Tenet Settles Some Class-Action Suits Related To Hospital Charges for the Uninsured

Texas-based Tenet Healthcare on Thursday agreed to settle some lawsuits alleging that the hospital chain overcharged uninsured patients, USA Today reports (Appleby, USA Today, 3/11).

The class-action lawsuits allege that underinsured and uninsured patients were overcharged for prescription drugs and services at Tenet hospitals in Alabama, California, Florida, Louisiana, Missouri, Pennsylvania, South Carolina, Tennessee and Texas (AP/Wall Street Journal, 3/11). USA Today reports that Tenet "is working on a turnaround after a series of troubles in recent years," including federal and state investigations of its Medicare billing practices, a "rapid escalation" of prices, allegations that two California doctors performed unnecessary heart surgeries and allegations by some patient advocates that uninsured patients were charged the highest rates within the hospital system.

Under the settlement, which still needs court approval, uninsured patients would be guaranteed discounts equal to those of managed care providers, regardless of the patient's income (USA Today, 3/11). Tenet also has agreed to provide financial counseling to uninsured patients for four years and will post information about how to access such services on hospital Web sites and in hospitals.

In addition, the settlement dictates that Tenet would provide patients with "reasonable" payment options and payment schedules and would not pursue legal action against any unemployed patients for nonpayment, the AP/Wall Street Journal reports. Tenet said it also would reimburse uninsured patients who received treatment at its hospitals between June 15, 1999, and Dec. 31, 2004, and were charged more than a certain percentage of the hospital's gross charges. Uninsured patients who received services at Tenet hospitals during that period would be offered discounts on outstanding unpaid bills. Under the settlement, Tenet would donate $4 million to a health care-related charity of the plaintiff's choosing.

If the settlement is approved, pending class action lawsuits in nine states would be dismissed (AP/Wall Street Journal, 3/11). In a statement, Tenet said that it will continue to dispute the allegations of the lawsuit and admit no wrongdoing.

According to a recent Securities and Exchange Commission filing, Tenet has set aside $30 million as a minimum liability to cover the cost of the settlement (USA Today, 3/11). Tenet officials said approval of the settlement likely will take several months (AP/Wall Street Journal, 3/11).

K.B. Forbes of Consejo de Latinos Unidos said, "With new leadership at Tenet, there's been a dynamic change where working with patients comes first."

Jim Unland of Health Capital Group said, "This is right on the money, right where the industry should be."

Tenet General Counsel E. Peter Urbanowicz said, "This settlement reflects Tenet's ongoing commitment to provide for treatment to patients without health insurance" (USA Today, 3/11).