Tuesday, June 21, 2005

Hospital suit over ER costs is tossed

5 uninsured Beaumont patients who claimed they had been overcharged did not prove any violations.

By Jeff Plungis / Detroit News Washington Bureau

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WASHINGTON -- A federal court in Detroit on Monday dismissed a lawsuit charging that William Beaumont Hospitals shirked its duty to provide emergency care at a reasonable price for uninsured patients.

The dismissal came as Beaumont faces a high-profile federal probe into its charity status.

Monday's ruling concerned a class-action lawsuit brought by five patients who said they had been overcharged after emergency room visits to Beaumont, which operates hospitals in Royal Oak and Troy.

U.S. District Judge Avern Cohn of the Eastern District of Michigan said the plaintiffs were participating in a "nationwide attack on charity care."

Cohn said the patients had not proved any violation of federal or state law. Also, each patient had signed a consent form promising to pay for their care. And the complaint "recites no facts leading to the conclusion that Beaumont charged 'excessive and inflated rates,' " Cohn said.

Beaumont is one of 10 hospitals at the center of a federal inquiry into whether nonprofit hospitals are doing enough community service to qualify for tax-exempt status.

The U.S. Senate Finance Committee sent a letter May 25 to the hospitals, asking for details about their charitable activities, patient billing and ventures with for-profit companies. Written responses are due by July 11.

Sen. Charles Grassley, R-Iowa, chairman of the Finance Committee, said in a statement that he was concerned about some charities abusing their tax-exempt status.

The committee is also looking at other potential abuses. Last year, it tightened rules about donating a car to charity. The panel has also looked at excessive executive compensation at nonprofits and questionable tax breaks for land conservation, spokeswoman Jill Gerber said

Besides Beaumont, the Finance Committee is looking at hospitals in Ohio, New York, Illinois, Georgia, Mississippi, California, Minnesota and Arizona.Beaumont spokeswoman Colette Stimmel said the hospital is preparing its response to the committee.

She said the hospital was most likely included in the inquiry because it is the country's second-leading provider of care for Medicare patients.

Stimmel said that in 2003, the latest year that information is available, the hospital spent $95 million on community services, including $67 million in unreimbursed care for Medicare and Medicaid patients; $20 million for charity or unpaid care; $13 million on community programs; and $500,000 on sponsorships or donations.

You can reach Jeff Plungis at (202) 906-8204 or jplungis@ detnews.com.