Lawsuits claim gouging by Las Vegas hospital giants

Michelle Swafford

Friday, Aug. 6, 2004 | 11:17 a.m.

The Las Vegas Valley's two largest hospital operators were sued Thursday on allegations that they are "gouging" uninsured patients and using predatory collection practices.

King of Prussia, Pa.-based Universal Health Services Inc. and Nashville, Tenn.-based HCA Inc. are accused of charging uninsured patients between four and six times the price of medical care, said Archie Lamb, an Alabama attorney who filed the lawsuits in Las Vegas and Miami.

In addition to the two Las Vegas lawsuits, Lamb filed a lawsuit in Miami against Naples, Fla.-based Health Management Associates Inc. He is seeking national class-action status on all three lawsuits.

Nevada law requires hospitals to offer at least a 30 percent discount to uninsured patients for their medical treatment.

"We're finding that those discounts are not being offered," Lamb said. "The UHS (Universal Health) system is notorious for price gouging. We also sued HCA. They've been inundated with lawsuits over the years. They are the poster child for what one should not do when you operate a hospital system."

Lamb was in Las Vegas today to hold a news conference about the pricing practices and enable some of the uninsured patients he represents to discuss their experiences.

Consejo de Latinos Unidos, a national advocacy group, is working with Lamb to provide patients who think they have been overcharged.

"We are sick and tired of the egregious and dispicable behavior by these hospitals like UHS, HCA and HMA (Health Management Associates)," K.B. Forbes, executive director of the group said at the news conference.

"We want to make sure hospials treat the uninsured with dignity and respect. We're talking about middle-income people who are not healthy or wealthy enough to have private insurance."

Debbie Poblocki, a Las Vegas resident and self-employed hairdresser, said she visited UHS' Valley Hospital in December 2002 for surgery on a hernia but had no health insurance.

"I was forced to pay 50 percent of the bill up front -- which was $5,000," she said. She said she ended up receiving money from family to have the surgery.

One month later, she said, she returned to Valley to receive treatment for an infection from the surgery and was again forced to pay $5,000 up front. Since then, she says, she has been harassed by phone and mail.

"I paid more than an insurer would, and up front no less. And they continue to hire a lawyer and harass me," she said.

Her bills remain outstanding, but she hopes to pay them off with results of the litigation.

Lamb said he was not expecting free care for the uninsured, but he said he does expect hospitals to offer reduced rates and any subsidies that may be available to uninsured patients.

"We think the hospitals ought to be able to run a business and run a profitable business but not make excessive profit over and above what is necessary to operate," he said. "We're trying to get fair pricing."

When uninsured patients are unable to pay their "inflated rates," the hospitals write off the bills as a tax write-off or as charity care and bad debt, which skews the amount state and federal governments reimburse the hospitals because of the inflated rates, the complaint said.

The complaint also alleges that in some cases HCA and Universal Health attempt to collect payments from uninsured patients through "harassing and predatory collection efforts including lawsuits, which result in property liens and wage garnishment."

Lamb said everything uninsured patients own should not be at risk because they need medical care.

Lamb said the uninsured patients that are most affected are not indigent or elderly, but are "people who are working three jobs whose only access to health care is through the emergency room at 3 a.m. or 4 a.m."

HCA spokesman Jeff Prescott said HCA launched a discount program in March 2003 and also agreed to not put a lien on homes valued at less than $300,000.

The current discount program provides free medical care to patients who have an income at or below 200 percent of the federal poverty level, which is about $37,700 for a family of four. Uninsured patients who have higher incomes but earn less than 400 percent of the federal poverty level can still receive a discount of up to 65 percent, Prescott said.

This fall, HCA will offer a new discount policy for uninsured patients that will be comparable to managed care charges, Prescott said. He said the new discounts "conceivably would make the rates lower."

Discount programs will not solve the main issue though, Prescott said.

"The main point is that this entire issue is skirting around the important element that there are 44 million Americans that don't have any health insurance," Prescott said. "That's what needs to be fixed. The issue is not about billing or prices. The issue is about people not having insurance"

Lamb said HCA's discount policies were a "step in the right direction," but companies tend to make empty promises.

Universal Health could not be reached for comment.

Shares of HCA were down 83 cents, or about 2 percent, to $37.26 in late morning trading on the New York Stock Exchange. Shares of Universal Health were down 74 cents, or 1.7 percent, to $43.98.