Uninsured class action settlement announced

Healthcare Financial Management, Dec, 2005

Providence Health System has settled a state class action lawsuit that claimed uninsured patients were charged higher hospital rates than insured patients, The Oregonian reported on Nov. 2. The settlement in state court, believed to be the first in the nation for the series of billing-related lawsuits generally rebuffed by federal courts, stated no dollar amount as it provides for both retroactive and prospective discounts. The newspaper did, however, note that plaintiff attorneys are to receive $350,000.

According to the report, Providence would provide an average discount of 31 percent for uninsured patients in the Portland area, applicable to the past four years and to the next two years of services. Discounts to uninsured patients in four of the system's other service areas will amount to approximately 11 percent.

On the Providence Oregon web site, CEO Russ Danielson stated, "While we disagree with the allegations made in the lawsuit, settling it made sense to avoid the tremendous costs associated with a trial and allow us to focus on our mission. The content of the settlement affirms our efforts over the past several years to make our charity care and financial assistance policies clearer and more consistent." The county circuit judge still must approve the settlement, expected to occur by July 2006.

To read the Providence response on the health system's web page, go to www.providence. org/oregon/scruggs.htm.