Saturday, June 19, 2004

Suits challenge charity care

Claim: Catholic Healthcare Partners inflated costs

By Matt Leingang
The Cincinnati Enquirer

Hospitals within a Cincinnati-based health system have been accused of inflating how much charity care they provided and of using strong-arm tactics to collect money from uninsured patients.

The accusations were made Thursday in federal class-action suits filed in eight states. Named as a defendant is Catholic Healthcare Partners, a not-for-profit system that includes 29 hospitals, 14 nursing homes and other services in Ohio, Indiana, Kentucky, Tennessee and Pennsylvania.

Locally members include the five Mercy Health Partners hospitals in Mount Airy, Western Hills, Anderson, Clermont and Fairfield, and St. Elizabeth hospitals in Covington, Edgewood and Williamstown.

The suits were filed by Richard Scruggs, a Mississippi attorney who earned millions of dollars and a national reputation in legal challenges of the tobacco and asbestos industries. Scruggs declined to provide any details, saying each hospital was different. The suits claim the hospitals used bogus accounting, reporting the costs of caring for uninsured patients at the so-called sticker prices instead of at the actual cost or at the reduced costs often negotiated by insurance companies.

The bookkeeping techniques, Scruggs said, "grossly distort the small amount of charity care they provide to uninsured patients" in exchange for tax exemptions.

Scruggs also said patients who couldn't pay their bills were harassed "through, among other tactics, aggressive collection efforts such as garnishment of wages and bank accounts, seizures of homes, and personal bankruptcies."

Greg Smith, a spokesman with Catholic Healthcare Partners, said the organization's policy is not to comment on pending litigation.

"We care for everybody, regardless of ability to pay," Smith said.

"Meeting the needs of people who have limited resources has been at the heart of our mission since it was founded 100 years ago. It's what we are all about."

For people who can't afford their hospital care, the network provides free or discounted care based on a patient's income level, Smith said.

In 2003, Catholic Healthcare Partners provided $227 million worth of charity care and other community benefits, such as health fairs and educational programs, Smith said.

Last week, the St. Elizabeth hospitals announced it is pulling out of the Catholic Healthcare Partners by the end of the year. But Smith said the two developments are unrelated.

The Associated Press contributed. E-mail

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