A not-for-profit health care system that includes nine hospitals in the Chicago metro area, Resurrection Hospitals’ stated mission was to provide compassionate, family-centered care to their communities, including free or reduced-price health care. This mission permitted Resurrection and other not-for-profit hospitals to operate as a charity, free from federal and state taxes. In return for tax exemption they were to provide health care for the uninsured, and not engage in business “directly or indirectly, for the benefit of private interests.”
Unfortunately some hospitals working under the not-for-profit axiom have historically ignored their mandate by charging uninsured patients significantly more than those who have insurance, Medicare or Medicaid. When these impoverished patients could not repay the excessive bills the hospitals then used aggressive and humiliating debt collection techniques to recoup the account balance.
Plaintiffs– a class of uninsured patients– alleged that Resurrection charged uninsured patients substantially more than those covered by insurance, failed to provide poor patients with an adequate opportunity to apply for financial assistance with their bills, and used unjust and extreme measures to collect on overdue accounts. While Resurrection denied the allegations against them we were able to negotiate a settlement which greatly benefited our clients and all uninsured citizens of Chicago.
As a result of the settlement Resurrection agreed to make substantive changes in their business procedures, reduce rates charged to uninsured patients and reform its collection techniques and policies. These changes included but were not limited to:
– Ensuring qualified and appropriately trained financial counselors to work with uninsured patients to maximize government assistance and create a workable payment schedule for their medical costs
– Giving all uninsured patients a base discount of 25%, with additional discounts given to anyone under 400% of the federal poverty limit
– Instituting a cap on yearly payments for treatment of catastrophic injuries at 15% of the patient’s annual gross income; at 10% if the patient is under 400% of the federal poverty line
Under the terms of the settlement uninsured patients who were treated between September 16, 2001 and September 19, 2008 were eligible for redress. This affected over 200,000 patients. If a patient had an outstanding balance on their account for treatment during this period this balance was subject to recalculation. Those who were treated during this period and have fully paid off their account were eligible to receive a refund, generally distributed in the form of a health care voucher. There was a base refund or recalculation of 25% for all uninsured patients, while additional refunds were calculated as follows:
More than 300% but less than or equal to 400% of the Federal Poverty Income Guidelines
40% Discount off of Gross Charges for medically necessary hospital services
More than 200% but less than or equal to 300% of the Federal Poverty Income Guidelines
60% Discount off of Gross Charges for medically necessary hospital services
More than 100% but less than or equal to 200% of the Federal Poverty Income Guidelines
80% Discount off of Gross Charges for medically necessary hospital services
Less than or equal to 100% of the Federal Poverty Income Guidelines
Full Financial Assistance (100% Discount off of Gross Charges for medically necessary hospital services)
The settlement allocated $3 million for refunds, recalculations and health care vouchers to the class. Millions of dollars more will be saved by uninsured patients in the future as a result of the programmatic changes instituted.
If you have a similar case, please do not hesitate to call M&S today at (202) 822-5100.