Legacy Health settles improper billing suit

Legacy Health System of Portland, OR has settled a class-action lawsuit that claims the hospital system provided insufficient charity care and improperly billed uninsured patients. As part of the settlement, Legacy will retroactively discount uninsured patient bills dating back to 2001 by 25 percent. In addition, until mid-2008 the system will offer a 15-percent discount on care given to uninsured patients with an income under $100,000. The lawsuit was filed in 2004 that alleged many not-for-profit hospitals act more like for-profit facilities.

Legacy Health System's settlement is the latest in a long string of suits that have called into question the billing practices of not-for-profit hospitals. With lawsuits threatening and regulators considering sanctions, the tax-exempt status of nonprofit hospitals has become one of the most talked-about issues in healthcare this year. In mid June the IRS launched an investigation into 550 hospitals in the nonprofit sector to determine whether they were compliant with the standards required to keep their tax-exempt status. And a recent Fitch Ratings report found that the nonprofits are enjoying high profit margins.

- see the press release from Legacy Health System