Date Posted: Wednesday, June 30, 2004 at 12:30 PM CST

Contact:  Richard Scruggs
         The Scruggs Law Firm, P.A.
         (662) 281-1212

Contact:  Kelly M. Dermody
 Lieff Cabraser Heimann & Bernstein,  
         LLP
 (415) 956-1000


SUTTER HEALTH, ONE OF THE LARGEST NONPROFIT HEALTHCARE SYSTEMS IN THE COUNTRY, CHARGED IN CLASS ACTION LAWSUIT WITH BREACHING ITS OBLIGATION TO PROVIDE GOVERNMENT REQUIRED CHARITABLE MEDICAL CARE TO ITS UNINSURED PATIENTS

FOR IMMEDIATE RELEASE

San Francisco, California and Oxford, Mississippi -- (June 30, 2004) -- Sutter Health (“Sutter”) today has been charged in a class action lawsuit brought by uninsured patient plaintiffs with breaching its obligations to provide charitable healthcare to uninsured patients in return for substantial tax exemptions.   The complaint alleges that Sutter charges uninsured patients unfair and unreasonable prices that are far in excess of those charged to its insured patients. The class action litigation against Sutter was filed in federal court in San Francisco, California.  Sutter, a major California nonprofit healthcare system headquartered in Sacramento, has over 20 nonprofit hospitals that comprise its system.  

As set forth in the complaint, plaintiff alleges that Sutter spent only 0.6% of its 2002 revenues on charity care –40% less than the California statewide average for private hospital companies.  In 2003, Sutter reported total patient service revenues of $4.506 billion, and profits of $465 million.

The uninsured patient class action lawsuit commencing in California against Sutter means that nineteen uninsured patient class action lawsuits have been filed since June 17 against nonprofit hospital systems and nonprofit hospitals in twelve states.

The class action lawsuit brought against defendant Sutter alleges, among other things:

“While Sutter gives private insurance companies and governmental third party payors like Medicare and Medicaid significant discounts from the gross or “sticker” price listed in the Chargemasters, it charges its uninsured patients 100% of the full sticker price.  Upon information and belief, the only patients who are required by Sutter to pay the full, excessive Chargemaster rates are the uninsured."

“In April and May of 2004, Health Access California – a statewide 501(c)(3) non-profit organization founded in 1987 and dedicated to achieving quality, affordable health care for all Californians – and SEIU 250 – the Health Care Workers Union – issued two related reports regarding Sutter’s pricing practices.  The reports, entitled, Your Money or Your Health:  Discriminatory Pricing and Aggressive Debt Collection Practices by Sutter Healthcare (April 2004) and Your Money or Your Health:  Discriminatory Pricing and Aggressive Debt Collection Practices by Sutter Health in San Francisco (May 2004) (together, hereinafter “Discriminatory Pricing Reports”), describe how uninsured patients at Sutter’s California Pacific Medical Center were charged prices that were 300% higher than those charged to insured patients, and how uninsured patients at Sutter Roseville Medical Center were charged prices that were 150% higher than those charged to insured patients."

“The “sticker” prices charged to the uninsured are unreasonable and excessive.  According to the Discriminatory Pricing Reports, Sutter hospitals charged the uninsured four times the cost of providing such services.  The same reports reveal that Sutter’s “sticker” prices are, on average, higher than non-Sutter hospitals, by as much as 80%.  Accordingly, not only are the uninsured being charged more than the insured at Sutter hospitals, they are also being charged more than the average charged to uninsured at non-Sutter hospitals."

“Additionally, Sutter regularly sends substantial numbers of patients to collection when they are unable to pay.  As Sutter admits on its website, it has “standardized collection practices.”  (www.sutterhealth.com/about ab_ethics.html).  Other than a prohibition on wage garnishments, bench warrants and property foreclosures, all other collection tactics are fair game to Sutter.  (Id.)  As such, Sutter and/or Sutter affiliates or subsidiaries working on Sutter’s behalf, have used and continue to use coercive, unfair and fraudulent collection methods, including the institution of lawsuits, to collect the improper sums charged, and have made negative credit reports about patients who fail to pay the exorbitant charges.  According to the Discriminatory Pricing Reports, in 2003, Sutter sued nearly 300 patients for collection in Sacramento, and since 2002, Sutter has sued 134 patients in San Francisco.”

More class action lawsuits by uninsured plaintiffs are expected to be filed against nonprofit hospitals systems and nonprofit hospitals which have failed to meet their obligations to provide charitable healthcare to their uninsured patients.

To learn more about that the class action lawsuits by uninsured patients against nonprofit hospital systems and nonprofit hospitals, or to obtain a copy of the complaint filed today against Sutter, please visit www.nfplitigation.com

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