A Medical Device Daily

Kelly Dermody, of the law firm of Lieff Cabraser Heimann & Bernstein, reported the settlement of a class action lawsuit filed against Scripps Health (San Diego) regarding pricing and collection practices for uninsured patients at its affiliate hospitals. Dermody is court-appointed lead counsel for the class.

The settlement, which will be considered for preliminary approval before San Diego County Superior Court Judge Steven Denton today, resolves the claims against Scripps and its affiliated hospitals.

Class members will be entitled to make a claim for 35% refunds or deductions from their prior hospital bills for treatment occurring between July 19, 2002, and the date of preliminary settlement approval.

Low-income uninsured patients may also seek to qualify their past bills for free or reduced care beyond the 35% discount. Scripps also agreed to maintain compassionate pricing and collections policies going forward, including across-the-board discounts for all uninsured patients, regardless of income; enhanced charity discounts to enable moderate-income uninsureds to receive even greater discounts; financial counseling to uninsured patients to help them qualify for discounted pricing or receive extended payment plans; increased communications to uninsureds about Scripps pricing policies; and limits on collections practices and collections lawsuits. In addition, Scripps has agreed to maintain its uninsured pricing and collections policies going forward for at least four years, among other things. Scripps denies wrongdoing and liability in the case.

The proposed settlement class includes any patient who from July 19, 2002, to the date of the court’s preliminary approval order;

• received any form of medical treatment as a result of initially presenting at the emergency department of a Scripps hospital or affiliate;

• were uninsured at the time of treatment; and

• did not receive any discount or waiver of the charges for treatment.

This class action originated in 2006, when uninsured patient Phillip Franklin filed a class action cross-complaint against Scripps, a not-for-profit hospital system, after Scripps sued Franklin through a collection agency. A judge then rejected the attempt by Scripps to dismiss an initial class action lawsuit against uninsured patients (Medical Device Daily, Nov. 28, 2006). In June 2007, the court granted the case class action status.

Franklin, uninsured at the time he received treatment, alleged that he and other uninsured patients at Scripps were charged unreasonable and excessive rates by the hospital.