The lawsuits contend that the hospitals charge uninsured patients undiscounted ‘sticker’ prices for health care and then use aggressive collection methods, including the seizure of assets and garnishing of wages. The actions also allege that the institutions use creative accounting practices to grossly distort the small amount of charity care they provide to uninsured patients. These cases accuse the hospitals of breaches of contract, breaches of good faith and fair dealing, breaches of charitable trust, consumer fraud and violations of the federal Emergency Medical Treatment and Active Labor Act (EMTALA). EMTALA requires that hospitals treat patients in emergency cases regardless of whether they are insured or not. The lawsuits contend the hospitals often will not admit a patient unless the patient agreed to pay charges in full.

The action alleges that, “The hospitals charge the uninsured 'sticker' prices for health care, an amount higher than any other patient group, and then, when the uninsured can't pay, harass the uninsured through, among other tactics, aggressive collection efforts such as garnishment of wages and bank accounts, seizures of homes and personal bankruptcies."

Hospitals or hospital groups named as defendants in the lawsuits include: Advocate Health Care Network and Provena Health, Illinois; Fairview Health Systems and Allina Health, Minnesota; Catholic Health Care Partners, Ohio; East Texas Medical Center Regional Healthcare System, Texas; Phoebe Putney Health Systems Inc., DeKalb Medical Center, Medical Center of Central Georgia Inc. and Wellstar Health Systems Inc., Georgia; Baptist Health Systems Inc., Alabama; Baptist Hospital of Miami Inc, Florida; and St. Thomas Hospital of Tennessee.

More lawsuits alleging similar allegations are expected to be filed in the near future, based on allegations that many nonprofit hospitals in the United States operate in similar fashion as for-profit organizations and amass large sums of money while operating for-profit subsidiaries. Attorney Richard Scruggs, attorney for the plaintiffs in the actions, stated that hospitals are "hoarding billions of dollars while dispensing relative pennies in health care."

The lawsuit filed in Florida against Baptist Hospital of Miami Florida names Miriam Sabeta, mother of two, as a plaintiff. She is described as having been a temporary worker earning about $11,000 a year when she went to the emergency room for treatment of an unspecified condition. Baptist allegedly failed to place Sabeta on a low-payment plan, then later sued her for $7,104. In 2002, the hospital obtained a judgment in its lawsuit against her. Sabeta is reported to have refinanced her house and paid the hospital $7,000, yet further collection efforts have continued for fees, interest and other costs,'' the suit alleges.

The issue of hospitals' not paying property and other taxes while delivering relatively little charity care has gone national in the past year. In February 2004, the Illinois Department of Revenue took steps to revoke the property-tax exemption given to Provena Covenant Medical Center in Urbana, Illinois. In March, Representative Bill Thomas (R-Calif.), the House Ways and Means Committee chairman, sent shock waves through charity groups by suggesting that Congress examine what advantage taxpayers receive from nonprofit hospitals.

The Florida complaint cites a report about hospitals prepared in 2002 by the office of then-Attorney General Bob Butterworth. Written by former journalist John de Groot, the report states that for-profit hospitals in South Florida provided twice the charity care of not-for-profits, based on uncompensated care. The key seems to be location: Hospitals near expressways, which get many accident victims, tend to provide more uncompensated care than, say, Holy Cross or Baptist, which are located in affluent neighborhoods. For-profit hospitals praised the report, but nonprofits called the numbers misleading.