Resurrection settles multimillion-dollar lawsuit

  • By Claire Bushey
  • Staff Writer
  • January 14, 2009 @ 9:00 AM

The second largest hospital chain in Chicago settled a multimillion-dollar class-action lawsuit yesterday which alleged the company overcharged uninsured patients for years.


“They were paying a lot more than the people who have insurance,” says Steven Skalet, the lead attorney on the case. “It just seemed wrong to us.”


The lawsuit, filed in 2004, covers about 220,000 people who received care between 2001 and 2008 at eight of Resurrection Health Care’s Chicagoland hospitals. They are eligible for health care vouchers as compensation. The refunds are capped at $3 million, not including legal fees.


Resurrection also has agreed to offer discounts to all uninsured patients in the future, in accordance with a law the Illinois Legislature passed in the fall. The discounts are likely worth “tens of millions,” Skalet says.


Resurrection Health Care continues to dispute the accusation of overcharging, saying it settled the case to reaffirm its longstanding commitment to helping low-income patients and to end the controversy.


“This is no finding that we did anything wrong,” says spokesman Brian Crawford. “It’s a way to put it behind us and reaffirm our commitment to (financial assistance).”


When a hospital admits patients, they sign a form agreeing to pay “ordinary and customary” rates for services. But patients who have health insurance routinely pay less than “sticker price” for their medication and health care services because their insurance companies negotiate discounts. Uninsured patients are stuck paying “sticker price” when it is not, in fact, the norm.


The Resurrection lawsuit asserted the hospitals had defrauded uninsured patients because, unlike what the forms said, they weren’t paying “ordinary and customary” rates.


Patients in other states have sued nonprofit hospitals for failing to provide them with free health care, which, in order to remain tax-exempt, they must render to a certain number of patients. So far the courts have dismissed those cases.


Approximately 2,000 claims have been filed as of Jan. 2, but Skalet says he expects more to come in before Feb. 16, the deadline to file a claim in the lawsuit.

Staff Writer Claire Bushey can be reached at 773-362-5002, ext. 14.