A lawsuit scheduled for argument before the Indiana Supreme Court next week pits two patients who received medical care in previous years against the state's largest hospital group. As noted by commentators, "the legal stakes are high," with the case attracting considerable interest nationally among hospital administrators and medical groups.
At first blush, many people might reasonably conclude that the matter must involve a claim of hospital negligence or medical malpractice, but what is actually alleged is bad faith on behalf of IU Health, which runs a number of hospitals in Indiana.
Specifically, the charge against IU Health is that it engaged in differentiated billing practices based on whether patients were insured or uninsured. The two patients suing the medical group contend that they, as uninsured patients, were grossly overcharged for medical treatment. One patient paid close to $16,000 for care that she states would have cost an insured patient about $7,300. The other states that the hospital would have charged him "significantly less" if he had been insured.
The matter was initially dismissed by a lower Indiana court, but then reversed on appeal. The medical group is seeking reversal from the state Supreme Court.
That might not happen. A central focus of the case is on long-established state law that requires a contract without a set price to be "reasonable," and one often-applied standard for that is what other consumers were charged for the same service.
A relatively new federal law now mandates that hospitals bill uninsured patients similarly to insured customers. IU Health claims that it fully complies with that duty, but the instant suit involves billings that preceded the change.
As such, patients can sue over past billing practices, and some people closely watching the IU Health case say that a pro-plaintiff ruling could open the door for many other uninsured patients to also file claims. Those claims could include multimillion-dollar class action filings against IU Health and other entities.
Source: Insurance Journal, "Lawsuit targets Indiana's largest hospital group," May 1, 2012