Court upholds lawsuit dismissal

| Friday, April 06, 2007

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The Associated Press

PIERRE — The South Dakota Supreme Court has upheld the dismissal of class-action lawsuits that alleged the state’s three largest hospital systems charge unreasonable prices to patients who are not covered by health insurance or government programs.

The three lawsuits were dismissed earlier by circuit judges who ruled that the patients had no legal grounds to pursue their claims. The high court, in a unanimous vote, refused to reinstate the lawsuits.

The uninsured patients had sought damages because they were charged prices that exceeded those for patients who had insurance or were covered by Medicare or Medicaid, but the Supreme Court said the patients signed agreements to pay unspecified, undiscounted charges that had already been set by the hospitals.

Because the prices were fixed and could be determined, courts cannot calculate different prices, the high court said.

Sherry Nygaard sued Sioux Valley Hospitals and Health System over charges she felt were excessive for intestinal surgery at Sioux Valley’s hospital in Vermillion. Court records do not indicate how much she was charged, what she paid or how much she owed.

Robert Dosch sued Avera Health after treatment of a broken hip at Avera St. Luke’s Hospital in Aberdeen. He was charged more than $30,000 and paid $200 a month, but interest and fees offset his monthly payment, according to court documents.

Brett and Debra Burgher sued Rapid City Regional Hospital for charges covering his broken arm, her cancer treatment and their son’s shoulder injury. The total bill exceeded $100,000 and they were unable to make payments.

Dosch and the Burghers discharged their hospital bills in bankruptcy court, according to the Supreme Court.

The patients argued that the hospitals breached an implied contract by charging more than an implied reasonable rate and violated a state law on deceptive trade practices.

The hospitals charge uninsured patients two or three times more than other patients, a lawyer for the patients told the high court in arguments last year.

But lawyers for the hospital systems said the hospitals have done nothing wrong, and there is no law requiring that uninsured patients get discounted rates. Insurance companies negotiate rates and government programs set prices for Medicare and Medicaid patients, they said.

The hospitals said their rates were available in their business offices.

The Supreme Court said agreements the patients signed when admitted to the hospitals made it clear that they agreed to pay unspecified, undiscounted prices that were preset by the hospitals.

Because the prices were fixed and could be determined, courts cannot compute different prices, the high court said.

The Supreme Court also rejected the patients’ claims on deceptive trade practices, ruling that the hospitals had no duty to give uninsured patients the same discounts given to those with insurance or coverage under government programs.

A new law that took effect last year makes it easier for people to find out the prices that hospitals charge.

The law requires hospitals to disclose prices for 25 of their most common inpatient procedures, and the South Dakota Association of Healthcare Organizations now coordinates the price postings to the state’s Web site.