Tennova Healthcare – Clarksville Hospital Sued Over Allegedly Unlawful Billing Practices

New to ClassAction.org? Read our Newswire Disclaimer

The operators of the Tennova Healthcare – Clarksville hospital and debt collector Professional Account Services, Inc. (PASI) are facing a proposed class action lawsuit that was recently removed from state to federal court in Tennessee.

At the center of the case is the defendants’ alleged practice of refusing to bill patients’ health insurance providers when the cost of treatment may be covered by a third party, such as an at-fault driver in a car accident. Instead, the suit alleges, Tennova enlists PASI to file hospital liens against patients for the full cost of treatment, an amount that the case points out is notably higher than the reduced rates that would have been billed to the patients’ insurance companies with whom Tennova contracts.

“Upon information and belief,” the complaint reads, “Tennova employs this business model under the belief that if it ‘holds out’ on submitting the medical bills to the patient’s health insurance provider, Tennova will ultimately receive a higher reimbursement rate (thereby increasing the Hospital’s profit margin) when a patient attempts to recover from the third party and/or its insurance provider.”

All told, the defendants willfully neglect their responsibility to submit medical bills to patients’ insurance providers with the hope that they will collect higher rates from third-party payers after filing liens against the patients, the case alleges.

The case explains this practice of filing liens to collect third-party payment is only lawful when applied to uninsured patients. The applicable state law – the Hospitals’ Liens Act – is intended to encourage treatment of uninsured individuals by securing payment from liable third parties, the suit continues, and was not meant to allow hospitals to neglect their responsibility to bill insurance companies.

The result of the defendants’ practice, according to the lawsuit, is that patients end up being billed at much higher rates than they would have been had their bills been paid through their insurance.