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• Many have voiced alarm and concern that the lawsuits are diverting resources away from care for the uninsured populations they claim to be helping and away from long-term, sustainable solutions to the uninsured problem.
At Alegent Health
The Facts
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Within the last 90 days, plaintiffs' lawyers representing groups of uninsured and low-income individuals filed more than 40 unprecedented civil class action lawsuits against not-for-profit healthcare systems in more than 20 states. Among the lawyers leading the attack is Scruggs Law Firm, a group that helped wage litigation against tobacco companies in the 1990s.
The lawsuits claim that the healthcare systems violated their obligation as tax-exempt organizations to provide charity care. Plaintiffs contend defendants 1) do not provide ample charity care; 2) use aggressive bill collection tactics; and 3) charge uninsured patients full price, which can be more than insured patients actually pay.
Lawyers are seeking damages and the creation of a trust, financed by the health systems, which would fund healthcare for the uninsured. Recently, Northern Mississippi Medical Center, which was not involved in the class action lawsuits, settled with the Scruggs Law Firm, agreeing to terms of charity care for uninsured and low-income patients.
Not-for-profit hospitals have only begun to respond to the accusations by helping the public better understand their charity care practices and the framework of policies and procedures in place to emphasize quality care, dignity and respect for uninsured and low-income patients.
Others are dismayed that the not-for-profit healthcare systems, an industry providing more charity care than any other private industry in the country, are under attack for not providing enough care. Many hospitals sued have had to seek experienced class action defense law firms from out of state - law firms that can charge as much as $450 an hour - which diverts limited resources away from healthcare and charity care. Typically, the lawyers profit more than the plaintiffs in class action lawsuits.
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