Valley Health owner working on new system for billing the uninsured

Michelle Swafford

Monday, Aug. 9, 2004 | 10:30 a.m.

Universal Health Services Inc., owner of four Las Vegas Valley hospitals, said it is working on a new system of price discounts for uninsured patients.

In the meantime, Alabama lawyer Archie Lamb is suing Universal Health and its competitor HCA Inc. in Clark County District Court on allegations that the hospitals gouge uninsured patients, charging them more than insurers pay for the same procedures. The companies also are accused of using overly aggressive tactics to collect on the charges and of failing to inform uninsured patients about discounts they may qualify for.

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

King of Prussia, Pa.-based Universal owns Valley, Desert Springs, Summerlin and Spring Valley hospitals, and Nashville, Tenn.-based HCA owns Sunrise, MountainView and Southern Hills hospitals. Southern Hills is not mentioned in the lawsuit but could be added to the complaint, Lamb said.

Mike Tymczyn, spokesman for Universal's Las Vegas Valley operations, said the company has "not been served a complaint and has not had the opportunity to review the allegations with counsel."

"However, Universal Health Services believes that its hospitals are in compliance with all applicable laws relating to the billing to and collection from their patients," he said. Tymczyn declined to comment further.

Universal's Chief Financial Officer Steve Filton told investors in July during the company's second-quarter earnings call that the company is working on a uniform discount for uninsured patients who meet certain income requirements. He said each hospital market varies and the uniform discount would likely be based on a percentage of Medicare's reimbursement rate.

Las Vegas resident Debbie Poblocki is one of the plaintiffs in the lawsuit against Universal. She went to Valley Hospital in late 2002 for hernia surgery and didn't have health insurance as a self-employed hairdresser.

Poblocki said she was required to pay half of the $10,000 bill up front before the hospital would treat her. She said she borrowed money from a family member so she could have surgery. A month later she had to have another surgery to remove an infection from the incision site, which required her to pay another $5,000 up front. Poblocki alleges the hospital harassed her and threatened to place a lien on her home and garnish her wages. She said Valley has declined payment plans that were not on its terms.

Los Angeles resident Alicia Hamilton is one of the plaintiffs suing Sunrise Hospital. She was flying from Tampa, Fla., to her home when she said she became violently ill on a flight that had a stop in Las Vegas. She said she was taken to Sunrise for gallbladder problems and admitted under the assumption it would be removed.

Hamilton alleges that she was in the hospital for six days and was told varying stories by physicians that ranged from her health was critical to she was well enough to go home. She alleges that Sunrise did not immediately remove her gallbladder because she was uninsured and that she was "grossly overcharged" because the hospital waited to do surgery and failed to inform her of potential discounts on the charges.

When Hamilton was released, she received a $53,000 bill from Sunrise. She said the hospital has reported the bill to the major credit bureaus and has tried to harass her by telephone.

"We're not sub-class people because we don't have insurance," Hamilton said.

HCA spokesman Jeff Prescott said HCA launched a discount program last year and 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 of 200 percent of the federal poverty level, which is $37,700 for a family of four.

This fall, HCA will offer a new discount policy for uninsured patients that will be comparable to managed care or Medicare charges, Prescott said.

He said the lawsuits do not address the main problem, which he says is that 44 million Americans lack health insurance.

Nevada law requires hospitals to offer a 30 percent discount to uninsured patients, but Lamb alleges those discounts are not being offered.

Lamb is nationally known for his fight against health maintenance organizations that allegedly underpaid physicians for their services. He negotiated multimillion-dollar settlements with Cigna Corp. and Aetna Inc. and has litigation pending against several other insurers.

He said the hospitals charge uninsured patients between four and six times the price of medical care, which is more than insurers and Medicare pay for their beneficiaries.

K.B. Forbes, executive director of Consejo de Latinos Unidos, a national advocacy group based in Los Angeles, said Medicare typically pays 1 percent above the cost of a hospital procedure and insurers pay about 12 percent above the cost.

For example, if a procedure costs $1,000, a hospital would receive $1,010 from Medicare or $1,120 from insurers for the procedure, Forbes said. He estimates that an uninsured patient would be expected to pay $2,500 for the same procedure.

"They (hospitals) are making substantial profit off of the uninsured," Forbes said. "That's how they make their books."

About half of all personal bankruptcies are filed because of hospital debt, Forbes said. He has been working with Lamb to find patients who were allegedly gouged and harassed.

Consejo de Latinos Unidos has criticized Tenet Healthcare, which formerly owned North Vista Hospital in North Las Vegas, and Catholic Healthcare West, which owns Henderson hospitals St. Rose Dominican Hospitals -- Siena Campus and St. Rose Dominican Hospital -- Rose de Lima Campus. The Henderson hospitals have not been sued.

San Francisco-based Catholic Healthcare West expanded its income guidelines for uninsured patients in April. The hospital operator said it would offer free medical care to uninsured patients whose incomes are at or below 200 percent of the poverty level.

Catholic Healthcare West said it would charge uninsured patients who earn up to 300 percent of the federal poverty level, which is $56,550 for a family of four, rates that are comparable to Medicare.

Mississippi lawyers Richard Scruggs and Don Barrett, who obtained millions from tobacco lawsuits, have sued numerous nonprofit hospitals in 21 states alleging that uninsured patients were overcharged by so-called charitable hospitals and then hounded for payments.

The Associated Press reported that a nonprofit Mississippi hospital system that was sued agreed Thursday to a settlement that includes refunding uninsured patients' payments and providing free care to uninsured patients for the next seven years. The settlement is subject to federal court approval and also stipulates that the hospital operator will not try to collect more than 10 percent of the cost of procedures from any uninsured patients, even if they can afford more.