Counsel Announce Settlement in Uninsured Pricing Class Action Against Scripps Health

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Kelly M. Dermody of Lieff Cabraser Heimann & Bernstein, LLP, announced today that the parties have settled a class action lawsuit filed against Scripps Health ("Scripps") regarding pricing and collection practices for uninsured patients at its affiliate hospitals. Ms. Dermody is court-appointed lead counsel for the Class.

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I am very pleased that Scripps will maintain progressive policies for uninsured patients and that it will have more oversight over its outside collections agent. I hope uninsured patients will come forward and get involved in the settlement claims process because they will get automatic discounts and could even qualify for free care.

    The settlement, which will be considered for preliminary approval before San Diego County Superior Court Judge Steven R. Denton on February 1, 2008, resolves the Class Representative's and Class members' claims against Scripps and its affiliated hospitals.

Settlement Terms

As part of the settlement, Class members will be entitled to make a claim for 35% refunds or deductions from their prior hospital bills for treatment occurring between July 19, 2002 and the date of preliminary settlement approval. Low-income uninsureds may also seek to qualify their past bills for free or reduced care beyond the 35% discount. Scripps has also agreed to maintain compassionate pricing and collections policies going forward, including across-the-board discounts for all uninsured patients, regardless of income; enhanced charity discounts to enable moderate-income uninsureds to receive even greater discounts; financial counseling to uninsured patients to help them qualify for discounted pricing or receive extended payment plans; increased communications to uninsureds about Scripps pricing policies; and limits on collections practices and collections lawsuits. In addition, Scripps has agreed to maintain its uninsured pricing and collections policies going forward for at least four years, among other things. Scripps denies wrongdoing and liability in the case.

Settlement Class

The proposed Settlement Class includes any patient who:

(1) from July 19, 2002 to the date of the Court's preliminary approval order;

(2) received any form of medical treatment as a result of initially presenting at the Emergency Department of a Scripps hospital or affiliate;

(3) were uninsured at the time of treatment; and

(4) did not receive any discount or waiver of the charges for treatment.

Background

This class action originated on July 19, 2006, when uninsured patient Phillip Franklin filed a class action cross-complaint against Scripps Health, a 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 other uninsured patients at Scripps, was charged unreasonable, unconscionable and excessive rates for his treatment. In June 2007, the Court granted the case class action status. The Court also appointed Mr. Franklin as the Class Representative and Lieff Cabraser Heimann & Bernstein, LLP to serve as Class Counsel.

"The settlement achieves the goals of the lawsuit: a fair system of pricing for Scripps's uninsured patients during the Class period, and maintenance of policies and practices designed to ensure that this vulnerable population is treated fairly going forward. We commend Scripps for taking a leadership role on this important issue," said Lead Class Counsel Kelly M. Dermody, partner in the firm Lieff Cabraser Heimann & Bernstein, LLP, in San Francisco, California.

Phillip Franklin, the Court-appointed Class Representative said, "I am very pleased that Scripps will maintain progressive policies for uninsured patients and that it will have more oversight over its outside collections agent. I hope uninsured patients will come forward and get involved in the settlement claims process because they will get automatic discounts and could even qualify for free care." Franklin added, "I am proud to have played a part in this result."

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.

About Lieff Cabraser Heimann & Bernstein, LLP

With three offices nationwide and on the web at http://www.lieffcabraser.com, Lieff Cabraser is one of the largest law firms in America dedicated solely to advancing the rights of plaintiffs. For the last five years, The National Law Journal has selected Lieff Cabraser as one of the top plaintiffs' law firms in the United States.

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