Ciox Health, operating as IOD Incorporated, and ScanSTAT Technologies systematically overcharge for copies of patient medical records in South Carolina, a proposed class action lawsuit claims.
The 18-page lawsuit alleges the companies, two of the largest medical records providers in the country, have charged patients’ legal representation for copies of medical records in excess of what is permitted by South Carolina law, causing patients to “bear the ultimate responsibility for the costs of these overcharges.”
“Throughout the state of South Carolina, Defendants have taken patients’ attorneys’ right to access their medical records and unfairly and unlawfully profited at patients’ expense,” the suit claims. “They continue to do so to this day.”
Ciox and ScanSTAT generate tens of millions of dollars each year through maintaining, retrieving and producing patient medical records on behalf of healthcare providers nationwide, the lawsuit says. Under the companies’ contracts with healthcare providers, Ciox and ScanSTAT agree to process and fulfill records requests, including locating, retrieving, copying and producing the requested documentation for patients and their legal representatives, who have “no other choice” but to go to the defendants to obtain medical records, according to the case.
Though the defendants reap major yearly profits from furnishing patient medical records, the companies provide their services to healthcare providers free of charge, the complaint says. In exchange, the defendants get to keep the copying fees they charge to those who receive patient records, meaning Ciox and ScanSTAT stand to generate more profit by charging more for copies of patient medical records, the suit asserts.
According to the lawsuit, however, the defendants’ contracts with healthcare providers require the companies to charge copying fees in accordance with state and federal laws and indemnify healthcare providers for any liability from violations of those statutes. The complaint relays that because the law significantly limits the amount an individual may be charged for their medical records, the defendants “rely on the fees they charge to third-parties, such as patients’ attorneys” who request copies of medical records.
Ciox and ScanSTAT therefore charge third parties “the highest possible amount” in copying fees “regardless of the actual costs” of copying patient medical records, the suit alleges.
“The business model is simple: charge more, make more,” the case reads.
Under South Carolina’s Physicians’ Patient Records Act, patients and their legal representatives are given the right to receive copies of medical records, including medical bills, in the format requested, the lawsuit continues. Per the suit, the law also limits the amount of copy fees a healthcare provider may charge patients and their attorneys.
Nevertheless, the defendants have “willfully and consistently” overcharged patients’ attorneys for copies of medical records, including electronic copies, the complaint alleges, noting that patients are typically responsible for reimbursing their legal reps for expenses incurred.
“Thus, the substantial profit the Medical Records Companies generate from engaging in the above-mentioned billing practices comes largely on the backs and at the expense of individual patients throughout the state of South Carolina, such as Plaintiffs,” the case says.
The lawsuit seeks to cover all individuals and entities who, at any time since August 5, 2017, paid, were obligated to reimburse payment for, or are currently obligated to reimburse payment for a charge from one or more of the defendants in violation of the Patient Records Act for copies of medical records requested from a South Carolina health care provider by the patient’s attorney, and for which payment has not been reimbursed.
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