Prime Healthcare, which operates 13 acute-care hospitals and three medical groups in Southern California, on Monday agreed to a $1.2 million settlement for a 2008 lawsuit brought by the state for balance-billing insured patients.
Under the deal, half the settlement will go to Prime's charity foundation, and six clinics will split the rest evenly. The settlement also requires Prime to audit their records for the past six years and provide refunds with interest to any patients who were billed for services their insurance did not cover, reports the San Francisco Chronicle.
The settlement did not require Prime to admit fault; a statement released by Prime said that the company "would have prevailed at trial" but settled to avoid further costs for all parties, including taxpayers.
The California Association of Health Plans, which commissioned a survey on the problem, says that more than 1.76 million HMO members in California received balance bills seeking about $528 million between 2005 and 2007, the most recent years for which data is available, according to the San Diego Union-Tribune.
"I am really pleased with the outcome," Cindy Ehnes, director of the California Department of Managed Health Care, told the Orange County Register. "It drives a stake in a very controversial business practice that Prime Healthcare has been engaging in over the last five years as it has steadily acquired hospitals."
To learn more:
- read this article in the Orange County Register
- see this Associated Press piece in the San Francisco Chronicle
- check out the article in the Sacramento Business Journal
- read the article in the San Diego Union-Tribune