Lawsuit Alleges Improper Hospital Billing Practices

A lawsuit filed Wednesday in Washington County Circuit Court contends the company that owns Northwest Medical Center and operates nine other hospitals in Arkansas has been skipping insurance carriers and going after payment directly from patients or other sources that pay more.

The lawsuit seeks class action status for any Arkansas resident who had valid health insurance and received care from any facility owned by Community Health Systems or affiliated with the company. It was filed on behalf of Jessica Mounce, who was treated at the hospital in Springdale after a 2013 car wreck. Attorneys say there could be hundreds of potential plaintiffs who received health care at the hospitals since April 30, 2010.

Shawn Daniels, a Fayetteville lawyer who is among those filing the suit, said Community Health Systems operates nine hospitals in Arkansas. The hospitals have contracts with large insurers and agree upon costs for various procedures. Part of those agreements limit the amount insurers will pay.

"What these hospitals are doing is, when they see someone come in from a car wreck, for example, they don't run it through Blue Cross and Blue Shield because they get a lower benefit payment," Daniels said. "So, instead of that $2,000 charge for the MRI when Blue Cross is only going to reimburse them $1,000, they ignore that agreement and want the full $2,000 from the carrier of the car that hit them."

Hospital officials said they haven't seen the lawsuit and had no comment on ongoing litigation.

Daniels said it's not fair to people who have health insurance because not only are they being charged higher rates but, in the meantime, nothing is getting paid and providers are starting to hound the patient for collections.

"It kind of defeats the purpose of having health insurance if you're going to ignore it if you think you can get more money from a liability carrier," Daniels said. "It's a scam quite frankly, and that's what we're bringing it for."

The hospitals sometimes seek payments directly or indirectly from the patients, according to the lawsuit. Hospitals place liens on personal property or personal injury legal claims, turn them over to collection agencies or report them to credit bureaus, hurting individual credit scores.

Hospitals are precluded by their agreements with insurance carriers from seeking payment for covered services from other sources, including the patient directly, the suit says.

The suit names Community Health Systems; CHSPSC, LLC; Northwest Arkansas Hospitals, doing business as Northwest Medical Center Professional Account Services; and, several "John Doe" defendants who have not yet been identified. It seeks actual and punitive damages.

Claims include violation of the Arkansas Deceptive Trade Practices Act; interference with a contractual or business expectancy; and, unjust enrichment. An injunction is being sought to make hospitals honor their payment agreements with insurers.

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