Not-for-Profit Hospitals in Class-Action Cross-Hairs

Approximately 18 lawsuits were filed within the past week in eleven different states around the country challenging billing practices of not-for-profit hospitals. We are aware of three such lawsuits filed in the United States District Court for the Northern District of Illinois in Chicago. These three claims are styled as class actions and are brought by the Chicago firm of Clifford Law Offices P.C., and the Scruggs Law Firm, P.A. of Oxford, Mississippi. The Chicago complaints allege that the hospitals have engaged in patterns and practices of charging inordinate, unreasonable and inflated prices for medical care to the hospitals' uninsured patients, and have used aggressive collection techniques against these patients. In addition, the plaintiffs use these claims as a basis to attack the hospitals’ tax exempt status. The plaintiff lawyers promise more lawsuits against hospitals will be filed. This litigation trend comes as Congress began hearings to examine the billing practices of nonprofit hospitals and their tax exemptions.