A $6,000 urine test? Bay Area hospital company sued over ‘unconscionable’ fee

San Jose Mercury News (CA)

Savannah Thompson walked into the emergency department at John Muir Medical Center in Walnut Creek just after midnight June 14, fearing she had ingested fentanyl — a synthetic opiate responsible for a North America-wide epidemic of fatal overdoses — in what she had been told was cocaine, according to a new lawsuit accusing John Muir Health of fraud.

Medical staff evaluated Thompson, gave her the overdose-reversal drug naloxone, along with intravenous fluids and an electrocardiogram heart test, and took blood and urine samples before sending her home within three hours of her arrival, according to the suit. After she left, the hospital company screened her urine for drugs, as it routinely does with emergency room patients, the suit alleges. Then John Muir Health billed her $6,095.70 for the test, according to the suit, which is seeking class action status and accuses the hospital company of fraudulent billing practices and breaking California consumer-protection law.

The fee charged to Thompson, a Contra Costa County resident, was almost 100 times Medicare’s reimbursement rate of $62 for the test, the suit claims, adding that as a rule of thumb for medical billing, charging up to just under 1 1/2 times Medicare’s reimbursement amount is “considered reasonable.”

State health department data show John Muir Health has been imposing an “unconscionable” fee of more than $5,000 for the test since at least 2018, and raising the price every year, the suit claims. The typical cost for the test in an emergency room in the region is $600 to $700, the suit alleges.

John Muir Health received more than $6,000 from Thompson’s outside insurance provider, and wants her to pay an additional $7,100, the suit claims. The laboratory-services portion of the total bill amounted to nearly $10,000, the suit alleges.

In order to receive emergency services, Thompson had to sign a contract the hospital requires, agreeing to pay according to the “regular rates and terms” of the hospital, according to the suit, which included as an exhibit a copy of the signed contract.

John Muir Health said in a statement Tuesday that the costs of medical care and tests “will always be lower in an outpatient setting than in an emergency department or hospital,” and that costs are higher in the emergency department “because we must have expert physicians, nurses and staff, as well as comprehensive services available 24/7/365.”

Federal law requires hospitals to treat patients first and discuss payment afterward, in order to stabilize a patient’s condition, John Muir Health said. “By law, hospitals are not allowed to discuss payment prior to treatment or give out price lists,” said the company, which operates hospitals, urgent care centers and clinics in Contra Costa, Alameda and Solano counties.

“The claims will not withstand scrutiny in a court of law,” the company said.

Thompson has made partial payment on her bill but is unable to cover the entire cost, according to the suit.

Thompson is seeking a court order forcing John Muir Health to cut the test’s price to “fair value” and return to her, and others charged for it, any money they paid beyond that value.