PHOENIX - A state appellate court on Tuesday ruled in a case with bottom-line impact for health-care consumers, deciding that all hospital patients aren't entitled to discounts given to many group insurance plans.
A dissenting Court of Appeals judge said the ruling ignores that some standard rates charged by hospitals could be "unconscionable."
Seven patients and their insurance company, Medical Savings Insurance Co., had appealed a Maricopa County Superior Court judge's ruling in favor of Phoenix-based Banner Health, a major Arizona hospital company.
Banner had rebuffed partial payments offered by Medical Savings on behalf of the patients as reasonable amounts for the care provided. Banner then sued to recover after the patients refused to pay Banner's full bills for their care.
All the patients or family members had signed admission papers agreeing to pay their hospital bills. Some of those agreements specifically referred to rates which Banner had filed with state regulators.
While Banner argued that it appropriately billed the patients, Medical Insurance contended that it and the patients were responsible only for reasonable charges.
Banner charged the patient 400 percent of its costs, sought full payment from only 2 percent of its customers and usually received 34 percent of its billed charges from patients who received similar care, Medical Insurance argued.
However, the majority of a three-judge panel noted that Banner had no agreement with Medical Insurance to provide rate discounts to its insured and that the patients' promises to pay were the only agreements between Banner and the patients regarding Banner's charges.
Hospitals are free to accept reduced payments to satisfy a bill but an unwillingness to do so for all patients isn't illegal or make the hospital's full rates unreasonable, Judge John C. Gemmill wrote for the panel's majority.
Judge Donn Kessler dissented from part of the ruling, saying the case should have included an evaluation of whether the full rates Banner filed with the state amounted to "unconscionable contract terms."
Banner's 576 pages of "single-space impenetrable filed rates" effectively make it impossible for consumers to price-shop in advance for their hospital care, Kessler said.
Judge Patricia A. Orozco joined Gemmill in the majority.
(http://www.azcentral.com)
A dissenting Court of Appeals judge said the ruling ignores that some standard rates charged by hospitals could be "unconscionable."
Seven patients and their insurance company, Medical Savings Insurance Co., had appealed a Maricopa County Superior Court judge's ruling in favor of Phoenix-based Banner Health, a major Arizona hospital company.
The case revolved around the widespread practice in the American health-care industry for hospitals and other providers to give sharp price discounts to group plans that agree to steer patients to those providers.
Banner had rebuffed partial payments offered by Medical Savings on behalf of the patients as reasonable amounts for the care provided. Banner then sued to recover after the patients refused to pay Banner's full bills for their care.
All the patients or family members had signed admission papers agreeing to pay their hospital bills. Some of those agreements specifically referred to rates which Banner had filed with state regulators.
While Banner argued that it appropriately billed the patients, Medical Insurance contended that it and the patients were responsible only for reasonable charges.
Banner charged the patient 400 percent of its costs, sought full payment from only 2 percent of its customers and usually received 34 percent of its billed charges from patients who received similar care, Medical Insurance argued.
However, the majority of a three-judge panel noted that Banner had no agreement with Medical Insurance to provide rate discounts to its insured and that the patients' promises to pay were the only agreements between Banner and the patients regarding Banner's charges.
Hospitals are free to accept reduced payments to satisfy a bill but an unwillingness to do so for all patients isn't illegal or make the hospital's full rates unreasonable, Judge John C. Gemmill wrote for the panel's majority.
Judge Donn Kessler dissented from part of the ruling, saying the case should have included an evaluation of whether the full rates Banner filed with the state amounted to "unconscionable contract terms."
Banner's 576 pages of "single-space impenetrable filed rates" effectively make it impossible for consumers to price-shop in advance for their hospital care, Kessler said.
Judge Patricia A. Orozco joined Gemmill in the majority.
(http://www.azcentral.com)
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