Hospital Settles for $423 million in Billing and Collection Case

Catholic Healthcare West, a nonprofit company with 43 hospitals in California, Nevada and Arizona will have to pay out as much as $423 million in refunds and discounts to more than 780,000 uninsured patients, thanks to a settlement reached in June and finally approved on Thursday.

The company was accused back in October of 2005 of overcharging uninsured patients – and then using aggressive debt collection tactics when the uninsured didn’t pay.  Hospitals are in the practice of charging higher rates for the uninsured in an attempt to make up for lower government reimbursements in Medicare and Medicaid.  However, Catholic Healthcare West allegedly took that practice to the limit – and then, like, a toe beyond that.  Hence the lawsuit and settlement.

As part of the settlement, Catholic Healthcare West also agreed, for the next four years, to charge uninsured patients the same reduced rates offered to patients in managed-care plans, and to provide free or discounted care to uninsured patients with low to moderate incomes, on a sliding scale up to $100,000 a year for a family of four.

The company is also required to apply “more compassionate collection policies” for those patients who fail to pay their bills.