Indiana’s Largest Hospital Group Sued for Overcharging Uninsured Patients

A lawsuit has been filed accusing IU Health of over-billing uninsured patients more for treatment than insured patients. This case has drawn a lot of attention. The matter was argued recently before the Indiana Supreme Court.

The case involves a 2010 lawsuit filed by two uninsured patients. The patients accused IU Health of over-billing them.

Although the original lawsuit for the over-billing was small, the consequences are enormous. Should the Indiana Supreme Court rule favorably, it would allow other patients to sue for hospital over-billings as far back as ten years. If the plaintiffs win the appeal, the case against IU Health could be converted to a class action.

Other Indiana hospitals could be exposed to similar lawsuits seeking damage claims in the billions of dollars.

The Indiana Hospital Association filed a friend-of-the-court brief in support of IU Health’s position. That brief calls the case “a pretty concerning situation” for hospitals. Indiana’s Supreme Court will deal with a case of first impression in that it would be the first time it has dealt with the law of the hospital charging uninsured patients more than patients who are insured.

There is a new federal law that requires hospitals to give discounts to uninsured patients similar to those given to insured ones. That new law led IU Health to offer uninsured patients a 40 percent discount. A spokesman for IU Health said the discount applies to uninsured patients regardless of income and is based on the best rates it charges its commercially insured customers or Medicare.
One of the plaintiffs in the case was a college student. She was billed $15,641.64 to treat an infection in 2008. The lawsuit claims that an insured patient with the same treatment would have been charged only $7,308.78.

The other plaintiff in the case was a Carmel, Ind., police trainee who was charged $1,138 in 2009 for injuries he suffered in a car crash. He was uninsured and claims that the hospital would have been happy to receive less in payments had he been insured.

The hospital submitted the outstanding bills for both of these patients to a collection agency, which damaged their credit ratings. The lawsuit was filed in Marion County Superior Court. The trial judge dismissed the case siding with IU Health, but the state Court of Appeals reversed that finding. IU appealed that decision bringing it to the Indiana Supreme Court. The decision from Indiana’s highest court should focus a lot of attention on the way hospitals bill uninsured individuals.

Kreisman Law Offices has been handling medical negligence cases for individuals and families for more than 36 years in and around Chicago, Cook County and its surrounding areas, including Chicago (Logan Square), Chicago (Humboldt Park), Elmwood Park, River Forest, Hillside, Oakbrook Terrace, Chicago Ridge, Evergreen Park, Harvey and Chicago (Pullman), Illinois.