A proposed class of uninsured patients claimed that a large hospital system had overcharged them for emergency room visits.
Patients of a large hospital system in California joined in a class action alleging that the hospital system had charged uninsured emergency room patients rates in excess of the reasonable value of the services provided. Defense counsel retained Laurence Baker of Stanford University and Cornerstone Research to respond to a motion to certify the class.
According to the plaintiffs, charges for uninsured patients should have been based on the cost of delivering care or on the rates that would have been charged to various insured populations. The plaintiffs claimed that the hospital system had charged uninsured patients rates well in excess of any reasonable benchmark.
Professor Baker submitted a declaration for the defendant, showing that individualized inquiry would be needed to determine which patients were part of the proposed class, as it would require individualized inquiry to determine a “reasonable” charge for each uninsured patient’s care. He further showed that any proposed class-wide method for determining “reasonable” charges would create conflict among potential class members.
Professor Baker determined that:
Professor Baker also showed that even if a benchmark reasonable charge could be selected and estimated, each patient would still require individualized inquiry to determine if that patient was overcharged. Some uninsured patients qualified for financial assistance programs or discounts from the hospital that ultimately reduced their charges below rates paid by insured patients. As a result, the class defined by plaintiffs almost surely included patients who were not charged more than a plausible “reasonable” value.