ILNews

Justices grill both sides in IU Health case

Back to TopCommentsE-mailPrintBookmark and Share

The five justices on the Indiana Supreme Court asked feisty questions of both sides in the case in which two Indiana University Health patients have argued that hospital “chargemaster” rates are unreasonable.

Much of the nearly 45 minutes of arguments and questioning on May 10 involved the justices and the lawyers for both parties trying unsuccessfully to apply various scenarios from the retail world of commerce to health care pricing.

Car dealerships, landscape crews and other retailers were invoked hypothetically to try to reason through why IU Health could claim that uninsured patients Abby Allen and Walter Moore had contractually agreed to pay any and all charges it assessed them – even without naming a price or referring to a price guide.

“Where in the world can a patient know what standard is going to be applied?” acting Chief Justice Brent Dickson asked Jon Laramore, the attorney representing IU Health.

But Laramore said in the world of health care, those models don’t really apply because hospitals constantly use profitable lines of service to support unprofitable ones, such as neonatal intensive care units. Also, hospitals face unfunded federal mandates, such as the requirement to stabilize all patients – regardless of their ability to pay – before transferring them to any other medical facility.

“Providers have to think of their prices in a different way [than retailers],” Laramore told the justices. He added, “It’s a complicated process.”

Meanwhile, Jerry Garau, the attorney representing Allen and Moore, had the difficult case of arguing how his clients had not breached their contracts with IU Health by failing to pay any of their bills. Allen was billed more than $15,600; Moore was billed $1,138.

The justices pressed him on how IU Health could name a price in its contracts with Allen and Moore – both of whom came to the IU Health North emergency room in Carmel – when it could not know in advance what treatment they would require or even their insurance status.

“What would you suggest that the hospital do when somebody checks in and they’re uninsured,” asked the court’s newest justice, Mark Massa. “Are they to give them the manual of every possible, conceivable operation or procedure that might befall them?”

Garau’s answer? IU Health’s billing of Allen and Moore was invalid because their contracts failed to disclose a price, but even more so because IU Health failed to assess a reasonable price.

“There had to be something in the contract that would allow a reasonable consumer to ascertain the price,” Garau said, adding later, “If the price isn’t going to be disclosed, there is an obligation that the price be reasonable.”

Laramore countered that IU Health charged Allen and Moore standard prices, based on IU Health’s “chargemaster” price list. They just were not given the discounts the hospital system has negotiated with health insurance companies.

The trouble is that hospitals have aggressively hiked those chargemaster rates over the past decade more as a negotiating tactic with health insurers than to reflect the true costs of providing care.

Therefore, Garau argued, Allen and Moore should be given the chance to have a jury compare their bills against the typical payments for the services they received, to determine if they were indeed reasonable.

“What a hospital charges to 90 percent of its patients is certainly relevant,” Garau said.

IU Health won the first round in this 2-year-old fight when a Marion Superior judge dismissed the patients’ lawsuit. But after the state appeals court reversed that decision in October, remanding the case, IU Health appealed to the state’s highest court.

If Allen’s and Moore’s case is allowed to go to trial, it will be significant because their attorneys have promised to seek class-action status on behalf of all uninsured IU Health patients back to the year 2000. And they have their eyes on the patients of other Indiana hospitals, too.

IU Health now gives a standard 40 percent discount off its chargemaster prices to uninsured patients, but the discount was 20 percent until last year.

IU Health’s 20 hospitals around the state provide a significant amount of unpaid care each year, noted its spokeswoman Lauren Cislak. In 2011, it cared for 50,000 patients who could not or did not pay their entire bills, which resulted in unpaid costs of nearly $200 million. IU Health also provided nearly $122 million in free care to low-income patients.

IU Health’s revenue in 2011 totaled more than $4 billion.

It is unclear when the Indiana Supreme Court will make a ruling in the case.•
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. No second amendment, pro life, pro traditional marriage, reagan or trump tshirts will be sold either. And you cannot draw Mohammed even in your own notebook. And you must wear a helmet at all times while at the fair. And no lawyer jokes can be told except in the designated protest area. And next year no crucifixes, since they are uber offensive to all but Catholics. Have a nice bland day here in the Lego movie. Remember ... Everything is awesome comrades.

  2. Thank you for this post . I just bought a LG External DVD It came with Cyber pwr 2 go . It would not play on Lenovo Idea pad w/8.1 . Your recommended free VLC worked great .

  3. All these sites putting up all the crap they do making Brent Look like A Monster like he's not a good person . First off th fight actually started not because of Brent but because of one of his friends then when the fight popped off his friend ran like a coward which left Brent to fend for himself .It IS NOT a crime to defend yourself 3 of them and 1 of him . just so happened he was a better fighter. I'm Brent s wife so I know him personally and up close . He's a very caring kind loving man . He's not abusive in any way . He is a loving father and really shouldn't be where he is not for self defense . Now because of one of his stupid friends trying to show off and turning out to be nothing but a coward and leaving Brent to be jumped by 3 men not only is Brent suffering but Me his wife , his kids abd step kidshis mom and brother his family is left to live without him abd suffering in more ways then one . that man was and still is my smile ....he's the one real thing I've ever had in my life .....f@#@ You Lafayette court system . Learn to do your jobs right he maybe should have gotten that year for misdemeanor battery but that s it . not one person can stand to me and tell me if u we're in a fight facing 3 men and u just by yourself u wouldn't fight back that you wouldn't do everything u could to walk away to ur family ur kids That's what Brent is guilty of trying to defend himself against 3 men he wanted to go home tohisfamily worse then they did he just happened to be a better fighter and he got the best of th others . what would you do ? Stand there lay there and be stomped and beaten or would u give it everything u got and fight back ? I'd of done the same only I'm so smallid of probably shot or stabbed or picked up something to use as a weapon . if it was me or them I'd do everything I could to make sure I was going to live that I would make it hone to see my kids and husband . I Love You Brent Anthony Forever & Always .....Soul 1 baby

  4. Good points, although this man did have a dog in the legal fight as that it was his mother on trial ... and he a dependent. As for parking spaces, handicap spots for pregnant women sure makes sense to me ... er, I mean pregnant men or women. (Please, I meant to include pregnant men the first time, not Room 101 again, please not Room 101 again. I love BB)

  5. I have no doubt that the ADA and related laws provide that many disabilities must be addressed. The question, however, is "by whom?" Many people get dealt bad cards by life. Some are deaf. Some are blind. Some are crippled. Why is it the business of the state to "collectivize" these problems and to force those who are NOT so afflicted to pay for those who are? The fact that this litigant was a mere spectator and not a party is chilling. What happens when somebody who speaks only East Bazurkistanish wants a translator so that he can "understand" the proceedings in a case in which he has NO interest? Do I and all other taxpayers have to cough up? It would seem so. ADA should be amended to provide a simple rule: "Your handicap, YOUR problem". This would apply particularly to handicapped parking spaces, where it seems that if the "handicap" is an ingrown toenail, the government comes rushing in to assist the poor downtrodden victim. I would grant wounded vets (IED victims come to mind in particular) a pass on this.. but others? Nope.

ADVERTISEMENT