Baptist Health System (BHS), Birmingham, is one of more than 20 not-for-profit hospitals nationwide gearing up to fight lawsuits challenging their charitable organization status.
Attorney Richard Scruggs is leading the charge against the hospitals. Scruggs is the same Mississippi lawyer who won a massive class-action lawsuit against the tobacco industry, and now he and others are trying to do the same with nonprofit hospitals.
The suits allege the hospitals involved engage in unfair billing practices, using intimidating tactics to collect on past due bills.
The lawsuits also claim the hospitals amass monetary reserves by providing as little charity care as possible and inflating the amount of charity care provided.
Beth O’Brien, CEO for BHS, said the system intends to “vigorously fight the allegations.”
“We have a very strong record in charity care,” she said. “We stand on our record, we stand on our work.”
The suits were filed the week of June 16–25 on behalf of individuals in state federal courts, but lawyers are asking that the courts make them class-action cases.
The lawsuit against BHS, filed in Birmingham’s federal district court June 16, alleges that BHS engaged in unfair billing practices in the case of single mother Rhonda Kizzire of Alabaster.
Billing allegations
Filed by lawyer Archie Lamb, the suit said Kizzire is on the brink of financial ruin because of BHS collection practices after she received care for two of her children at Baptist Medical Center Shelby’s emergency department. Payment to BHS is now garnisheed from her wages.
Among other charges, the lawsuit alleges BHS bills uninsured patients the highest possible cost for care, which is “substantially more” than those with insurance are charged.
In a written statement, O’Brien said BHS considers the charges “frivolous and without merit.”
Although not able to give specifics of BHS charity determinations and practices because of the lawsuit, O’Brien said BHS has always worked with patients to provide care regardless of their ability to pay.
“Our practice is to offer options on a case-by-case basis to best meet the individual’s financial situation, whether the need is for scheduled payment plans, delayed payments until a patient returns to work or for the debt to be written off as charity care.”
O’Brien cited BHS’ mission statement of providing health care that reflects the healing ministry of Jesus Christ. “Our mission reflects who we are,” she said. “Everything Baptist is involved in is an expression of that mission.”
During the last budget year, O’Brien said, BHS provided $75 million in charity care.
The system also has many programs geared toward community health such as free immunizations for children, the M-Power Clinic, Chandler Mountain Hispanic Clinic, the BHS Congregation Health Program and mammograms for medically under-served women.
O’Brien said it is impossible to predict when the cases and issues would be resolved, because “this is now a national question and so not easily solved.”
The lawsuits come as Congress is holding hearings investigating the practices of nonprofit organizations such as hospitals and colleges.
According to reports, the House Ways and Means Sub-committee on Oversight is looking at billing practices, the definition of a nonprofit organization and the enforcement of those qualifications, among other issues.
The American Hospital Association (AHA), of which BHS is a member, told the panel that the hearings highlight the need for reducing the number of the uninsured in America. AHA has also been named as a conspirator in the lawsuits filed nationwide.
As reported by AHA, AHA Board Chairman David Bernd testified June 22 that hospitals have always helped those who cannot pay for their care. He noted that charity care is only one component of hospitals’ broad mission.
“From homeless shelters to school vaccinations to free health screening, hospitals take medical care far beyond the hospital walls to get it where it is needed … in the community.”
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