Judge lets lawsuit accusing Prisma Health of overbilling patients to go forward

A state judge is allowing a potential class action lawsuit alleging that Prisma Health hospital system has systemically overbilled numerous Medicaid patients to go forward.

The decision by Judge Daniel Coble of Richland County to deny summary judgment and not dismiss the lawsuit keeps the case alive.

In another setback for Prisma, Coble also ruled that lawyers for Dawn Darby, the Richland County resident who brought the lawsuit, can begin to conduct detailed discovery. In his ruling, the judge ordered Prisma to produce thousands more documents than system they have already turned over to the plaintiff’s lawyers.

Prisma officials issued this statement Monday: “Prisma Health does not respond to active litigation. Because this matter is currently in litigation, we will not provide any comment at this time.”

Prisma Health, which has major hospital and health operations in Richland and Greenville counties, is one of the largest health care providers in South Carolina, receiving over $6 billion in annual operating revenue, according to its website. It has 29,309 employees, including 5,429 total doctors and other clinicians in its health networks.

Darby, who brought the lawsuit in 2021, is the mother of a child identified only as J.D., who suffered a permanent injury at birth and, as a result, is a qualified Medicaid beneficiary, according to her initial complaint. J.D. requires frequent medical care and has been a regular patient of Prisma for his entire life, according to Darby’s legal filings.

Under South Carolina’s rules regarding Medicaid, a health provider must regard the Medicaid payment as the full and final payment for covered health services, according to Darby’s lawsuit. Medicaid is the federal government’s health insurance program for low income persons.

In December 2020, Darby received a bill from Prisma for Medicaid-covered health services, her lawsuit said. After she spoke to Prisma and thought she had resolved the issue, “she once again received correspondence from Defendant Prisma Health notifying her of the outstanding balance and informing her that she would be sent to collections if she did not make payment arrangements,” her lawsuit said.

Darby did not pay the December 2020 bill, and Prisma’s lawyers contended in legal filings that because she didn’t pay the bill, she had suffered no injury.

“(Darby) did not pay anything toward the medical bill she received from Prisma and was not sent to collections for failing to pay the bill. Accordingly, (she) has not suffered any damages, Prisma’s lawyers argued in a filing. “At best, (Darby) received a medical bill that she was not supposed to receive and had to make a phone call to Prisma requesting that the bill be re-submitted to Medicaid.”

In legal filings, Prisma lawyers also contended that Darby had produced no evidence that any bill of hers had been sent to the hospital’s collections department. They also alleged that no specific law gives Darby the right to sue over the kind of billing dispute she is alleging.

Darby also received numerous other bills from Prisma that she shouldn’t have from 2018 though 2021, according to her legal filings in the case.

The judge agreed with Darby’s lawyers, who argued that dealing with the bills — including the December 2020 bill — that Prisma sent her amounted to more than just a harmless bother.

“This Court finds that (Darby) did, in fact, suffer injuries and damages by receiving an unauthorized balance bill for covered services, through lost time and resources,’’ Coble wrote.

Darby’s lawyers said in her complaint they are seeking class action status, and they believe the class includes “hundreds of individuals.”

Prisma’s attorneys include Jon Robinson, Tina Cundari, Austin Reed and Rachel Lee, as well as S.C. House Speaker Rep. Murrell Smith, R-Sumter.

Darby’s attorneys include Tem Miles, Vincent Sheheen, Jessica Fickling, and Matthew Richardson.

It will be up to Coble to decide whether the case qualifies as a class action.