Date Posted: Tuesday, July 20, 2004 at 3:00 PM CST

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


THREE OF THE NATION’S LARGEST NONPROFIT HOSPITAL SYSTEMS CHARGED WITH FAILING TO PROVIDE GOVERNMENT-REQUIRED CHARITY HEALTHCARE TO UNINSURED PATIENTS

-- New York Presbyterian, Cleveland Clinic And New Orleans’ Ochsner Clinic Are Named As Defendants In Class Action Litigations --

-- Lawsuits Now Have Been Filed Against 31 Nonprofit Hospital Systems In 17 States Since June 17, 2004 --

FOR IMMEDIATE RELEASE

New York, NY, Cleveland, OH, New Orleans, LA -- (July 15, 2004) – New York Presbyterian, Cleveland Clinic Health System and New Orleans’ Ochsner Clinic Foundation hospital systems today were charged in class action lawsuits brought by uninsured patient plaintiffs. Each of the lawsuits charges the respective defendant nonprofit hospital system and hospital with victimizing the uninsured plaintiff patients by failing to fulfill their obligations to provide government required charity care in return for tax exemptions.  The lawsuits charge the defendants with requiring their uninsured patients to pay unfair and unreasonable health care prices that are far in excess of the discounted amounts accepted by these same defendants from their insured patients.

The class action lawsuits filed today by uninsured patient plaintiffs are:

• In Louisiana: Defendant: Ochsner Clinic Foundation: United States District Court for Eastern District of Louisiana; litigation filed by The Scruggs Law Firm, P.A and Oreck, Bradley, Crighton, Adams & Chase.

• In New York: Defendant: New York Presbyterian: United States District Court for Southern District of New York; litigation filed by Bernstein Liebhard Lifshitz, LLP.

• In Ohio: Defendant: Cleveland Clinic Foundation (CCF), Cleveland Clinic Health System; United States District Court for the Northern District of Ohio, Eastern Division; litigation filed by Weisman, Kennedy & Berris Co., L.P.A.

With the filings of today’s litigations, 31 uninsured patient class action lawsuits have been brought against nonprofit hospital systems and hospitals in 17 states across the country since June 17, 2004.  These defendant nonprofit hospital systems control approximately 300 hospitals in aggregate.


These three defendant “nonprofit” hospital systems are among the most “profitable” in the country. All three are leaders in performing “wallet biopsies” on many of their uninsured patients- often through their screening process placing a priority on the patient’s wallet rather than the patient’s health issue and, in turn, appropriate treatment.  New York Presbyterian, Cleveland Clinic and Ochsner Clinic are able to realize and accumulate their profits because, in direct contradiction of their government obligations, they have for years spent only a small percentage of their sizeable revenues on charity care for the uninsured while reaping enormous cash windfalls from their tax exempt status.

New York Presbyterian is the largest hospital system in the New York Metropolitan area serving 20% of the area’s patients. In 2002, the New York-Presbyterian Health Care System was comprised of approximately 33 tax-exempt acute-care and community hospitals as well as its own tax-free collection agency.  In 2002, it had net assets totaling approximately $1.358 billion among its two tax-exempt acute care hospitals, of which $603.3 million, or 44% was unrestricted.  

With 13 hospitals and two hotels, Cleveland Clinic runs itself more like a multinational corporation than a hospital. In 2002, it had revenue over $3 billion and net operating income of more than $98 million (before investment gains and losses).  Cleveland Clinic has earned these large sums despite a poor and questionable track record of investing the nonprofit hospital’s funds in equities. At the end of 2002, Cleveland Clinic had net assets of more than $1.2 billion, even after a substantial loss in its “investments” of $583 million over the previous three-year period. According to Cleveland Clinic’s financial information which is cited in the litigation, “The major items contributing to this reduction were a decline in the market value of investments of $511.6 million (and a cumulative minimum pension liability) increase of $241 million, offset by gifts, grants and bequests totaling $161.8 million.” The so-called clinic also provides its staff with inappropriate perks, such as a second mortgage guarantee program for its professional staff’s private homes.

Ochsner Clinic is the second largest healthcare provider in the New Orleans region. In 2002, Ochsner generated over $1 billion in patient revenue and had over $300 million in cash and investments.  

Defendants New York Presbyterian, Cleveland Clinic and Ochsner Clinic, according to the litigations, require their uninsured patients to pay “sticker” price, while providing significant discounts for healthcare to patients who either are privately insured or use third party payors such as Medicare and Medicaid.  As a result, New York Presbyterian, Cleveland Clinic, and Ochsner Clinic force their uninsured patients to pay out-of-pocket the full excessive healthcare costs even though these patients are those who can least afford such costs. Compounding this breach of their governmental obligations, New York Presbyterian, Cleveland Clinic, and Ochsner Clinic often employ predatory and goon-like collection methods to extract payment from the numerous uninsured patients whom they force to pay these “sticker” prices. Indeed these three defendant nonprofit hospital systems have a sordid history of pushing over the years numerous of their uninsured patients into personal bankruptcy.

Moreover, as described in the class action litigation against New York Presbyterian, that defendant’s own web site boldly states that it “provides charitable and uncompensated care to patients without means.” However, New York Presbyterian requires patients to sign a form contract promising to pay for unspecified and undocumented charges for medical care that are pre-set by New York Presbyterian at its sole discretion.  New York Presbyterian will not admit a patient into its emergency rooms for emergency medical care unless the patient agrees to pay in full for unspecified and undiscounted charges. Moreover, New York Presbyterian has an average charge-to-cost ratio of 196.83%, well over the state average of 181.33%.

The American Hospital Association (“AHA”), the industry’s trade organization, is alleged to be a non-defendant conspirator with all three defendant hospitals.  As members of the AHA the three defendants, along with the defendants charged in the previous class action lawsuits filed since June 17,  New York Presbyterian, Cleveland Clinic, and Ochsner Clinic each have benefited from the cross pollination of information supplied by the AHA  with respect to  operating, accounting and financial  techniques and practices as well as the AHA’s ongoing public relations and lobbying efforts to deflect public focus away from the wrongdoings being perpetrated by the defendants on uninsured patients  specifically and the public generally.

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 any of the complaints filed to date, please visit www.nfplitigation.com

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