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Rush Medical Sued For Price Gouging

10/19/2005 5:12:49 PM

CHICAGO, Feb. 23 /PRNewswire/ -- One of Chicago's most respected hospitals, Rush Medical, was hit with a class-action lawsuit today, claiming the 170-year-old institution is using fraudulent price-gouging tactics to make millions of dollars from treatments provided to the region's poorest patients.

The case was brought by Danielle Lebherz, a 28-year-old Chicago resident. In September of 2003, Lebherz came to Rush Medical's Oak Park facility for emergency care. She was discharged less than 24 hours later and billed more than $22,000.

According to the complaint, had Lebherz been covered by an HMO, her insurance company would have been charged only $6,534, a difference of more than $15,000.

Steve Berman, managing partner of Hagens Berman Sobol Shapiro, the law firm representing Lebherz, says that Rush bases its charges on a price list, from which insurance companies negotiate a discount rate. But according to the suit, those who are uninsured are stuck with the highly inflated listed rates.

"Rush charges individuals for the proverbial $10 aspirin so that they can give the big insurance companies a 90 percent discount. The problem is that those who are least fortunate are being saddled with the full bill. I find that personally abhorrent, and we believe it is patently illegal," Berman stated.

According to the complaint, Rush's negotiation strategy has paid off handsomely for the organization. In 2001, Rush Oak Park and Rush North Shore were reported to be making a potential profit of more than $9,000 for every uninsured patient treated, compared to a state average of just $3,641, the suit states.

According to the suit, Lebherz originally sought care at Rush Oak Park, but the facility was not equipped to do the emergency surgery Danielle needed. She was told that she would be transported to Rush Medical Center but when the facility learned she was uninsured, physicians there refused to treat her, and instead arranged for physicians affiliated with the Rush System to do the surgery at Rush Oak Park.

She underwent a surgical procedure and was discharged the next day.

When Lebherz learned of her extreme debt, she attempted to make payments, but the hospital has since turned her account over to a collection agency, according to her attorney.

Lebherz was forced to forego follow-up appointments with her Rush- affiliated physician in fear of racking up additional debt.

"I went to Rush in horrible pain and in urgent need of care," Lebherz said. "I didn't have the opportunity to price-shop local hospitals. But I made the mistake of assuming I would be treated fairly when it came to pricing. I was wrong."

An integrated healthcare system, Rush links a number of community healthcare facilities and regional hospitals to services available at Rush Medical Center, and professes to provide the community with charity care services.

But according to the complaint, Rush is anything but charitable. Serving a population of three million in the Chicago area, Rush provided charity care for just 115 patients in 2003, or .002 percent of its actual patient load. In fact, Rush North Shore, one of the facilities in the network, provided no charity patient care in 2003, the suit states.

According to reports included in the complaint, Rush is one of the region's most expensive healthcare facilities, and one of the most profitable. According to one study, Rush Medical Center's prices were 57.1 percent higher than the state median. Another recent study cited in the complaint shows that the average price for a semi-private hospital room in Illinois stands at $589. The same room costs $783 in the Rush system.

"There is nothing wrong with a non-profit setting prices to meet market demands," Berman added. "But to force the working poor to finance discounts given to insurance companies is horribly misguided."

The suit claims that Rush violated the Illinois Consumer Fraud Act and benefited from unjust enrichment and seeks full restitution for potential class members. It also asks the court to immediately stop Rush from charging self-pay patients a higher rate than its insurance payors.

About Hagens Berman Sobol Shapiro, LLP

Hagens Berman Sobol Shapiro, LLP is a law firm with offices in Seattle, Cambridge, Chicago, Los Angeles, and Phoenix. The firm has developed a nationally recognized practice in class-action litigation. The firm is co-lead counsel in litigation to recover losses from Enron employees' retirement funds, and represented Washington and 12 other states in lawsuits against the tobacco industry that resulted in the largest settlement in the history of litigation. The firm also served as counsel in several other high-profile cases including the Washington Public Power Supply litigation, which resulted in a settlement of more than $850 million, and the $92.5 million settlement of The Boeing Company litigation. Other notable cases include litigation involving the Exxon Valdez oil spill, Average Wholesale Price Drug litigation, United Airlines litigation, Exxon Mobile Securities litigation, and Louisiana Pacific Siding litigation.

CONTACTS: Steve Berman 206-623-7292 Hagens Berman Sobol Shapiro, LLP Mark Firmani 206-443-9357 Firmani & Associates, Inc.

Hagens Berman Sobol Shapiro, LLP

CONTACT: Steve Berman of Hagens Berman Sobol Shapiro, LLP,+1-206-623-7292, or; or Mark Firmani of Firmani &Associates, Inc., +1-206-443-9357, or

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