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BJC Healthcare, the area’s largest health care system, will provide a 25 percent discount to all hospital patients without insurance under a class-action settlement agreement announced Tuesday. Some uninsured patients treated in the past also may be eligible for refunds or discounts.

Under the settlement, uninsured patients who were treated at a BJC hospital since Jan. 1, 1999, and paid some or all of the cost, may be eligible for a partial refund or reduction in their bill.

Class members will be notified of their right to submit a claim for the refund. The discounts will also apply to uninsured patients receiving treatment until at least 2012.

"All in all, it’s a fair agreement," said Dave Kuneman, one of the plaintiffs. "Agreements are never perfect for everyone. It’s the best that Barnes and our class can do in the real world."

Assuming it receives a judge’s final approval, the settlement is expected to become effective in early September.

It’s unclear how much the settlement will cost BJC.

The suit was one in a string filed across the nation in 2004 on behalf of patients without insurance who alleged that they were charged two to three times as much for treatment as patients with insurance. About a year ago, it became the first of those filed in 2004 to receive class-action status.

BJC was in the process of appealing that ruling before the settlement was reached.

Several area health care systems originally faced similar lawsuits or were threatened with them. Those hospital systems then began discounting prices to uninsured patients more aggressively. Attorneys said BJC’s changes were less dramatic so its case continued.

BJC, plaintiffs and their attorneys applauded the settlement. National experts on charity care and health care finance said it was a step in the right direction but expressed concerns.

"It’s certainly better than the current situation," said Mark Rukavina, executive director of the Access Project, an advocacy group for the uninsured that examines hospital billing practices.

But he added, "The effectiveness of these systems are in the details."

Under Tuesday’s settlement, all uninsured patients visiting a BJC hospital for inpatient or outpatient hospital services will receive the 25 percent "self-pay" discount. Those able to pay within 30 days will receive an additional 5 percent discount.

Patients in families earning less than 400 percent of the federal poverty level, or about $82,600 for a family of four, will continue to be eligible for additional "charity care" discounts. Patients in families earning less than 200 percent of the poverty level, or about $41,300 for a family of four, will receive care free of charge.

The charity care discounts have been in place since 2005, the year after the lawsuit was filed. Plaintiffs attorneys’ had said those changes were not being communicated effectively to patients. BJC disagreed.

The settlement agreement requires certain notices and signage, including "increased efforts to communicate these policies to uninsured patients."

How the policies are communicated as well as the documents patients must provide will help determine how many people are helped, Rukavina said.

While all uninsured patients will be eligible for the self-pay discount, those seeking the charity care discount need to apply for it and supply proof of income and number of family members credit scores. Exceptions can be made for homeless patients. Patients including small-business owners and farmers could be asked to provide information on assets as well as income.

A third-party administrator could review whether BJC is adequately providing the discounts.

"You’re always going to have some people who fall through the cracks, but it should not be the majority of the patients," Rukavina said.

Not all services will be covered. The discounts apply only to the hospital portion of the bill and are only for nonelective procedures. Whether a procedure is considered elective will be determined by physicians in consultation with financial assistance coordinators, said June Fowler, a BJC spokeswoman.

While Rukavina was concerned too few patients might receive the free care, Glenn Melnick, a professor of health care finance at the University of Southern California, saw another potential consequence. He said business owners, particularly those struggling to provide private insurance, could end hospital coverage and advise employees to go to BJC hospitals.

"The incentive is there to game the system. Whether it happens I don’t know," Melnick said.

The settlement allows BJC to end the discount policy before 2012 if an influx of uninsured patients starts seeking care from its hospitals. Fowler said that option would be reserved for a significant policy change such as a national health care program or a change to federal law prohibiting the discounts.

Fowler said the agreement was reached in part because of a "recent clarification of very complex federal rules governing medical billing." The clarification Fowler referred to was made public in February 2004.

Since then, hospitals across the country and the St. Louis area have made significant changes to their charity care policies. Those changes were often spurred by threats of litigation, legislative action or investigation.

Many hospitals, particularly those with a nonprofit status, saw that status in jeopardy if they did not increase the amount of charity care provided.

Chip Robertson, an attorney representing the class, said Tuesday’s settlement is a "serious attempt" by BJC to address the problem of the uninsured.

BJC operates 13 hospitals, with seven in the St. Louis metropolitan area. Its annual revenue is about $2.8 billion and it cares for about 30 percent of the hospital patients in the metro area.

BJC spends the most on charity care of any area hospital system. The picture is different when the amount spent on free care is examined as a percentage of operating revenue, which is the method many health care experts use to compare hospital systems of varying sizes.

BJC spent 0.84 percent of its operating revenue on charity care in 2005, the most recent year available from the Missouri Hospital Association.

This was less than the state average of .93 percent and less than the area’s other major hospital systems.

mjfeldstein@post-dispatch.com | 314-340-8209

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Filed under: money by Specialist