Steward Health Care to face patient class action alleging racketeering, fraud

Dallas-based Steward Health Care will face a class-action lawsuit alleging that the system overbilled patients or demanded payments from third parties not responsible for the bills, a federal court ruled Feb. 25. 

The U.S. District Court for the Eastern District of Texas confirmed a prior magistrate judge recommendation, ruling that the two proposed patient classes adequately supported their claims against Steward and Medical Reimbursements of America under the Racketeer Influenced and Corrupt Organizations Act.

The two plaintiffs who brought the claims are Beverly Williams and Amy Johnson, who were treated at Steward's Wadley Regional Medical Center in Texarkana, Texas, for injuries they suffered in motor vehicle accidents. The plaintiffs allege that Steward deceptively collected "unauthorized and illegal payments" for hospital treatment related to their injuries. 

The plaintiffs, lodging similar allegations based on separate incidents, claim that Steward listed them as "self-pay" patients and circumvented the primary insurers that they both listed. Ms. Williams alleges this resulted in a charge to her of $9,750.79. Ms. Johnson alleges she was charged $19,394.54 and the defendants unlawfully obtained $2,795.48 from her personal injury protection policy. 

Both defendants moved to dismiss the plaintiffs' claims. A magistrate judge in December 2021 recommended denying the defendants' motion to dismiss the case, which then moved to the district court. 

"The court has carefully reviewed the relevant briefing, the report and recommendation, the objections and the response to the objections, and is of the opinion the findings and conclusions of the magistrate judge are correct," the district court ruled. "The court adopts the magistrate judge's report as the findings and conclusions of the court."

"Steward strongly disagrees with plaintiffs' contentions and believes it appropriately pursued the amounts owed through its relationship with MRA," Steward told Becker's Hospital Review. 

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