A New Age for the Medically Uninsured

by Carol Harvey on January 29, 2007

We are all aware of runaway medical costs. Health care is far too expensive for the average American to pay. If you can’t afford health insurance, it’s no surprise.

And, you are far from alone. Vast numbers of students, part time workers, independent entrepreneurs, breadwinners with or without children working one, two or three minimum wage jobs just to get by skate along day to day hoping they won’t get sick. But they do.

So, let’s start with the good news. As of mid-March 2007, if you present without medical insurance at any Sutter or Catholic Health Care West Hospital like San Francisco’s St. Mary’s or St. Francis, or 40 other CHW facilities in California, Arizona, and Nevada, you will no longer be subject to price-gouging as you may have been in the past.

Suppose you or a family member suffers a sudden illness or accident requiring hospital care.

If you are a uninsured family of four whose income exceeds $100,000 a year, instead of bankrupting yourself to meet exorbitant Chargemaster prices, you will now pay the same costs as people covered by commercial or government insurance, like Medicare.

If you are low or middle income with a family of four, and according to Federal poverty level guidelines, you make less than $100,000 a year, CHW and Sutter hospitals must now offer you free care or care at cost. What’s more, CHW will provide interest-free loans and extended payment plans.

“It’s a new age,” said Kelly M. Dermody, Plaintiff’s Counsel with Caryn Becker of San Francisco’s Embarcadero law firm Lieff, Cabraser, Heimann & Bernstein, LLP. “The price-gouging issue is done!”

Dermody and Becker carried forward years of painstaking research from July 2004 to January 2007, combined with assertive action by two lead plaintiffs, Adrienne Dancer and Amber T. Howell and “in collaboration with the terrific people in SEIU, and people at nonprofit organizations like Health Access California that do amazing not-for-profit work on behalf of Californians without insurance.” Joining forces, they called to account Catholic Health Care West Hospitals for price-gouging tactics. This considerable effort culminated in Judge Richard A. Kramer’s settlement approval of a class action suit in San Francisco Superior Court on Thursday, January 11, 2007.

The case filed on behalf of the Dancer Class plaintiffs alleged that Catholic Health Care West charged unreasonable and excessive rates to uninsured patients, much higher than prices charged patients with commercial insurance or on government programs. Sutter Hospitals faced a similar suit.

The settlement, which resolves these claims, spans July 2001 to September 2006, making all class members eligible to complete forms deducting 35% from overcharges or giving them a refund for exorbitant costs levied during this period.

If all 780,000 patients receiving claim forms participated, this class could collect or receive a vast bill adjustment of $423,000,000 (million) dollars.

Caryn Becker described the landmark rules laid down in the settlement. “Subject to any appeals, about 60 days after the Notice of Order went out — say, mid-March (2007)” —- patients will walk into CHW hospitals and see notices posted in reception areas describing the new policies, “although some hospitals may have already posted the notices or may post the notices early.”

What Kelly M. Dermody termed “more robust communications at every point of contact with uninsureds to remind them of the policies,” will include brochures or pamphlets providing new information about fair billing and charity care which will also be printed on billing statements.

“Collection agencies,” Dermody assured me, (will be) “automatically required to comply with all the charity guidelines,” and to know that “charity-eligible” people will not be pursued in collections. “It’s the best policy I am aware of on charity care anywhere in the country.”

Dermody praised the two corporate giants for setting a national standard. “What has been happening in the last six months with CHW and Sutter in California is very unique. They have, to their credit, really stepped out to become leaders for other hospitals around the country.”

I asked Caryn Becker how price-gouging works.

“With hospitals,” she said, “It’s easy. Pretty much all hospitals do the same thing. They have these ‘Chargemasters,’ which are the ‘sticker prices’ they list for hospital charges. Insurance companies get discounts, and Medicare decides what it’s going to pay. So it’s really only the uninsureds who pay “full prices” which are drastically higher than what anyone else pays.”

(She said a recent California Law mandated that hospitals must give their Chargemasters to any patient requesting a copy.)

Becker concluded, “It’s an issue of how (hospitals) charge uninsured patients generally.”

Dermody gave “a great deal of credit” to uninsured patients driven purely by desperation, who, without organization among them or contact between them, independently realized this was a problem. “They didn’t want to take it anymore. They were very upset about the financial crisis they were put in by their medical crisis, and they stepped forward, brought these claims in the legal system, and got justice.”

Uninsured lead plaintiff, Adrienne Dancer, 28, commuted from the Los Feliz area of Los Angeles to her waitress job in Pasadena. When she broke her foot, she presented to the Glendale Memorial Hospital, halfway between. What she later learned was an E.R. looked more a walk-in clinic than an emergency facility.

During a three-hour visit , she was seen 15 minutes by a diagnosing nurse, and 15 minutes by a nurse who confirmed the break from x-ray, applied an ice pack and a splint with a bandage (not a cast), gave her a Vicodin, and sent Adrienne on her way.

The only doctor she saw walked by nodding, “Hi.” On leaving this “E.R,” she was required to pay an $100 deposit.

She was discouraged from returning for follow-up by an attitude that implied, “We saw you once initially. Please don’t come back.”

They directed her to the Downtown L.A. County Hospital. This facility, whose facade is used for the soap opera General Hospital, appeared to have escaped renovation “for 30 to 40 years.” The E.R. was a big “room filled with hundreds of people.” During her three-hour wait, five to six patients were seen. She finally left.

Without follow-up, her foot “didn’t heal in the right place.” Today, a bone protrudes half an inch leaving a “bump.” She can still wear shoes and walk, but her “feet are different.” Restoring the foot to normal would require breaking and resetting, but such surgery “is not appealing.”

Expecting to be charged $200 to $300, an $800 – $900. bill arrived in the mail. Her roommate observed Adrienne “almost pass out on the lawn.”

Intelligent and assertive, Adrienne requested a detailed invoice, which took Glendale Memorial a month to provide. Included in the breakdown of hospital charges was $25 for one Vicodin tablet. Over-the-counter, an entire bottle cost $15.

Her Internet research into California legislation and activity in other states went nowhere. She finally found and e-mailed Lieff, Cabraser, Heimann & Bernstein, then involved in the Sutter case.

An accessible, welcoming Attorney, Nirej Sekhon, who now teaches legal writing at Stanford, responded. Dermody, Sekhon’s supervisor, instructed him to follow up with Ms Dancer. Lead attorneys Dermody and Becker carried the case forward to its successful conclusion.

From its extensive work with hospitals, the law firm was aware of many “uninsureds” suffering price-gouging. After a year, Adrienne Dancer and Amber T. Howell from Grass Valley came forward to file in this case and were named lead plaintiffs representing others in the Class. Amber Howell has since moved East and could not be reached for comment.

Though Adrienne found a better job with benefits, she did not turn her back on the suit. “I wanted to fix the problem for other people. In cities like Los Angeles and San Francisco, there are many artists, actors, and part-time workers gambling on continued good health with no insurance.” She observed, “When part-time employees are the most vulnerable,.it’s a slap in the face that hospitals are gouging them.”

In winter 2006, I, myself, became a member of the Class.

Three years previously, I transcribed medical dictation at home without insurance. Blind sided by sudden osteoarthritis and osteoporosis, thinning cartilage and a bone spur in my knee restricted transcription foot pedal use affecting my ability to work.

Additionally, I resided in a small Pacific Heights Victorian. When tenants smoked, I suffered severe respiratory difficulties. My father died of lung cancer. Second hand smoke posed a serious risk.

A friend suggested I try the Sister Mary Filippa Clinic at Catholic Health Care West’s St, Mary’s Hospital in San Francisco, known for providing free care to low-income patients. The intake coordinator verified my financial status. The social worker told me the no-cost medical care included free medications and clinic and emergency room visits.

Between 2003 and 2004, I visited the ER three times and the Filippa clinic twice. In all ER visits, the intake nurse banded my wrist for admission but left me sitting for hours without seeing a physician.

In the clinic, I asked the female Resident for a letter detailing to building management my risk from spin-off smoke. “Move out of the building,” she ordered.

I said, politely but firmly, maybe it was hard for a doctor to understand the impossibility of a self-employed worker leaving a rent-controlled San Francisco apartment. She summarily dismissed me, refusing to write the letter.

To my shock, I received an $850 bill. Though I called the accounting office explaining my “charity care” status at the Mary Filippa Clinic, the hospital continued to mail followup bills interspersed with two years of dunning letters and phone calls. All this caused me great personal stress.

After one year, I returned the agent’s calls, stating I had been set up for fraudulent free medical care. I assured her that this relentless collection stalking would garner her nothing but wasted time since I would never pay. “Thank you,” she said, surprised but apparently grateful. I never heard from her again. All dunning letters ceased.

In winter 2006, along with 700,000 CHW overcharged “uninsureds,” I received the court-approved class notice from the claims adminstrator declaring that, as a Class member, I was eligible for a refund of 35% of my bill.

Since St. Mary’s ceased its dunning barrage on its own, I was due no refund. However, describing my experience on the record at the January 11, 2007 Superior Court hearing before Judge Kramer considerably eased my pain, suffering and sense of isolation

There I spoke with organized, articulate Kelly Dermody. I said I was personally grateful that the suit provided real validation. I was not alone.

She said, “I think a lot of uninsured people weren’t aware of how bad this was and that they weren’t the only one having this problem.” The firm received “hundreds” of calls for information about claim forms or just to say thanks.

“The media is not known for being that interested in poverty,” she stated, “But it has been very interested in health care as it affects poor people, and it has gotten the word out more, especially in the last year or two.”

In January 2007, every legislator had a health care plan. Each at his own governmental level, George Bush, Arnold Schwarzenegger, Gavin Newsom, and Tom Ammiano proposed and quibbled. None of their plans have come to fruition.

When hospitals overcharged them, Adrienne Dancer and Amber Howell took the initiative and did something about it. They proved once again that the most successful and permanent changes are accomplished from the grass roots by everyday people.

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