San Antonio emergency hospital sued for alleged overbilling

Ella Castle

A former San Antonio man has sued an emergency hospital and its operators alleging they fraudulently overcharged for lab work to generate higher reimbursements. Kenneth Keslar II, who now lives in Ohio, accuses Baptist Emergency Hospital at Shavano Park of carrying out a scheme known as “unbundling,” which is when […]

A former San Antonio man has sued an emergency hospital and its operators alleging they fraudulently overcharged for lab work to generate higher reimbursements.

Kenneth Keslar II, who now lives in Ohio, accuses Baptist Emergency Hospital at Shavano Park of carrying out a scheme known as “unbundling,” which is when a facility bills separately for some or all tests analyzed as part of a panel rather than billing for the panel.

Keslar wants his complaint certified as a class-action lawsuit so that other patients can recoup what they allegedly were overcharged.

He’s seeking less than $100,000 in damages but potential plaintiffs’ claims exceed more than $1 million, the suit says. Hundreds, if not thousands, could be members of the class, the complaint adds.

The Woodlands-based Emerus Holdings Inc. operates the “micro-hospital” and six others in San Antonio, along with one in Shertz. Emerus, which also is named in the suit, does not comment on litigation, spokesman Richard Bonnin said. The company has yet respond to the complaint, filed Sept. 25 in state District Court in San Antonio.

Emerus bills itself as the country’s first and largest operator of “micro-hospitals,” which are smaller than the typical hospital and are less expensive to operate. A typical facility has eight to 10 beds.

Emerus’ has partnered with larger hospital systems in operating the facilities, including Baptist Health System in the San Antonio area. Baptist is a subsidiary of Dallas-based Tenet Healthcare Corp.

Keslar visited the hospital at 4103 N. Loop 1604 West on Dec. 31, 2018, for an undisclosed ailment. He made sure the hospital accepted his insurance before going. He was charged $350 at the time of his visit.

Nine months later, Keslar received a bill from the hospital.

“He was shocked to discover that the charges for “LABORATORY” totaled $4,526.44,” the suit said. It did not provide a detailed explanation of the charges.

Keslar’s wife spent more than 130 hours trying to get an explanation of the charges, the suit says.

Keslar later learned that $3,824 of the charges were related to a blood test, called a basic metabolic panel, and a liver function test. Both tests include about seven or so components.

Reviewing a detailed billing of the tests, the suit says, Keslar discovered the component tests were individually billed.

“Testing panels are typically less costly to complete than if each test (was) ordered and performed individually, and thus reimbursement for a panel is typically lower than what the total reimbursement would have been if each test within the panel was billed individually,” the suit alleges.

“A variation on unbundling happens when a facility performs some but not all of the tests in a panel in order to circumvent the panel and justify billing for the individual tests, which results in higher reimbursement than if the full panel was performed,” the complaint adds. “This ‘twist’ on unbundling is what happened in this case.”

The Texas attorney general’s website describes unbundling as health care fraud, which Keslar mentions in his lawsuit. Coincidentally, Keslar is represented by Philip Hilder, a Houston attorney who is defending Texas Attorney General Ken Paxton in his felony securities fraud case. Hilder didn’t respond to requests for comment.

A “Pricing Transparency Document” posted on the hospital’s website in 2018 showed the cost of a basic metabolic panel as almost $754. Only seven of the eight tests in the panel were performed, the suit says, but Keslar was billed nearly $1,221, according to the suit.

The hospital omitted one component in the liver function test and individually billed for each test, the complaint says.

The “unbundling of the panels, achieved by omitting a single test from each panel, increased the charges by $1,340.98,” the suit says.

Keslar incurred total charges of $8,766, reduced to $2,321 after insurance adjustments. He had to pay the adjusted charge because he had a high deductible plan.

Keslar unsuccessfully disputed the charges. In February, the suit says, the hospital sent him a response denying any wrongdoing and informing him that it was “obligated” to begin collection efforts on $585 that he still owed.

The lawsuit references Yelp reviews posted by others who have complained about Baptist Emergency Hospital’s billing practices. One wrote “never going back” after she was charged $4,311 for a blood test, the suit says.

“Apparently, the same unbundling scheme is occurring across Baptist Emergency Hospital facilities, increasing the costs to patients like Keslar and driving up the cost of health care for everyone,” the complaint adds.

Among Keslar’s claims is fraud by nondisclosure, alleging the defendants did not disclose the unbundling scheme or the extremely high cost of having routine blood work performed at the hospital.

Patrick Danner covers banking, insurance, business litigation and bankruptcies. To read more from Patrick, become a subscriber. [email protected] | Twitter: @AlamoPD

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