Hospital Monitor, Principle 2: Patient's Rights to Health Care

COURT RULES THAT ADVOCATE HEALTH CARE NETWORK MAY BE LIABLE FOR PRICE GOUGING
Class Action Lawsuit will Proceed on All Counts

January 27, 2006 Chicago, IL – The Circuit Court of Cook County ruled today that a class action lawsuit alleging that Advocate hospitals overcharge uninsured patients and fail to inform them about the availability of free or discounted charity care may proceed.

“This is a tremendous legal victory for the uninsured,” said Joseph Geevarghese, Executive Director of the Hospital Accountability Project. “Advocate is now on notice that the practice of charging the highest prices to the people least able to afford health care is not only wrong but may be unlawful.”

Circuit Court Judge Barbara Disko made the same point in her opinion in the case titled Vanessa Cristiani et al. v. Advocate Health Systems Care Network, Inc. et al., No. 03 L 14635 (Circuit Court of Cook County). Judge Disko said that “a 50% reduction of costs [to insurance companies] could constitute a violation of the Consumer Fraud Act.”

Judge Disko also ruled that the failure to provide notice of the availability of charity care could constitute a deceptive business practice.

The Cristiani lawsuit alleges that Advocate hospitals charge uninsured patients more than double the rates the hospitals pay to insurance companies. Insurance companies often negotiate lower rates with hospitals because they can use their bulk purchasing power as a leverage tool.

“Although the Court understands that [Advocate] has the right to negotiate a lower rate with insurance companies, this Court does not believe that charging Plaintiffs almost twice as much as that charged to an insured person should be allowed,” Judge Disko said.

“This decision comes at a crucial time for hospital systems like Advocate,” said Geevarghese. “The U.S. Congress is looking into hospital abuses of their tax exempt status, and Attorney General Lisa Madigan has introduced legislation designed to curb these abuses and increase charity care.”

“Advocate and other tax exempt hospitals enjoy tremendous benefits under our tax laws,” said Geevarghese. “It is absolutely astounding that Advocate engages in practices that a court has ruled may be deceptive.”

Additional information may be found here: Patients file class action lawsuit against Advocate Health Care --- November 19, 2003

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Hospital Accountability Project, Service Employees International Union
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