On Wednesday, April 23, OSF Healthcare System filed suit in U. S. District Court (read the complaint here) against Dr. Joseph Banno and Peoria Day Surgery Center: three counts of racketeering and one count of consumer fraud and deceptive business practices.
There’s already bad blood between these two groups. In September 2006, Peoria Day Surgery Center filed an antitrust lawsuit against OSF Healthcare, doing business as OSF St. Francis Medical Center. The charge was that OSF was participating in anti-competitive business practices and trying to force Peoria Day Surgery out of business. That case is still pending, currently scheduled to go to trial in December of this year.
This new case alleges that Dr. Banno and Peoria Day Surgery Center (PDSC) have been perpetrating a fraudulent billing scheme since as early as 1997. Basically, the suit says that Banno and PDSC were not charging their patients the proper co-insurance amounts, instead passing those costs on to their patients’ employers through deceptive billing practices.
Besides the deceptive billing practices, this arrangement also caused a lot of people to choose PDSC for their surgical needs who would have otherwise gone to OSF. In other words, there was no co-pay at OSF, but there was supposed to be a 30% (later 50%) co-pay at PDSC. If PDSC had been charging patients the proper co-pay amounts, most patients arguably would have gone with the cheaper option — OSF. Thus, OSF lost considerable revenue because of PDSC’s practices, the suit alleges.
OSF is suing for unspecified damages and demanding a jury trial.
Not sure why this major development has not been reported in the mainstream media yet.
C.J. “Not sure why this major development has not been reported in the mainstream media yet.”
Ummm … no one sent out a press release? Things slips through the cracks. Does the PJS have someone who goes through federal court filings? They used to, but it may be more catch as catch can because of all the layoffs. The feds are harder to cover than the county courts, as I recall.
I wouldn’t attribute this to anything but a stressed beat reporting system.
As to the case itself, it would seem to be that a fraudulent billing school would be of interest to the criminal court system, not civil.
But as is often pointed out to me, I am NOT a lawyer.
I thought Peoria Day Surgery was used by Harrison Putman’s patients after cosmetic surgery. They pay cash. Banno must really be raking the moolah if OSF sees him as a threat, but then I don’t understand the logistics.
If Peoria Day Surgery decides not bill the patients the for their portion after the insurance what business of OSF’s is it or even the health plans. Isn’t this the same thing that Proctor does with it’s Proctor Preferred Plan?
As for defrauding the employers insurance plan….It states that out-of-network claims (such as non-urological surgical procedures at PDSC) are reimbursed at 70% of Usual and Customary. That means that even if the surgery center increases their bill 100 fold the insurance plan still pays the same amount (70% of U&C). As a out-of-network provider they have the right to charge anything they want for their services. The U&C clause protects the health plan in such instances.
ALSO: This post is a good “get” for C.J. It certainly is an interesting tail, and I fully expect that someone at the JS and other local media will be trying to play catch-up.
Kudos,
There is a wealth of opportunity to be had investigating billing practices of all the medical facilities in Peoria. When I look at my statements, I can see that someone somewhere is being royally screwed.
My statements looks something like this:
Charge for Procedure: $10,000
Employer Discount: -$8000
Charge to Patient: $2000
Insurance coverage (80%): -$1600
Billable amount (what I write a check for): $400
So what is the real cost here? Is it $10,000 or $2000? Where do each of these numbers come from? Yes I realize employers negotiate insurance packages and rates to get the ‘best’ deal. I have a hard time that the medical provider is losing money on the $2000 charge. So who is paying $10,000? Probably some uninsured person or someone with a less desirable insurance plan. There in seems to be the scandal. Is the $10,000 figure arbitrarily hight? Shouldn’t medical providers be charging the same charge to all patients before applying the 70/30, 80/20, or 90/10?
That’s the saddest part of being uninsured. First you are responsible for the entire bill and second there is no one getting you a better deal. It is like assuming the sticker price is the price you are going to pay for a car, when everyone else pays less. If you are uninsured it never hurts to ask if there are discounts available. Most places will come down from the stated price, because really no one should be paying that price.
So is OSF a business or a non-profit? They’re sure acting like a business – a damned greedy one.
Queuing Dr Carroll in 5, 4, 3, 2, ….
I thought Dr. Carroll was banned from the blogosphere; or was that just from the Peoria Pundit?
OSF, non-profit? You have to be joking.
The medical industry is big, big business, and, as with any business, its about the money.
I tend to agree with mahkno’s line of reasoning bout the murkiness of what is the “true” price of a medical procedure in this community.
Dr. Bano may be the key for lower costs in our community by providing competion to a hospital. But of course since he is a capialist it is his privlage (and obligation) to raise his prices to “slightly” below his competitor EVEN THOUGH he might be able to charge remarkably lower prices.
We need even more competition such as Dr. Bano provides and then perhaps we will see “realitic” medical procedure pricing. Its too bad that OSF feels the need to try to keep its monopoly and squash competition by any means available.
We need transparency in billing.
We also equitable billing, where the cost of billable procedure is the same for everyone. Basically I see the charge for procedure and the discount given as being problematic. I suspect the charge is being inflated to carry costs to the uninsured and that just isn’t right.
The lawsuit just seems silly because there are shenanigans being played by everyone when it comes to billing.
Mouse: I have heard that the reason they spend so much on new buildings is they HAVE to spend the money to keep the state off their backs regarding their NP status. Sumpin like that…
Vonnie, who said a not-for-profit shouldn’t still be run like a business? You should pose that question to groups like Easter Seals, the Children’s Home, Red Cross, South Side Mission, etc.
vonster, I don’t know about the building, you could be right. I know there is also an issue many ohter alleged non-profit hospitals get in trouble with having to do with how much they “spend” on indigent care, and other “charitable” works, vs. how much they do for fees (or try to collect by suing peope). If you go look at the civil case dockets, you will see that one of the most common plaintiffs in Peoria County is OSF. And one of the biggest causes of bankruptcies in this area is medical debts.
Is there any difference between a non-profit and a not-for-profit organization?
mahkno brings us the questions I have had and why are the charges broken down (at least on our bills) for the building fee, the doctor fee, the room fee, the this and that fee?
How do you end up paying $600 as your portion on a $12,000 bill?
“one of the biggest causes of bankruptcies in this area is medical debts.”
It is the BIGGEST reason in the nation.
You are probably right, Mahkno, and if we get Hillarycare, the medical industry will bankrupt the whole country.
That is a bit of a leap there Mouse.
In most countries where there is nationalized health care, the charges are fixed by the government.
Have you seen the Frontline episode on Health Care? It is worth watching. So is Moore’s Sicko too… yeah I know it is Moore film and he goes off on the deep end in some it, like with the whole trip to Cuba. There is some genuine truth in there that is worth seeing.
http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/
I don’t think it’s a leap at all, but this is not a good forum for all the complexities of health care. Suffice it to say that there is a lot of misinformation out there. For one thing, the Govt. (and to some extent the Insurance companies) in essence already controls prices in the U.S. For another, in the U.K. there is a govt. system and a private system that compete. That element of competition is critical to the survival of both actually. Finally, the Soviet/Russian system, although it doesn’t get much attention from the socialist apologists in the drive-by media, was and is an unmitigated disaster. Despite the vast resources and power of Russia, Russian health care is worse than many “third world” countries.
Hey, whenever money is no object where to they go for medical care. Shah of this; King of that; they all come here for the best medical care in the world. We must be doing something right. (P.S. by “here” I mean USA, not Peoria)
I heard a report on the radio concerning going to other countries for health care. India, I think was the subject, is now becoming an extremely popular destination for people seeking relief from high-cost procedures.
The person featured in the story needed a procedure (not sure what, sorry this story was a few weeks ago) that would have cost about 100,000 in the U.S., but cost 30,000 in India. The man said he had to cash his life savings out, but it beat declaring bankruptcy or not having the procedure and dying.
The downside is the hospitals are not staffed to handle the influx of people coming over there.
The Kings, Emirs and dictators go to the best hospitals and pay big money. There is no staffing problem. The staffing problems, however, are acute in places like So. Calif., where the American taxpayers pick up the bill for untold thousands of illegal immigrants and the walk-over-and-drop babies that get instant citizenship, thanks to a loophole in our law that desperately needs to be closed.
Why does every subject have to end up with immigrant bashing. All the problems in the world are caused by illegal immigration? Rising health care – blame the immigrants; stock market down – blame the immigrants; Kellar branch – have we blamed the immigrants for that one yet? Guess what, Dobbs, Hannity, Savage just may be wrong about blaming all immigration for all our problems. As an example, check out the following:
http://www.nctimes.com/articles/2006/11/16/news/top_stories/1_03_3411_15_06.txt
The fact is ILLEGAL immigrants are costing taxpayers billions in health care costs. You may not like to hear it, dd, but it’s true. As for the stock market, I hadn’t heard that, and I doubt even an illegal immigrant is stupid enough to be a Rabid Trail Advocate, so I think we can leave the Kellar Branch out of the discussion.
It is amazing that several years ago small hospitals were in financial trouble … and now Graham Medical , Methodist, St Francis are all spending millions on bricks and mortar. Where is the payment for all this coming from?? A high percentage of patients are or going to be on Medicare, Medicaid or no pays. They claim they can not make it on medicare and medcaid pay levels…then how are they going to pay for the new buildings & equipment? When did they spend and equal amt. of time and effort on reducing the cost of standard proceedures–endoscopy, hernia surgery, etc. Maybe we need more “Free Standing” facilities and common sense hospital boards with blue collar rep.
LJE
Just one self-sufficient words about NBC inside the Tv show. This individual includes a actually difficult immigration plan. This individual managed to graduate within the Harvard Collage. At this time he possesses his 1 Radio Show. He did not similar to this Us leader.
“The Mouse” is totally right, if Americans finally get the healthcare it’s citizens need, the up front cost of preventative care will Bankrupt us alot sooner than the cost that is spread to the other patients of the hospital (the way it is now) when those preventative measures aren’t taken and that leads to a serious situation that the patient won’t be able to pay for, only at that point, at the emergency room, all kinds of on-call doctors will be required, apparently that is what is good for our healthcare system, according to “the mouse”…..and he/she also spouts that lobbyist paid sound-bite “it’ll Bankrupt the entire country”, and while I have no faith whatsoever in the current political system we are forced to have patients with, I hardly believe our representatives would try to start from scratch to develop an untested way of doing things, especially since we don’t have any room for mistakes (the way we did before we hired George W. Bush) and for the next hundred years those 8 years will be the excuse for the stuff our future presidents will choose to do. What example are you siting for that figure though, I realize that for people who subject themselves to Glenn and Rush’s brainwashing, the rational in your mind is “surely it’s true or he wouldn’t be saying it in every sentence”, but all the countries that are trying to tip toe forward into something that resembles a civilized society, that have some sort of single-payer health care, none of them are bankrupt, so you might want to try coming up with a more logical argument for why this country’s citizens should want to remain in a 3rd world hell hole when literally every other country, nation, province, or island, has come up with a better system than we have, without even trying. But I guess all you see is the up-front cost, I wish I could be content being as willfully ignorant as you are.