Lawsuit: Hospital owes patients refunds

INDIANAPOLIS (WISH) - If you've paid a hospital bill in the past dozen years, a case in the Indiana Supreme Court should interest you.

One local hospital group is being sued for charging too much money for its services. IU Health is at the center of the lawsuit. At issue is treatment of two Indianapolis area residents in 2008 and 2009, at its Carmel hospital, back when it was Clarian.

"The key question is, for people who are uninsured when they went to the hospital, are they required to pay the full list price of the hospital bills?" said David Orentlicher, a doctor and professor of law at Indiana University’s law school, which is not affiliated with IU Health.

In the lawsuit, Abby Allen, who didn't have insurance, says she was billed more than $15,000 to treat an infection. Someone with insurance, she contends would have been billed less than half, about $7,300, for the same treatment. Walter Moore, says he was billed more than $1,100 for treatment after a car accident. Moore claims someone with insurance would have been charged "significantly less." Both say the bills were eventually turned over to a collection agency, which hurt Allen and Moore's credit rating.

Orentlicher said interpretation of current state law is the issue.

"Under Indiana law, they're going to say unless you specify in advance what you are going to charge, you can only charge us a reasonable fee. It's going to be based on what you charge everybody else," he said.

The lawsuit could affect thousands of people who had treatment at a non-profit hospital before 2010 and paid full price for services. But Orentlicher said IU Heath has years of precedent behind its argument.

"The reason why we give insurers a lower rate is because they promise us volume, and you always give discounts for volume purchasers," he said.

Anyone treated from 2010 on is not affected, because the patient protection and affordable care act required non-profit hospitals to give everyone the discount.

For-profit hospitals are not involved because they have freedom to charge whatever they want.

The case was originally thrown out of court in Marion County, but an appeals court said it had merit. IU Health then asked the Supreme Court to rule.

If the court sides with the plaintiffs, the case could become a class-action lawsuit, which means you might be able to get some money back, if you were charged full price.