Hospital Chain Settles Over Rates For Uninsured Patients

The agreement assumes that reasonable payment rates, or "gross charge thresholds," ranged from 67% of gross charges in 2001 and 2002 up to 82% of the gross charges in 1999.

Tenet will reimburse uninsured patients for any payments made over the gross charge thresholds.

The settlement agreement gives as an example a patient who received a bill from a Tenet hospital for $2,000 in 2000, when the gross charge threshold was 75%. If the patient paid $1,800, or 90% of the gross charges, then Tenet will send that patient $300 to compensate for the difference between the $1,800 actual payment and the $1,500 threshold charge, according to the settlement agreement.

The settlement agreement does not say how much the plaintiffs and Tenet expect Tenet to pay in refunds, but Mortimer has predicted that 50,000 patients will file settlement claim forms.

Tenet says in a quarterly report filed with the U.S. Securities and Exchange Commission in May that it had accrued $30 million by March 31 as a "minimum liability" to cover the cost of resolving the uninsured payment litigation.

In the second quarter, 9.5% of Tenet patients treated in outpatient settings and 3.8% of the patients admitted to Tenet hospitals were uninsured, Tenet reports.

In theory, successful legal battles to make health care providers offer almost all patients managed care discounts could help health insurers with small, weak provider networks or no provider networks compete with managed care giants with the clout to negotiate deep discounts.

America's Health Insurance Plans, Washington, represents U.S. health carriers of all sizes.

"Our members negotiate in good faith with all providers to create contracts that provide the best possible value for consumers," says AHIP spokesman Mohit Ghose.