COLUMBIA -- Lawyers representing uninsured and underinsured S.C. hospital patients hope to convince the S.C. Supreme Court on Thursday that their clients were routinely denied discounts offered to the insured through 2004.
These discounts can shave 50 percent or more off a typical hospital bill, thanks to a little-known loophole in state code that at the time required hospitals to offer anyone the best rate possible if their bills are paid within seven days of being treated.
"We say these discounts should apply to everyone," said Cam Lewis, one of the attorneys representing the uninsured and underinsured patients.
The hospitals' lawyers say the loophole is being misinterpreted and it was closed in 2006.
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The S.C. Supreme Court is scheduled to hear both sides Thursday and later decide whether the uninsured and underinsured should be entitled to discounts offered to patients with better coverage and possibly get some money back.
Sam Mabry, who's expected to present the hospitals' case, declined comment Monday. Three Columbia-area hospitals are involved in the case.
Lawyers for the uninsured and underinsured want the court to make their case class-action, which would lead to further legal action to try to force hospitals to pay patients who did not receive the discounts. It's unclear how many people would be affected or how much money they could receive.
"My guess is the hospitals are afraid (the overcharging) could be worth hundreds of millions of dollars," said Lynn Bailey, a Columbia-based health care economist.
Bailey, who was hired as an expert witness by lawyers for the uninsured and underinsured, sai-d a final settlement depends on how many years a suit is allowed to include.
For example, based on the state's most recent data, from 2005, South Carolina hospitals recorded about 500,000 uninsured cases roughly 20 percent of the overall total.
Lawyers for the hospitals argued at a 2006 hearing that the 40-year-old law outlining the discounts was "completely outdated and has no effect today because none of the current contracts between hospitals and insurers fall within the discount statute."
Judge Kenneth Goode did not agree and ruled hospitals should still follow this law.
In his court order, Goode added that patients were not told about this payment option when being charged for services because the hospitals believed the law was outdated.
Bailey said some insurers receive discounts of 50 percent or more from hospitals while uninsured or underinsured patients receive no discounts.
Ultimately, no matter what happens Thursday, South Carolina's uninsured hospital patients should not expect any long-term legal changes in the way hospitals bill for services.
The state code was changed in 2006, essentially giving hospitals the green light to continue negotiating who gets discounts and who does not.
Bailey said even after state law was changed to benefit hospitals, the outlook is not totally bad for uninsured and underinsured patients.
The American Hospital Association is recommending its members write off any uninsured patients with annual incomes 300 percent of the poverty rate and apply a sliding payment scale to everyone else, she said.
"Some hospitals have adopted this. Some haven't," Bailey said. "Some have adopted this but don't tell anyone unless asked. Nobody advertises this."