. Normally, if a patient has health insurance and a hospital accepts that insurance, then the patient would only be responsible for deductibles and co-payments. The insurance company would pay the hospital for additional covered charges. In many instances, the hospital has agreed to a discount on the rates it bills to the insurance company in return for the assurance of payment.
When treating accident victims, however, the hospital may break from that arrangement—often at the expense of the patient. When a hospital seeks payment for treatment from an auto insurance company, whether it is the patients’ own medical payments coverage or the liability insurance of the driver responsible for causing the patients’ injuries, it is usually not required to accept a discount for its services.
For that reason, some hospitals will refuse to accept health insurance from an accident victim, even when its contract with the health insurance company requires it to do so. If the available auto insurance is insufficient to pay for the higher costs of treatment, the hospital might sue its patient for the difference, garnish wages to collect any judgment it obtains, and damage the patient’s credit—all when the patient had valid health insurance that could cover the costs.
Hospital’s Actions are “Deceptive and Unconscionable” According to Lawsuit
The effect of this practice is that a person who has paid premiums to be covered by health insurance is deprived of the benefits of that coverage by an arbitrary decision of the hospital, which is seeking to increase its revenue at the patient’s expense. In the CHS billing class action lawsuit, the defendants are accused of:
- Unconscionable, false and deceptive practices by refusing to submit valid health insurance claims and instead asserting liens, taking a patient’s medical payments coverage or taking money directly from patients in violation of their agreements with health insurance companies.
- Deceiving their patients to believe their bills were covered by health insurance when they, in fact, intended to seek payment for services from other sources, including directly from the patients, from the patients’ auto insurer, by placing liens on the patients’ property, or by submitting patients’ bills to collection agencies.
- Unjustly enriching themselves by taking payments from patients for which they were not entitled under law and which should have come from the patients’ health insurance providers.
The lawsuit seeks an injunction to stop the practice by the hospital, as well as compensatory damages for patients who have been subject to the allegedly wrongful billing practices and punitive damages to deter similar conduct by the defendants in the future.
Lawsuit Highlights a Widespread Problem
The Arkansas class action billing lawsuit against CHS highlights what is considered to be a widespread problem of hospitals taking advantage of their accident patients. Community Health Systems operates facilities in 29 states, although it is unknown whether they have engaged in the same practices in those states that they are alleged to have engaged in with Arkansas patients.
In 2014, St. Luke’s Hospital in Kansas City settled a class action complaint that alleged it wrongfully refused to accept the health insurance of approximately 930 auto accident patients. According to the Kansas City Star, the value of the settlement was approximately $3.5 million plus attorneys’ fee.
The article highlights some of the major problems caused by the practice:
Critics say the practice puts patients in the middle of disputes over medical bills that they thought would be paid with health insurance.
Auto insurance settlements can indeed help pay the hospital in many instances, but the inflated cost without the health insurer discount can take an outsize chunk from a pot of money that is also used to cover other expenses, such as lost wages, attorney fees and replacement vehicles.
Under the terms of the St. Luke’s settlement, the hospital is prohibited from seeking payment directly from accident victims and instead must bill patients’ health insurance providers.
Pursuing Claims May Help Curb Harmful Practices
When an accident victim must pay money to a hospital out of a settlement that should have been rightfully billed to the patient’s health insurance, that person is deprived of compensation that might have gone to cover other damages attributable to the accident. Hospitals that engage in these practices may be liable to their patients for this compensation in cases like the Arkansas CHS billing class action or the St. Luke’s case. Additionally, pursuing claims against hospitals that engage in these practices may prevent accident victims from being taken advantage of in the future.
Experienced legal counsel can help affected patients learn their rights and pursue compensation for any damages they have suffered.
Contact Us for More Information
If you are an accident victim who has been subject to wrongful billing practices by a hospital and would like more information about your options, contact Attorney Group today. Our consultations are free, confidential and without obligation, and if you have a claim we can connect you with an affiliated attorney who can assist you throughout the legal process. State laws limit the time you have to pursue a claim, so contact us today.