Settlement Reached Between Chicago Catholic Hospitals and Uninsured Patients Who Were Overcharged

The Quad-City Times reports that almost 2,000 uninsured patients are filing claims for discounts on their bills from eight Chicago and suburban Catholic nonprofit hospitals following the settlement of a class-action lawsuit. An agreement approved Monday resolves claims covering more than 200,000 patients of Resurrection Health Care, one of the area’s largest hospital systems. The lawsuit, filed in 2004, alleged Resurrection hospitals overcharged uninsured patients by millions of dollars thereby violating the Illinois Consumer Fraud and Deceptive Business Practices Act.

Plaintiffs in the lawsuit were low-income, uninsured patients who claimed no one told them about the hospitals’ charity care programs and collection agencies hounded them when they did not pay their bills. These patients ended up paying small monthly amounts on bills totaling many times more what insurance companies would pay for the same care for insured patients.

In the settlement, Resurrection agreed to modify its billing structure and reduce charges to uninsured patients. The hospitals will recalculate bills for those who file claims and give refunds and vouchers to people who have already paid $500 or more.

The hospitals deny any wrongdoing and agreed to the settlement to avoid continued litigation costs and end the controversy, said Resurrection spokesman Brian Crawford. Notices were sent in November and December to another 220,000 patients who may qualify for discounts.

The lawsuit and other similar litigation have led to two new laws in Illinois that protect uninsured patients. A 2006 law sets standards for hospital bill collectors and a 2008 law, which goes into effect in April, puts a ceiling on charges to the uninsured.

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