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Sunday, August 08, 2004

Attorney Sues Hospital Chains for Overcharging the Uninsured

On August 6, 2004 newswires reported that Alabama attorney, Archie Lamb who is fresh from taking on HMOs, has his sights on the for-profit hospital industry. He alleges these hospitals generated hundreds of millions of dollars in profits by billing uninsured patients inflated prices. He has filed separate suits against HCA and other for-profit chains. The suits were filed in Florida and Nevada.

The suits allege the hospital operators violated state unfair-trade-practices laws by charging the uninsured three to four times more than what commercial insurance and Medicare patients paid for for the same services.

I have discussed these unethical for-profit tactics on this page for months.

The sad fact is that when these hospitals are not paid, they employ strong-arm collection tactics - garnishing wages, seizing homes and assets and seeking arrest warrants. The financial impact on patients is severe and some declare bankruptcy.

In the past, hospitals such as Rose Medical Center, an HCA facility would charge and demand high "sticker prices" - the hospital blamed it on obscure Medicare rules. I knew better as it was clear that Rose Medical was looking for profit. In addition, when you tell the uninsured upfront the high cost and demand it you will discourage the uninsured from coming to your hospital - this guarantees a steady stream of reliable paying customers. What for-profits hospitals enjoy next to excessive profits is a regular income stream. Of course, it doesn't hurt when your well-to-do patients do not see the unseemly poor patients in the bed next to them - don't they belong in the county hospital? Of course that is exactly what is going on in Denver. Most of the poor go to the Denver Health Center of the University system. That is a reason why the HCA hospitals provide so little care to the unisured in Colorado compared to these other systems.

Unfortunately for HCA and other for-profits hospitals, in February 2004 HHS Secretary Tommy Thompson clarified Medicare's rules. Hospitals could no longer blame obscure regulations for overcharging the uninsured and pursue tough collection policies.

I cheer Archie Lamb on in his efforts. Before this all I could do was to write about the subject. He can actually do something to stop these unethical practices.

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