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Longer-term impact of settlement yet to be determined

Tupelo — While news of North Mississippi Health Services’ recently announced agreement with a plaintiffs’ attorney group headed by the Scruggs Law Firm has spread far and wide, its broader, longer-term impact has yet to be determined.

North Mississippi Health Services (NMHS) — the parent corporation of the 650-bed North Mississippi Medical Center in Tupelo along with five smaller hospitals located in northern Mississippi and western Alabama — agreed to settle concerns over discounts provided to uninsured patients. The settlement provides for adjustments to the medical center’s policy for providing discounts to patients having no insurance coverage for their healthcare services.

The settlement comes at a time when the hospital industry has been scrutinized under a microscope itself.
In recent months, class-action lawsuits have been filed against 40 hospitals and healthcare systems across the country, alleging that some hospitals have failed to fulfill their charitable mission by not providing healthcare to uninsured patients at discounted prices. North Mississippi Health Services was not a defendant in those actions, but agreed to the settlement to avoid the cost and distraction associated with a potential lawsuit of this magnitude.

In a written media statement, NMHS’ new CEO John Heer said, “There are several community issues which we need to be addressing. Getting tangled up in a lawsuit would distract our time and attention away from addressing those issues.”

Heer also added that after reviewing the proposed settlement, “there seemed to be little reason” to pursue lengthy litigation of the issue.

Heer, who declined comment beyond the written media release, also stated in the announcement that since its inception, NMHS has had charity care policies in place to provide care at no cost, or at reduced cost, to patients unable to pay the full cost of their care. However, NMHS said in the media release that it was felt that those policies could be improved by specifically addressing care provided to patients having no health insurance coverage.

The release also stated that during 2003, NMHS processed over 6,200 applications for charity care and provided care, which if billed at NMHS’ undiscounted charges, would have produced over $31 million in additional revenue. As part of the settlement, NMHS also agreed to refund any amounts paid by uninsured patients who received services during the past three years and who would have qualified for discounts under the revised policy.

Nationally, advocacy groups for uninsured patients have lauded the action as significant. However, in a written statement following the announcement, American Hospital Association president Dick Davidson said that the NMHS settlement had “no bearing on the lawsuits brought against us or any of the hospitals that day in and day out provide outstanding care for patients and their families.”

Interestingly, many individuals contacted for analysis declined to comment on the NMHS agreement or said that they were not sufficiently familiar with its specifics. One individual who would comment was Rep. Steve Holland (D-Plantersville), who has frequently questioned NMHS policies.

“It was a significant statement by NMHS to settle, and I hope that it is an indication of what we will see under John Heer,” Holland said. “This may bring some equity to a situation that needed attention.”

Contact MBJ contributing writer Karen Kahler Holliday at mbj@msbusiness.com.

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