Mississippi hospital agrees to lower charges for uninsured patients

Patients without insurance will pay rates based on Medicare charges and on their income.

By Tanya Albert, AMNews staff. Aug. 23/30, 2004.

Lawyers who sued hundreds of nonprofit hospitals this summer for the way they bill uninsured patients painted their first settlement as a model for ensuring affordable care for people without coverage. But the hospital industry criticized the deal.

The agreement restructures billing practices at North Mississippi Health Services so that uninsured patients get a break in prices.

"People who are uninsured up to 400% of the federal poverty level would greatly benefit from this," said Richard Scruggs, the lead attorney who hashed out the settlement. "I'm not saying it's an absolute solution [to the uninsured patient issue], but it goes a long, long way."

Hospitals across the country have come under legal fire for the prices they charge uninsured patients and for aggressive bill-collection tactics, such as garnishing wages, against people unable to pay for their care. The proposed class-action lawsuits allege that nonprofit hospitals receiving tax breaks have a requirement to serve uninsured patients.

North Mississippi Health Services, which has 650 beds and more than $1 billion in annual billings, was not among the facilities sued. The hospital system agreed to the settlement to avoid the distraction and cost of a potential suit, said its CEO, John Heer.

Under the deal, uninsured patients who were being charged higher rates than those with private insurance or Medicare will now pay rates based on the hospital's Medicare charges. The lower an uninsured person's income, the less he or she would be charged.