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Press Release: San Diego County Superior Court Permits Claims Against Scripps Health for Overcharging Tens of Thousands of Uninsured Patients to Advance as a Class Action

San Francisco, California -- (June 28, 2007) Kelly M. Dermody of Lieff Cabraser Heimann & Bernstein, LLP, announced that San Diego County Superior Court Judge Steven Denton yesterday entered an order granting class certification to claims by Phillip Franklin that Scripps Health charges its uninsured patients unreasonable and unconscionable prices. This Order means that the case will continue on behalf of potentially one hundred thousand uninsured patients, most living in the San Diego and Southern California region, who challenge alleged price gouging by Scripps hospitals since 2002.

Phillip Franklin, Cross-Complainant, and Court-appointed Class Representative said, “After Scripps overcharged me, I attempted to work it out with Scripps informally. I only got the run-around. Then Scripps sued me in collections for the full price of the bill. Knowing what I went through, I realized that Scripps must be doing the same thing to other uninsured patients, and I wanted to do something about it. I am delighted that the Court is allowing me to pursue these claims on behalf of other uninsured patients at Scripps. I am not trying to get a free ride for uninsureds here. I’m just trying to seek fairness in pricing across the board so that I and other uninsured patients don’t get charged so much more than Scripps charges its other patients with insurance for the very same treatment.”

“We are pleased that the Court recognized that Scripps has engaged in systemic pricing practices toward the uninsured which are suitable for systemic review. California law prohibits companies, like Scripps, from price gouging, and we intend to prove at trial that Scripps' pricing practices toward these financially vulnerable uninsureds were unreasonable, unconscionable, and violated California law,” said Ms. Dermody.

Background on the Scripps Case

This class action originated on July 19, 2006, when uninsured patient, Phillip Franklin filed a class action cross-complaint against Scripps Health, a self-proclaimed not-for-profit hospital system based in San Diego, after Scripps sued Mr. Franklin through a collection agency. Mr. Franklin was uninsured at the time of treatment. Mr. Franklin alleged that he, like all other uninsured patients at Scripps, was charged unreasonable, unconscionable and excessive rates for his treatment. Mr. Franklin asked the Court to grant the case class action status, allowing him to represent a class of uninsured patients at Scripps’ hospitals who were also overcharged for treatment.

Mr. Franklin put forward evidence that Scripps has routinely overcharged uninsured patients back to 2002. For example, Mr. Franklin's expert, healthcare economist Robb Cohen, testified that in 2004 Scripps charged its uninsured patients, on average, more than four times what Medicare paid for the same treatment at Scripps. Scripps also charged, on average, more than what approximately 90% of other hospitals nationwide charged for treatments. In 2004, Scripps charged prices to uninsureds that were, on average, also 330% higher than Scripps’ own costs for providing the treatment.

Throughout the period 2002-2005, Scripps similarly applied high and unreasonable mark-ups over its costs to uninsured patients. By contrast, Scripps charged its other patients with private or government insurance only a fraction of its charges to uninsureds, offering average automatic discounts to those other patients of between 55% to 80% off billed charges. This means that Scripps charged uninsured patients, on average, between 2-5 times more than it charged other patients for the very same treatment. Uninsured patients account for less than 10% of all of the patients seen at Scripps’ hospitals.

In the class certification order, the Court ordered that Mr. Franklin could represent the following class:

All individuals (or their guardians or representatives) residing in the United States who, from July 19, 2002 through the date of judgment: (a) received any form of medical treatment as a result of initially presenting at the Emergency Department of a Scripps hospital or affiliate; (b) were uninsured at the time of treatment; and (c) were charged the amount set forth on the applicable Charge Description Master, and did not receive any discount or waiver of the charges.

The Court also appointed Lieff Cabraser Heimann & Bernstein, LLP to serve as Class Counsel.

Scripps Health operates the following hospitals in the San Diego area: Scripps Memorial Hospital Encinitas, Scripps Mercy Hospital Chula Vista, Scripps Memorial Hospital La Jolla, Scripps Mercy Hospital, and Scripps Green Hospital. Scripps Mercy Hospital Chula Vista became a campus of Scripps Mercy Hospital in October 2004.

Reporters seeking further information on the Scripps Health class action or a copy of the Court’s order should contact attorney Kelly M. Dermody at (415) 956-1000.

Source/contact

Kelly M. Dermody
Lieff Cabraser Heimann & Bernstein, LLP
(415) 956-1000

About Lieff Cabraser

Lieff Cabraser Heimann & Bernstein, LLP is a fifty-plus attorney law firm that has represented plaintiffs nationwide since 1972. We have offices in San Francisco, New York and Nashville. We represent plaintiffs in class and group actions and in individual lawsuits in cases involving substantial losses. For the last six years, the National Law Journal has selected Lieff Cabraser as one of the top plaintiffs' law firms in the nation.

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