Group Files Lawsuit Against Tenet Alleging Hospital Chain Inflates Prices for Uninsured Latinos
Santa Barbara-based Tenet Health Care Corp. was sued yesterday for allegedly "severely overcharg[ing]" uninsured Latino patients for medical care and then writing off their unpaid bills as charity care for reimbursements by the state and federal governments, the Washington Post reports. The lawsuit was filed in Orange County Superior Court by a foundation started by K.B. Forbes, a former press aide to presidential candidate Patrick Buchanan. Forbes said yesterday that he founded the organization, called Consejo de Latinos Unidos, in order to work on the problems he discovered in an investigation of Tenet. The hospital chain, which owns or operates 111 hospitals in 17 states -- with largest number in California -- denied the allegations in the lawsuit. According to Larry Jackson, an attorney for Consejo de Latinos Unidos, Tenet has charged uninsured Latino patients "anywhere from four to seven times" what the company charges insurers for similar services -- discrepancies he said are "so extreme" that they violate California's fair business practices statute, which states that providers may collect only "reasonable and customary charges." Jackson said, "Tenet has shown a real tendency to discriminate against and exploit those most vulnerable in this society."
The suit also alleges that when Latino patients cannot pay the inflated bills, Tenet often deems the care provided to them as charitable, allowing them to collect "disproportionate share hospital" funds from the state and federal government for providing a particularly high level of care to the uninsured. According to Forbes and Jackson, Tenet's financial reports show that disproportionate share funds account for 38% of the company's net income in California. Forbes, a Spanish-speaking publicist, said he "stumbled onto the problem" of Latinos being overcharged while he was "testing the market for a new form of medical insurance" and decided to launch an investigation with assistance from California's Spanish-language media organizations.
Harry Anderson, a Tenet vice president, rejected the allegations made in the lawsuit, calling it a "misguided, ill-advised legal broadside, combined with a media onslaught, intended to inflict damage" on the company. Anderson acknowledged that Tenet's rates for uninsured patients are usually higher than the ones negotiated with managed care companies but said this practice is "typical" of the health care industry. He also disputed the allegation about Tenet's use of charity care, saying that "unpaid bills do not qualify for [disproportionate share] payments; only charity cases do." He added, "We dispute that anything improper or illegal has taken place" (Broder, Washington Post, 2/7).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.