Consumer Protection

John Muir Uninsured Patients

Result: Settlement valued at $115 million
Year: 2008

In re John Muir Uninsured Healthcare Cases

The John Muir cases were part of a series of successful class action lawsuits that stopped the exorbitant and unconscionable pricing of medical care for uninsured Californians. Lieff Cabraser attorney Kelly M. Dermody oversaw this litigation, representing nearly 53,000 uninsured patients who received care at John Muir hospitals and outpatient centers and were charged inflated prices and then subjected to aggressive collection practices when they failed to pay. The cases alleged that defendants charged excessive fees for medical care, charged uninsureds more than other patients for the same services, and engaged in price gouging against uninsured patients.

One of the cross-complainants in the John Muir litigation was John Redding, who was taken to an emergency room at John Muir Health in 2004. Mr. Redding was uninsured. Following a brief examination and administration of pain relief injections, Mr. Redding was admitted for four days of further observation and a CT scan. After discharging Mr. Redding without any specific diagnosis or instructions for further medical care, John Muir Health billed Mr. Redding for $44,678.58. Two months later, John Muir Health’s outside collections agent sued Mr. Redding.

On November 19, 2008, the Court approved a final settlement of the John Muir litigation. John Muir agreed to provide refunds or bill adjustments of 40-50% to uninsured patients that received medical care at John Muir over a six year period, bringing their charges to the level of patients with private insurance, at a value of $115 million. No claims were required, so every class member received a refund or bill adjustment.

Furthermore, John Muir was required to (1) maintain Charity Care Policies to give substantial discounts – up to 100% – to low income uninsured patients who meet certain income requirements; (2) maintain an Uninsured Patient Discount Policy to give discounts to all uninsured patients, regardless of income, so that they pay rates no greater than those paid by patients with private insurance; (3) enhance communications to uninsured patients so they are better advised about John Muir’s pricing discounts, financial assistance, and financial counseling services; and (4) limit the practices for collecting payments from uninsured patients.

The settlement is final and no appeals were taken.