Mary Black Health System $2.25 Million Settlement for Nonbilled Insurance Claims

Mary Black Health System LLC, connected entities CHSPSC LLC and Professional Account Services Inc., agreed to a $2.25 million class action settlement tied to billing practices at Mary Black Memorial Hospital and Mary Black Health System–Gaffney in South Carolina for care provided since Jan. 1, 2014. The lawsuit targeted patients who had health insurance at the time of treatment (including private coverage, Medicare, or Medicaid) but whose medical bills allegedly were not submitted to their insurers for payment, leaving them to pay the hospital directly or to experience reductions or shifts in recovery. In plain terms, the plaintiffs argued that instead of following standard insurance billing—where providers submit claims to insurers and patients are billed only for covered patient responsibilities—these hospitals supposedly pursued payment from patients and other sources, potentially increasing out-of-pocket costs. The case was filed to challenge that alleged “nonbilled insurance” policy and to compensate affected people through a pro rata claim process from a net settlement fund. Eligible class members are estimated to have aggregate losses of about $2,036,538.28, meaning individual payments depend on how many valid claims are approved and each claimant’s documented loss (generally the amount paid to the hospital for services that the plaintiffs said should have gone to their health insurance provider). The settlement is significant because it reflects how insurers expect timely, accurate claims submission and how consumer protections can be used when billing practices strain patients’ finances. It also sits within broader healthcare industry oversight—such as the federal False Claims Act framework that can reach improper billing, plus state and federal consumer-protection and insurance-billing rules that govern how providers interact with third-party payers—even though the settlement itself avoids a final court ruling on liability. More broadly, this lawsuit highlights a recurring theme in health care class actions: patients and government programs can be harmed when hospitals or billing contractors allegedly bypass insurance billing, resulting in patient payment requests or distorted reimbursement flows. Similar disputes have emerged across the industry whenever billing systems or policies are alleged to cause “balance billing,” incorrect claims handling, or delayed insurer submissions—issues that can be especially consequential for insured patients, who typically rely on insurers to absorb most covered costs. For those who believe they fit the class definition, the settlement requires submitting a paper claim form (no online portal), supported by receipts or billing records, by Aug. 31, 2026, with a fairness hearing scheduled for Oct. 27, 2026, and payments issued only after final court approval and resolution of any appeals so class members can receive their share of the settlement fund