HELENA — The Montana Supreme Court has revived the case of a woman who says it’s unfair for hospitals to charge different rates to treat insured and uninsured patients.
The high court reversed District Judge James Reynolds’ decision last year to throw out the case challenging the agreements hospitals make with insurance companies to set discounts for the companies’ customers.
The justices ruled 4-1 Tuesday that Reynolds didn’t address all of plaintiff Jessica Gazelka’s arguments on whether those discounts discriminate against uninsured patients.
Montana hospitals can negotiate agreements with insurance companies that set discounts for the companies’ customers. The law allowing the practice is the Montana Preferred Provider Agreements Act.
Gazelka, an uninsured 23-year-old woman who was in a car accident in 2010, sued St. Peter’s Hospital over the Helena hospital’s preferred provider agreements.
Uninsured patients are charged more for the same medical care as a result of the agreements, she argued. She asked a judge to rule the agreements violate the Montana Constitution’s equal-protection provisions.
Attorneys for St. Peter’s Hospital responded that the insurance company agreements have nothing to do with the amount Gazelka was charged, and that they are beneficial because they help lower cost through more efficient-care delivery.
The hospital argued that simply being uninsured is not a condition that qualifies for protection under the state constitution’s equal protection clause. St. Peter’s attorneys also said that most of Gazelka’s medical treatment after the accident was paid for by the other driver’s insurance or was discounted through a program for poor patients.
Reynolds ruled for Helena’s St. Peter’s Hospital in May 2014 after concluding that uninsured people are not a protected class under the state constitution.
The Supreme Court reversed Reynolds on Tuesday, saying he did not address all of Gazelka’s arguments. Further proceedings are necessary to determine whether Gazelka’s equal-protection claims are valid, the court ruled.
The Supreme Court did not rule on the substance of Gazelka’s case, which now goes back to the lower court.
John Morrison, Gazelka’s attorney, said he was confident the high court would rule the way it did.
“We believe the hospital’s practice of charging uninsured people more than insured people clearly violates the equal-protection clause of the Montana Constitution,” he said Wednesday. “We’re looking forward to presenting that issue again to the district court.”
St. Peter’s attorney, Randy Cox, did not respond to a request for comment.